Special report 1- Maybe it's because he's a Londoner

The great Tory lie - that you can have better public services without paying for them - has been exp

The left has always been accused of being a centralising force within politics. But in Britain it was the right that did most to centralise our state, during the 1980s. Margaret Thatcher ruthlessly disempowered any local tier of government that contradicted her agenda. The balance of the tax take in Britain swung decisively to the centre, making local services increasingly reliant on the handouts of an unfriendly Tory Treasury.

The vigorous campaign against abolition of the Greater London Council, like the campaign for a new constitutional settlement for Scotland, articulated the views of the great majority who rejected the contempt with which the Conservatives treated them. These struggles in the 1980s and 1990s against the excesses of Whitehall have remained embedded in the outlook of the Labour Party. Thus Labour has presided over the return of London government and the introduction of devolved powers to Wales and Scotland. Now the government has announced the next stage of the process, with further referenda planned for the English regions.

No one claims that this process of devolution has been perfect. On the contrary, the mix of powers devolved to the new bodies is inconsistent and not always sufficient. Furthermore, the actual physical act of devolving power - of letting go - was a painful one. The abuses in the first selections in Wales and London spoke volumes about this contradiction. None the less, with a second set of elections in Wales and Scotland now over and three years of the London mayoralty complete, there is enough on the balance sheet to draw some conclusions.

For London, the lesson is that devolution delivers. Indeed, I think the government should draw on the examples of delivery within the devolved bodies in fighting referenda in other regions. The government will need to show voters that a new layer of government does not mean more bureaucracy but better services, delivered to address needs of local people.

Any politician in power who says he or she doesn't want any more is probably lying. However, the powers devolved to London's mayor are certainly sufficient to have made dramatic strides. Devolution to London has led to pronounced improvements to public services in the city.

Most obviously, London has led the world by introducing a congestion-charging scheme in a complex urban environment. The London congestion charge was possible because the government gave me the power in the GLA Act to do it and then contributed to the preparatory costs. Nevertheless, the decision to go ahead was entirely mine - and the responsibility for failure would also have been mine. Congestion charging worked because I was able to make my calculations purely in terms of London. I did not have to take national considerations into account.

The outcome is startling. The scheme was introduced to deadline and within cost. The system worked, technically. More important, it has worked as a tool of transport planning. After three months, the scheme is exceeding its targets for reducing traffic and congestion in central London. Traffic congestion and journey times for motorists, bus passengers and business journeys are significantly reduced both inside and outside the congestion-charging zone. The average speed of traffic across the charging day - including time spent queuing at junctions - has increased by 37 per cent to 11 miles per hour. This compares with 8mph at the same time of year in 2002 and 9mph in the few weeks before the charge was introduced.

Year-on-year comparisons indicate that traffic congestion - as opposed to traffic - during the charging hours has reduced by 40 per cent. I had expected congestion to drop by between 20 and 30 per cent. Traffic levels inside the zone have fallen by roughly 16 per cent. I would have been pleased with 10 per cent. Surveys show that typical savings on journey times on a round trip to and from the zone are in the region of 13 per cent.

The real strength of the scheme is not just that it has cut congestion but that it is now a major element in an integrated public transport strategy. Just under half of all London's buses travel through the central zone. The significant reduction in congestion has directly benefited the bus service, with bus journey times and reliability both improved - as the newly chauffeurless Clare Short noted with approval in a recent newspaper column.

The bus service is the second great achievement of devolution for the city. London's devolved arrangements allow me to regulate the private contractors competing to run London bus services. I have used this power to expand hugely the bus network while holding down fares. Passenger growth for 2002-2003 was a staggering 7.3 per cent - an extra 104 million passenger trips. London now has the highest passenger numbers since 1969 and the highest operated mileage since 1963. The bus service has not been this good since before the Beatles split. All of this has been done in three years. I believe London buses are the most improved public service in Britain. The city now has an overwhelmingly low-floored bus fleet, with brand new "bendy buses" carrying more passengers than even double-deckers, whilst closed-circuit television is being introduced across the service. The basic cash fare has remained static at £1 for central London and 70p for outer London since my election. This fares freeze is the biggest fares cut on the bus service since before the GLC was abolished. London's bus expansion alone accounts for the government meeting its national bus improvement targets.

The Tories are belatedly trying to show that they have learned what Labour has long known - that the cities are where most people live, work and play. It is not possible to govern a modern society effectively without taking care of our cities.

Oliver Letwin is leading the Tory charge to reclaim the cities. London is one of their great prizes - but Letwin faces a paradox. He wants to pose as the would-be home secretary who would greatly increase police numbers. His problem is that it is the socialist administration of London - assisted by the new Labour government - that has actually dramatically increased policing numbers in the capital.

It is true that I am overdependent on central government. But there is enough financial flexibility for me to contribute to profound changes in our police force. I can sit down with the Met commissioner, Sir John Stevens, and the Labour chair of the Metropolitan Police Authority, Toby Harris, and jointly work out a revolution in police numbers.

I have never believed that the number of police officers on the streets had no impact on crime. Fear of crime is a debilitating problem in our society. Visible policing helps to liberate many of the most isolated people, and the vast majority of citizens want more police on the streets and are prepared to pay for them. Greater police numbers bring the police service closer to the people, and break down barriers between the police and those they serve. If we allow a neighbourhood to slide it can take years to pull it back up.

As of last month, there are more police in London than at any time in the history of the Metropolitan Police. There are 28,602 police officers in the city. Sir John Stevens argues - and I agree with him - that we need to continue this process: "Our aim now is to grow even further, to reach a strength of 35,000 uniformed staff, which will enable the Metropolitan Police to deliver the type of police service London needs and deserves," he says.

Since my election I have provided the Metropolitan Police with funds to recruit an extra 3,050 police officers. This is in addition to the extra 680 anti-terrorism officers and 500 police community support officers funded by David Blunkett, the Home Secretary, in 2002-2003. The Tories have consistently fought against my police budgets while trying to square the circle and pose as the party of law and order. The electoral imperative for them to emphasise issues around crime and policing is much greater since the success of the congestion charge. However, the most senior London Tory spokesperson on crime - the vice-chair of the Metropolitan Police Authority, Richard Barnes - responded to proposals for more police by complaining that "London's council tax payers will be forced, yet again, to put their hands in their pockets to meet Livingstone's commitment". This situation poses a dilemma for Conservatives.

Devolution has also delivered, therefore, a riposte to the great shining Tory lie of the past two decades - that you can improve services to the people without paying for them. You can't. You have to make a choice. In London I have made that choice, stating clearly in the 2000 mayoral contest that the council tax would have to rise if we were to reverse 15 years of underinvestment in public services. I will go back to the electorate in a year's time with a record of delivery. If voters want lower taxes and no congestion charge they will vote for the Tories - or the Liberal Democrats, who have also taken a hawkish line against my budgets. But this option involves no improvements to public services, an increase in traffic congestion and fewer police.

The government can play a significant role in driving back such forces by continuing to increase the transport and policing grants to London (which, combined, have grown by £1.6bn since the London mayoralty was introduced) and also by throwing its weight behind key infrastructure projects - notably Crossrail.

Devolution is delivering in London. Its success in revitalising public services is one of the best arguments available for proceeding with further devolution to the English regions.

This article is based on a speech by Ken Livingstone at the New Statesman's annual London Day lunch, held at City Hall on 3 July