Blair is dead, long live Blair

Having defined himself against his predecessor, is Gordon Brown now embracing Blair's vision for pub

Plus ça change. Just seven months on from the promise of change, change and more change, an embattled Downing Street endorses James Purnell's claim that Gordon Brown is "clearly the heir to Blair". Meanwhile, dismayed at inheritance tax cuts and the refusal to nationalise Northern Rock, the left commentariat boils with impotent rage.

The reorganisation of No 10 is the institutional symbol of Brown's journey. It turns out that running a government isn't easy, even with the benefit of a compliant Treasury. An important task for Jeremy Heywood, permanent secretary, and Stephen Carter, head of strategy, is effective gatekeeping. For Heywood, a career civil servant, this is about teaching officials and advisers to use their power across Whitehall sparingly - a discipline he strictly applied under Tony Blair. Carter's job must be to ensure that advice generated inside Downing Street synthesises the perspectives of the various policy experts, political strategists and media managers. Brown often works 16-hour days, voraciously consuming briefings on every policy topic under the sun. Heywood and Carter will need to persuade their boss to be managed.

Aneurin Bevan said "the language of priorities is the religion of socialism". Given the inevitable buffeting of events, it is also the secret to an effective centre of government. If Downing Street doesn't decide where to focus its power it ends up mired in detail, unable to provide strategic direction. This, combined with Brown's renowned cautiousness, gives rise to the repeated charge that his project lacks purpose and vision.

In his third term, finally facing a credible opposition, Tony Blair argued that if the next election was a battle between Labour's big state and a Conservative small state, Labour could lose. In a choice between an enabling state and a minimal state, however, Labour should win.

The Conservatives know how important it is to frame this debate. As a Tory strategist put it to me: "While Thatcherites said roll back the state and the market will fill the gap, we say build up civil society so the state can withdraw without leaving people high and dry." As I write, David Cameron is making a speech at the RSA on the topic of the "social enterprise state". Labour needs to be fighting hard for this territory, but instead of a clear argument, its approach can seem opaque.

With the complexity and scale of modern government, the press and opposition will never be short of specific examples of service failure, however much the general picture shows improvement. What gives these stories more power is a sense among the public that the state is unable to address the issues it most cares about - immigration, hospital infection, overcrowded trains - even as it seeks to expand its influence in other areas, from children's play to obesity plans, that used to be seen as the responsibility of the individual.

Brown's cabinet inherited a public-service reform model that emphasised the value of diversity and competition in delivery. James Purnell, the new Work and Pensions Secretary, signalled a new frontier, opening up welfare-to-work to the private and voluntary sectors. However, officials and pro viders in the National Health Service, local government and elsewhere say they are becoming frustrated at ministers' cooling on the principle of competition, or what is known in Whitehall jargon as contestability. The public-sector default is reasserting itself.

Confusion abounds. In one of his bolder moments, Brown recently welcomed the advent of individual, self-directed budgets in social care, and said the idea should be explored for patients with long-term health conditions. Yet there has also been a spate of stories about cancer patients (itself increasingly a long-term condition) who not only lack control over their own treatment but are denied NHS care because they are using their own money to buy additional drugs.

Personal power

At the weekend, two of Labour's most outspoken centrists, Frank Field and Alan Milburn, said that the future of the welfare state lay in extending the idea of individual budgets into more policy areas, from social care into the heart of welfare - education and health.

In the hands of a right-of-centre project, individualisation could lead to fragmented services, casualised public-sector employment and major inequalities at the point of public- service delivery. A progressive, personalised welfare state, however, would foster new forms of collective provision, combining the pursuit of social justice with strategies for personal, community and employee empowerment.

Philosophically, this approach fuses social-democratic and radical liberal traditions. It speaks to the politics of Brown's talented cabinet young guns.

Not that change is easy. Many social workers, originally hostile to individual budgets, now say they have more job satisfaction helping clients manage their own care. This doesn't stop trade unions being deeply suspicious of the concept, even in its current form. But opposition gives policy political bite, an opportunity for Downing Street to be seen to be taking on an argument even at the risk of upsetting Whitehall and Labour's historical allies.

Public services differ one from another. The case for social care payments, for example, is clearer than any made for school vouchers. In driving change, Downing Street should not abandon its commitment to decentralising power to localities. But someone needs to set out the big picture of a modern state that does well what it alone can do, while helping individuals, families and communities take control of their own lives. This argument cannot be won with one speech or announcement. It will demand determination, good policy and brave politics. But it would certainly make for a more edifying and engaging topic of political conversation than Alan Johnson's campaign accounts.

Matthew Taylor is the chief executive of the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA)