The campaign for a third-term Labour government began when Mr Blair called the general election. Returned to power in the early hours of last Friday morning on a mandate to modernise public services, the provision of a European-standard public sector during the next 10 years will be the test of this term's success and the next.
One of the key speeches Mr Blair made during the election campaign set the standard for Labour's thinking on reform of public services. "No barriers, no dogma, no vested interests" were going to stand in the way of modernisation, was the message to voters when Mr Blair launched Labour's manifesto; a clear "take it or leave it" ultimatum to the unions fearful of getting into bed with private companies.
Yet within days of Labour returning to Downing Street, the public sector is already flexing its political muscle, warning of a summer of discontent, strike action and a battle with New Labour reminiscent of the ideological battles that fractured Old Labour.
On Wednesday, members of the Rail, Maritime and Transport Union (RMT) voted for a series of 24-hour stoppages this summer. It was the worst possible news for rail users, who have just recovered from months of rail delays caused by the Hatfield train crash last year and the subsequent repairs to rail tracks required to restore normal service. Yet while the RMT rail guards who have voted for strike action are employees of private companies since the privatisation of the railways, their dispute about safety and conditions provides a pointer to public service discontent over private finance.
One of the arguments against private finance delivering public sector services, which is embodied in the Private Finance Initiative (PFI), is the fear expressed by unions that cost-cutting and a commitment to profit will mean poorer public services.
PFI's critics point to the fact that the first round of hospitals built with private money contained 30 per cent fewer beds than those planned under the public sector. And the public purse has been raided to bail out private projects which have gone over budget, such as London Underground's Jubilee Line extension which cost the taxpayer £1.5 billion. Under Labour's "third way" philosophy for public services, PFI contracts will provide billions of pounds to build schools and hospitals previously funded by public money.
It is a form of hire purchase, or "buy now, pay more later", whereby private companies design and build the projects and the Treasury pays the lease for up to 30 years after. Ownership can then revert to the public sector.
The PFI scheme was introduced in 1992 by the Conservatives then adopted and extended under Labour, which wants private money to provide actual teaching and clinical services. In fact, the PFI scheme is already moving into this arena and private finance now funds 20 per cent of all elective surgery for NHS patients and 85 per cent of all services for senior citizens.
Public accountability under PFI is one of the main fears expressed by unions. Unison, which represent more than a million health workers, and the Trades Union Congress (TUC) are concerned that private companies will abandon public service projects if they do not turn in a profit. And the unions have also raised questions about whether promotion for public sector workers operating within a privately-funded hospital trust can be guaranteed.
Powerful union leaders are lining up to criticise Mr Blair's notion that there is no ideological barrier to the private/public relationship. Bill Morris, leader of the Transport and General Workers' Union (TGWU) and an ally of the Chancellor, Gordon Brown, declared recently he was not convinced that an efficient public service could be delivered only by partnership with the private sector. And Dave Prentis, leader of Unison, has warned that a second Labour term could be the "last chance" to save public services from privatisation.
It seems the majority of voters do not care who provides public services. But they do care if that service is a poor one and there is no public accountability. If Tony Blair is to get his way, he must reassure nurses, doctors and teachers that at the point of delivery, public services will not decline. Otherwise, his dream of a third-term administration will come to nothing.
rdonnelly@irish-times.ie