Careful, Sir Keir – you’re in danger of ‘resetting’ yourself up to fail

By ditching his push for growth in favour of cutting NHS waiting lists and crime figures at all costs, the PM could be running into trouble ahead, says Andrew Grice

When Keir Starmer unveils his “plan for change” tomorrow, he will insist he is totally committed to public sector reform.

But his announcement of “measurable milestones” in six policy areas – living standards, the NHS, housebuilding, education, crime, and green energy – has already provoked an intense debate inside the cabinet.

Some ministers worry the new targets will make it harder to achieve the reforms that will be needed when the government cannot afford to throw money at the many problems in public services.

They fear that chasing the new targets – to avoid headlines about them being missed – will drain so much of the government’s energy and money that it will leave little space for reform.

There is a place and a case for targets. Morgan McSweeney, Starmer’s chief of staff, is betting the farm on them achieving better delivery of public services that will improve people’s lives. He is convinced this holds the key to seeing off the very real populist threat to Labour from Nigel Farage’s Reform UK.

Despite Starmer’s strong rhetoric on reform, some Blairites privately doubt Starmer’s commitment to it. “We have a rhetorical commitment to reform, but it’s not enough,” one told me. The issue could add to the tensions between Starmer and the Blairites, which my colleague John Rentoul highlighted at the weekend.

Although Tony Blair set targets in his first term, he came to believe they were not enough and switched his emphasis to structural reform of the public sector. In his autobiography, Blair said his initial emphasis on “standards, not structures” was not enough: “Unless you change structures, you can’t raise standards more than incrementally.”

Crucially, Blair enjoyed a growing economy and the healthy public finances Starmer lacks for upfront investment in reform. For Starmer, changes to make public services more efficient will become even more important if the government fails to raise the UK’s sluggish growth levels above the current forecasts.

Although Team Starmer insists targets and reform are not mutually exclusive, it will be hard to live up to his rhetoric on reform. His goal of taking the long-term decisions previous governments have ducked is laudable, but the short-term targets designed to win a second term will likely become his top priority as the next election looms into view.

There is no shortage of ideas for reform. Today, the think tank Demos unveiled a plan to devolve public services to groups of local authorities, including pooled budgets at a regional level. It said a £41bn “reform dividend” from “liberated public services” would restore them to their pre-pandemic productivity levels.

Keir Starmer’s ‘don’t call it a relaunch’ is in part designed to restore No 10 to the driving seat, after the Treasury has been Whitehall’s dominant force (PA)

Jonathan Slater, former permanent secretary at the Department for Education and a member of the Demos taskforce which produced the report, said: “I spent decades at the top of Whitehall – believe me when I say the solutions won’t come from there. Instead, we need to put local leaders in the driving seat of reform.”

Starmer allies tell me he is devolutionist at heart. But will the Treasury “let go” of the purse strings? I rather doubt it.

The real test of Starmer’s reform credentials will not be what he says tomorrow but in Rachel Reeves’s government-wide spending review due next June. One insider suspects that, when faced with an inevitable choice, Starmer “will come down on the side of targets”, because they stem from his five missions, rather than reform.

Between now and June, ministers with stretched budgets will agonise over the balance between targets and reform. Usually, such reviews boil down to an arm-wrestling match between the Treasury and ministers pitching their departments’ pet projects, and Treasury muscle usually wins. It has been the dominant force in Whitehall in recent times, with the other points of the triangle of power – Downing Street and the Cabinet Office – weakened. Starmer’s “don’t call it a relaunch” move is in part designed to restore No 10 to the driving seat.

Reeves’s review is so critical to the government’s fortunes that the whole cabinet should agree on its priorities.

Ministers must choose reform; talking a good game about it but relying on managerial tweaks will not be enough. Labour needs to deliver the change it promised, and which an impatient electorate which has lost trust in politicians voted for.