News Analysis: Are Blair's PROs giving us value?

Tweaks to the Government's PR machine are welcome but the unwieldy beast is still eating too much public money, says The Sunday Times political editor

Sven-Goran Eriksson is not the only man at the top of his game in whom Chelsea Football Club has shown an interest during recent weeks.

I can reveal that Roman Abramovich's men have also been looking for a leading PRO and have cast their eyes longingly at Number 10 spokesman Godric Smith. Sadly for Blues fans, like Sven, Godric is not for turning.

A devoted football fan he may be, but he is staying loyal to Downing Street FC and has just extended his own contract under the new posting of director of strategy.

Tony Blair should be over the moon about Godric's decision to stay and the return of David Hill, his mild-mannered director of communications.

Both men are pretty much universally liked and respected by the lobby because they talk straight and seldom bullshit journalists. Following the departure of Alastair Campbell and several other key advisers, there have been genuine attempts to return to a 'spin-lite' operation at Downing Street.

Spiralling costs at Number 10

Yet last week, some familiar echoes were heard. It was revealed that the cost to the taxpayer of the Number 10 press office has doubled since Labour took office nearly seven years ago. The annual running costs have ballooned from £597,000 in the 1996 to 1997 period, when John Major was in power, to £1.3m last year. The PR bill reached a peak during the Iraq war and the row over the death of Dr David Kelly.

Number 10 admits the reason is simply a question of increased staff numbers, and that these have already started to drop with the loss of people such as Peter Hyman, the Prime Minister's long-time speech writer, who has given up politics to become a teacher.

By coincidence, on the day these statistics were disclosed, it emerged that Howell James, a former adviser to John Major, is to be appointed as permanent secretary for government communications. The choice appeared a little odd. Yes, James is a Tory and was a protege of Lord Bell. But the appointment of a man associated with New Labour's 'Prince of Darkness', Peter Mandelson (Mandelson's partner is a former James squeeze), surprised commentators who had been assured the post would go to 'someone boring who you've never heard of'.

James was part of the Phillis Review into government comms, which recommended the creation of the new post. As one political journalist remarked: 'Howell is a lovely bloke and a good networker, but for that post you want someone less interesting.'

James himself is set to earn £120,000 a year. And, despite the streamlining of Downing Street communications, most MPs would be unsurprised if costs rise again next year. But they will continue to ask whether taxpayers are getting good value for money from the Number 10 press office. Those who have worked in Downing Street doubt it - if value for money means getting straight answers to straight questions.

Mark Adams, who was private secretary to Major and Blair, and now runs Foresight Communications, says the expansion of Number 10 began as soon as Blair's administration got its feet under the desk.

'Within months they set up a review of the Government Information Service (GIS) under Robin Mountfield,' Adams recalls. 'This was supposed to respond to concerns about how far the GIS was equipped in all areas to meet the demands of a fast-changing media world. But it was pure Alastair Campbell. Its recommendations came straight out of the New Labour handbook: saying that stuffy old press officers in government departments should start responding to the 24/7 media culture.'

It was made clear to several Whitehall PROs that their cosy lives were about to end - that they should shape up or ship out. Some had been used to a nine-to-five culture, but Campbell made them draw up new, round-the-clock rotas when Britain took action in Kosovo and crises such as the foot-and-mouth epidemic and the fuel protests struck. He even sent some of his favourite firefighters to Washington and Afghanistan. The costs inevitably went up.

Adams says the establishment of the Strategic Communications Unit also led to extra costs. It was staffed by several Labour-leaning journalists, such as David Bradshaw from the Daily Mirror and Phil Basset from The Times. They wanted to get a tighter political grip on communications.

The spiralling bill was not helped when Campbell insisted on moving the press office to the old whips' headquarters at Number 12 following the 2001 general election victory.

The culture of the Number 10 press office will be exposed in detail next month when Martin Sixsmith, the former press secretary to Stephen Byers, publishes a novel based on his experiences at the GIS from 1997 to 2002.

'The reason for the increased cost was that from the moment Labour came in they wanted to concentrate communications in Number 10 and take power away from government departments,' he says.

One of the first innovations was the 'News Grid', which contained all the following week's announcements and was pulled together by Number 10.

'You couldn't sneeze without clearing it with the people who did the grid,' Sixsmith says.

The shadow of Alastair Campbell

Few political journalists believe they are getting a better service as a result of the extra costs either - not in the era of Downing Street misinformation over Berniegate, Cheriegate, the Hindujas, the Queen Mother's funeral and the Sixsmith affair.

'The system may have been nice for a couple of toady hacks who were drip-fed by Alastair,' says one senior lobby reporter. 'But all that most of us saw from the expansion of the Downing Street press office was contraction of true freedom of information.

'The more people they seemed to hire, the less co-operation there seemed to be. It just meant more people to say "We don't provide a running commentary on that sort of thing", whatever the story was.'

The arrival of James in June should change that culture, which still survives Campbell's departure. A whole generation of Number 10 press officers has been infected and become Alastair zombies. This is what Daily Mail editor Paul Dacre meant when he told MPs last week that a 'culture of mendacity' had developed at Number 10.

Recent departures and arrivals have been promising, notably the appointment of Hill. Yet the running costs of Number 10 will always be a subject of debate. And I bet no one will admit to one project that's under way: the refurbishment of the 11 lavatories in Downing Street is going to cost us £150,000. Anyone would think that, at more than £13,000 a loo, they were installing solid gold toilet seats. But then it is always best to start reform from the bottom up.

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