It was always a question of when, not if, Liam Byrne’s rising star would finally reach cabinet level, and many weren’t surprised when he was one of the main beneficiaries of Gordon Brown’s reshuffle in October 2008. His business background (Harvard MBA and a founder of his own e-government business) and his experience in strategy (Byrne worked at Accenture and advised the Labour party on reorganising Millbank), gives him a good basis for taking on the job of Cabinet Office minister, known for being tricky because it involves banging heads together without having the clout of a spending department.

But if anything, Byrne seems keen to disown his old profession by agreeing with the proposition that ‘we spend too much money on consultants’ and admits that he’s already set ‘ambitious targets for how the Cabinet Office needs to cut back on that kind of spending’. But while the management consultants may be out, the new minister for public service reform hopes to spend this year ‘bringing innovators’ and even ‘heretics’ in to ‘look at new ways of doing things’ and new ways of ‘rewriting the old rules’.

He is eager to preside over the next big stage of reform which he describes as ‘unlocking the imagination, the innovation and the creativity of people who went into public service to make a difference to people’s lives’. He believes that this requires a ‘different role for the centre’ where the power is retained to ‘shut down a service that is second-class’ but which doesn’t entail ‘setting millions of targets, going round ticking boxes and checking everybody is doing what we’ve told them to do’. Instead, Labour’s new task is to ‘radically personalise services’ and ‘stop treating people as a number’ while also ‘letting go and trusting frontline leaders and frontline staff’.

Byrne’s frank about the fact that this will require a shift in political mindset: ‘When New Labour was started we were control freaks when actually we wanted to be change-agents, and that is the change of gear that we have to go through now’. He also criticises New Labour for making ‘a fetish of public service reform’ and forgetting to ‘tell a story about what were we reforming for’. But he is adamant that this doesn’t mean rowing back on reform, even if some people think that it’s a distraction in the current economic downturn. If anything, the new minister argues, Labour has got to ‘accelerate public service reform now because public expectations are going up at a time when public spending is flat’.

If this is to be a success, however, Labour needs to put forward an argument about ‘the kind of economy we’re trying to create and the kind of society that we believe in’. And Byrne believes this will require Labour to restate the case for the role of government: ‘We have to take on the Tory argument about the need for government’ and say ‘you don’t need big government to have a strong state, but you need a strong state if you want a richer country and a fairer society.’ And he believes there is no time better than the current to prove that the state is key: ‘There is now this pretty widely-shared international consensus that we’ve helped lead among parties of the left and the right, among economists of the left and the right, that government has to act and invest now.’ But ‘the only modern party outside that consensus is David Cameron’s Conservative party’ who have ‘reverted to type’ and seem to ‘operate on feedback from focus groups rather than economists’.

The minister does stress that the government must deliver its ‘ambitious programme of efficiencies’ set out in the pre-budget report, however, if Labour is to counter the Tories’ charge of financial irresponsibility. He says: ‘I don’t think we want to make a fetish of cuts – they’re not a badge of honour – but we have got to be serious about tightening our belt in a downturn and putting public money where it makes the most difference, which is on the frontline.’ He concedes, too, that if ‘you believe, as I do, that we want a smaller centre that acts strategically, then further efficiencies are probably needed’.

As the new cabinet ‘enforcer’ Byrne has been leading Labour’s recent strategy on putting fairness at the heart of every government message. As one of his first responsibilities he launched a white paper on social mobility in January which called for a renewed emphasis on early years provision to boost child development in the poorest communities. He admits that his own social mobility ‘from Harlow to Harvard’ was down to the luck of having ‘parents who loved me, who pushed me and who picked me up when I got things wrong’. But he recognises that ‘not everybody gets dealt those kind of cards’. He rues the fact that ‘despite all of the huge economic and social and political changes since I was born in 1970, social mobility for people born in that year hasn’t changed’.

So what about the argument that only greater taxation of the rich and a wider redistribution of wealth will kickstart social mobility from its stubborn plateau of the last few decades? Byrne retorts that he just doesn’t think ‘the evidence supports that argument’. He continues: ‘Very often in this debate people want to find the silver bullet that can somehow magically solve this great complex problem that’s been with us for the last few centuries. And life just isn’t that simple’. Instead, he believes there are five big challenges for the state to make society more mobile: ‘deliver more skilled jobs’; ‘invest in early years education’; ‘get more kids to succeed better at schools’ (and he throws in that they will need more ‘fantastic teachers’ like his mum to do achieve this); give a ‘real choice of apprenticeship or college or university’; and finally ‘back people for life with investment in skills’.

Alongside this, the state needs to use the coming ‘economic revolution’ to renew the towns and cities which were created by the ‘industrial revolution’ and build ‘a stronger civic fabric at the heart’ of renewed communities. As once before communities were built around ‘manor houses’, Byrne believes they can now be rebuilt around schools to recreate the sort of ‘civic pride’ which was experienced in cities such as Birmingham in the 19th century. However, he fiercely rejects the Tory idea that Britain is somehow ‘broken’: ‘the spirit of this country has never been in better health quite frankly’. But he does accept that the Tories have tapped into an ‘angst and sense of insecurity that comes automatically with rapid change in communities’. It’s not surprising, he reflects, that we lose a ‘sense of connection with the people who live next door to us’ when we live our lives ‘in networks’ and ‘forget that we live in neighbourhoods’.

But Byrne believes that there are historical parallels we can learn from: ‘This happened at the end of the 19th century when Britain moved out of the countryside and into the city.’ He suggests that our reaction at the time was not to say ‘”this is very scary, let’s go back to the farm and put women back in the kitchen”‘, instead the response was one of ‘huge civic inventiveness and that’s what we need again now’. Moreover, Byrne thinks the Labour party should be at the heart of this by reviving ‘the art of association’ and becoming the main place where ‘people who want to change their community come together to forge a common agenda’.

The challenge, therefore, is to renew the party in a way which unites those people with the ‘passion-power’ so that they can ‘get the skills, get the connections, get the energy, get the enthusiasm to go back out and make a difference’. A little like Liam Byrne is striving to do himself.