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Journalism has its surreal moments. One morning last week, I found myself sitting in the garden of 10 Downing Street. Tony Blair had returned the previous evening from a less than restful St Petersburg summit. The fighting in Lebanon was filling the world’s air-waves. John Prescott was sinking deeper into the political mire. Now, though, Mr Blair was flanked by Sir Gus O’Donnell. Prime minister and cabinet secretary wanted to talk about modernising Whitehall.

I once wrote that Mr Blair could not manage his way out of a paper bag. Over the years I have seen little reason to revise that judgment. The prime minister is an intuitive politician. He has never really understood the processes and the personal connections that make organisations work. The powerful Whitehall baronies have rarely been properly harnessed to the New Labour cause of public service reform.

A big part of the problem is that Mr Blair has had scarce trust in his own colleagues. With two or three notable exceptions, ministerial life for most of them has been a series of revolving doors. Mr Blair’s frustrations, meanwhile, have been ever more obvious. Why, when he has announced all those eye-catching initiatives, has nothing happened?

Sir Gus has taken up the challenge. The “capability reviews” now being conducted by the cabinet secretary across all the big Whitehall departments have some merit. Much of the civil service belongs to the static world of the cold war. Public services too often still assume the deference of another age. Government has been slow to adapt to the accelerating change of globalisation and to an electorate at once more insecure and more demanding.

Sir Gus’s prescriptions in the first four reviews seem sensible enough. Shifting resources from Whitehall to the front line puts into reverse the manic centralisation of the government’s early years. Allowing officials to take risks should encourage a more entrepreneurial culture. Faster feedback from citizens is an essential element in self-sustaining improvement.

Unsurprisingly, the Home Office fares worst among the first clutch of reviews. That is partly because the police, the prison and immigration services are among the last bastions of the old culture, but also because the Home Office is the place where long-term policy almost daily collides with short-term politics.

Great fanfare has accompanied the announcement of long-term reforms by John Reid, the home secretary. They seem to me not that much different from those planned by Charles Clarke, Mr Reid’s predecessor. Much more important will be whether the government calls a halt to the avalanche of criminal justice legislation of the past nine years.

Good government, though, cannot be separated from sensible policy decisions. Sir John Bourn, head of the National Audit Office, has just fired a well-aimed Exocet at the Treasury, the most vital of Whitehall departments. The Treasury has forgotten how to do the things it should do well and has expanded into areas where it lacks the necessary competence. Control and scrutiny of public spending have been sacrificed to ill-judged excursions into the rest of Whitehall.

The over-generous contract awarded to general practitioners in the health service is one of many examples of the Treasury’s failure to keep a grip on the public purse in recent years. Meanwhile, the expensive complexities of tax credits and flawed deals with the private sector to modernise London Underground attest to the Treasury’s chronic weakness as an initiator of policy.

Gordon Brown has always seen himself as an economics as much as a finance minister. He has been impatient of process. Promotion to the highest reaches of the Treasury has been on the basis of perceived loyalty to the chancellor rather than genuine competition. Less malleable mandarins steeped in the old financial disciplines have drifted away or been side-lined.

George Osborne, shadow chancellor, promises that if the Conservatives are elected he will strip the Treasury back to its core finance ministry functions. That is easier to say in opposition than it is likely to be implemented in government. But Mr Osborne should be held to the pledge.

The Foreign Office has a different problem. Like many others, it saw the fall of the Berlin Wall as marking the end of history. Diplomats were re-badged as sales people for Great Britain plc, strategists as line managers. A decade or so on it is clear that we are in the midst of the biggest and least predictable upheaval in global affairs for a century. If the rest of Whitehall needs fewer thinkers and more managers, the reverse is true for the Foreign Office.

As for Mr Blair, I marvel at his capacity to skip from crisis in the Middle East to headcounts in the Home Office without a flicker. But after nine years in 10 Downing Street, it is a little late to be messing around in the engine room. Whatever its broader judgment, history will not remember Mr Blair as a manager.

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