No 10 to build engine for long haul

©Reuters First Christmas together: a tree is installed yesterday in Downing Street, where the PM and his deputy are creating a team to develop joint policies      Reuters

David Cameron and Nick Clegg have ordered the creation of a beefed-up policy unit at 10 Downing Street to tighten their grip on government and act as an engine for ideas for the coalition in the second half of this parliament.

Mr Cameron’s allies talk of forming a “strong but tight” unit at the heart of government, reflecting concern that Number 10 has lacked sufficient control over radical plans for public sector reform.

The 15-strong unit, comprised of Conservative and Liberal Democrat political advisers and “the brightest and best” civil servants, will also be charged with developing policies that reflect a distinct coalition philosophy.

The prime minister and his deputy believe that the coalition agreement – hastily compiled in the days after the May election – will have been largely implemented by mid-parliament.

Their desire jointly to develop new policies for 2012-15 will encourage those such as Sir John Major, the former Tory premier, who want the coalition to last beyond the next election.

For now, both parties insist they will fight the next election as strong independent entities, and have set up separate backbench mechanisms to develop policies for their manifestos in the poll scheduled for 2015.

Mr Cameron and Mr Clegg have scrapped the strategy unit – a Tony Blair creation charged with longer-term thinking – and want instead to have a strong policy body, modelled on the vaunted organisation that worked in Number 10 for Margaret Thatcher in the mid-1980s.

“All governments need that kind of in-flight refuelling so they don’t run out of steam in mid-term,” said David Willetts, universities minister and veteran of the Thatcher policy unit.

The new unit is expected to comprise about five political appointees and 10 high-flying civil servants, answering to a board led by Oliver Letwin, the Tory cabinet office minister, and Danny Alexander, Lib Dem Treasury chief secretary.

New civil service recruits and outside experts are being sought, in a move designed to bolster the capacity of the offices of both Mr Cameron and Mr Clegg.

Officials deny this is a reversion to Gordon Brown’s centralised style, but say the unit will hold ministers to account for delivering their reforms, contained in departmental business plans. Senior civil servants have given private warnings that Mr Cameron’s willingness to empower ministers to draw up radical reforms – and to deliver them quickly – could see a policy pile-up.

Mr Letwin has already been charged with scrutinising health department plans for a shift of power and accountability in the NHS, amid concern at the Treasury and Number 10 over implementation.