Blair turns up heat on state sector

TONY BLAIR is to punish civil servants who fail to deliver the Government's 600 targets by hitting their pay packets or moving them out of their jobs.

The controversial move is part of Mr Blair's drive to modernise public services. This week he sparked a damaging dispute with John Prescott, his deputy, by attacking workers in the public sector who were frustrating his crusade for change.

Alan Milburn, the Chief Treasury Secretary, has written to all cabinet ministers, asking them to name the individual civil servants who will be charged with meeting the targets agreed with the Treasury. They range from cutting hospital waiting lists to reducing class sizes.

Mr Milburn said yesterday: "The official could be given a new responsibility if the minister decides that the official responsible for a particular measure or target is not delivering the goods." He added that salaries of the most senior officials will "partially depend on them meeting the objectives they have been set".

Mr Milburn hoped that the new system would "send a clear signal across Whitehall". But Civil Service unions reacted angrily last night. "This seems like another stunt," one union leader said. "At the end of the day, ministers must be held responsible."

The move reflects Mr Blair's anxiety that voters are losing patience with Labour's failure to meet its promises to improve public services. A Downing Street aide said last night: "His buzzwords now are not `education, education, education', but `delivery, delivery, delivery'."

Mr Milburn told The Independent that a new progress-chasing system had been set up so the public would notice the changes before the next general election. Cabinet ministers and their permanent secretaries will be called to account over their department's performance.

David Blunkett, the Secretary of State for Education; Frank Dobson at health and Jack Straw at the Home Office have already been summoned. Further meetings are planned with George Robertson (defence), Nick Brown (agriculture) and Mr Prescott, in a move that could reignite tension over his performance on transport.

Yesterday, Mr Blair and Mr Prescott sought to bind their wounds after this week's public rift when they met before a cabinet meeting. "John Pres-cott knows the regard in which he is held by the Prime Minister," Mr Blair's official spokesman said.

Downing Street moved quickly to kill speculation that Mr Prescott would not take charge of the Government when Mr Blair takes his summer holiday next month. It confirmed that Mr Prescott would be in control.

In an olive branch to Mr Prescott, Mr Blair told the Cabinet of the value he placed on the public sector. Ministers agreed to relaunch the Government with a campaign showing how they were delivering their promises on public services.

In a speech to the Durham Miners' Gala tomorrow, Mr Prescott will echo his remarks at yesterday's cabinet meeting that Labour needed the coalition of support that brought the landslide victory in 1997. But in a warning shot to Mr Blair, he will remind the Prime Minister that he needs to retain the support of Labour's core vote. He will say they have to address Mirror readers as well as the Daily Mail's, not just one or the other.

Last night, Mr Blair sought to end the feud with his deputy by praising him as a "decent, wonderful man". Speaking on BBC Television's Question Time programme, he said "People have been trying to divide John and I from the time we became leader and deputy. I don't say we come from the same background or from the same part of the party because we don't. He is a decent, good man, who has been a wonderful deputy to me. Although he comes from the traditional wing of the Labour Party and I come from the modern wing of the party, we believe in the same things."

t Ian McCartney, a left-wing Industry minister, admitted in an interview with New Statesman magazine that there was a perception of control freakery by Labour's Millbank headquarters. "To deny it would be mad, like saying there are no pigeons in Trafalgar Square," he said.