Turn Whitehall upside down

<em>Election 2001</em> - Within days of the election result, Tony Blair could have made the most cru

The days following an election provide a decisive opportunity to reshape Whitehall. In May 1997, Tony Blair appeased John Prescott by creating the Department of the Environment, Transport and the Regions (DETR), allowed the Bank of England to assume operational independence, and established the Department for International Development. This time, he intends to go further.

Despite embarking on the greatest programme of constitutional change since Lloyd George, the government has shied away from "modernising" Whitehall. Devolution left little energy to face down the departmental anachronisms. And, at first, Labour seemed in awe of the Rolls-Royce machine that had managed the transition to power so effectively. That reverence has faded, as MPs facing re-election worry about the slow implementation of policy. Whitehall reform is needed both to deliver Labour's agenda more efficiently and to send out a wider message about the left's belief in the state. This is not simply navel-gazing in the Westminster village. New departments with new mandates and different cultures can often secure political objectives more effectively.

Blair could begin on his own doorstep, with a revamp of the Cabinet Office. Crippled by a lack of power and information, No 10 enjoys negligible control over the long-established departments. An enhanced Cabinet Office, under the leadership of an up-and-coming minister (a Patricia Hewitt or Charles Clarke), could ensure that departments focus on Labour's manifesto commitments, rather than the pet schemes of permanent secretaries.

Beefing up the centre of government would entail an attack on the Treasury, which now lords it over Whitehall as never before; the abdication of monetary policy to the Bank of England has only increased its ferocious auditing of other departments. It is time to reduce its cross-cutting role and to scale it down to a ministry of finance. Yet, as one Blairite acidly noted, the only way to reduce the reach of the Treasury is to put the Chancellor in No 10.

Then there is the Lord Chancellor. Before the last election, civil servants at the Lord Chancellor's Department (LCD) were given to understand that Labour would create a ministry of justice. They went so far as to order new stationery. The reforming zeal slipped, but the Lord Chancellor's position as a cabinet minister, the head of the judiciary and Speaker of the House of Lords remains a constitutional absurdity. A department for justice and equality could take over all the LCD's functions, as well as relieving the Home Office of responsibility for human rights, freedom of information and race equality. There would be a minister of justice, accountable to the House of Commons, and an independent judicial appointments commission.

BSE and foot-and-mouth have exposed the split role of the Ministry of Agriculture, Fisheries and Food as both promoter and regulator of farming. The solution is to place its green responsibilities (protection of the countryside, regulation of pesticides, and so on) in an environment ministry and its agribusiness functions in the Department for Trade and Industry. A department for rural affairs (as proposed in Labour's manifesto) would retain the promotion/regulation conflict. In a depressing but inevitable sign of things to come, a Whitehall rift has already developed over whether the DETR should lose responsibility for the "right to roam" legislation.

But rambling is the least of the DETR's worries. The department has proved too unwieldy. Despite Lord Macdonald's retro desire for a tarmac-focused department of transport, it seems obvious to all but the road lobby that environment and transport should stay together, probably under Jack Straw. Regional policy could follow Prescott to whichever post he is destined for. But, to be truly radical, Blair could combine regional policy with the Scotland and Wales Offices in a department for nations and regions.

Is all this window-dressing? Many ministers say the problem is not Whitehall's structures, but with the civil service culture. Elegant memos and well-crafted white papers are not enough for the 21st century. Influential advisers, such as the Performance and Innovation Unit's Geoff Mulgan, want a project-based civil service.

But politics is about personalities. Exactly what happens will depend, sadly, not so much on the merits of the case as on whether Jack will swap with John and on whether Derry can be talked round.