Not only is it a hugely positive step forward, it is also a clear commitment that the Labour Party is willing to work with new forms of community engagement, to adopt a vehicle that will help rebuild the party from the grassroots up.

The Movement for Change’s emergence comes at a seminal point in the party’s history. Following last year’s General Election shellacking, which equated to the second worst defeat since 1918 and only 1.5% ahead of the heaviest ever loss, the party faced the prospect of years in opposition unless it took radical steps to address its problems.

Yet prior to this week’s announcement a number of party members were still in denial. Buoyed by the public’s disillusionment with the Tory-led Government and further encouraged by the by-election result in Oldham and Saddleworth, many have taken this as a sign of Labour’s re-emergence. It couldn’t be further from the truth. While Labour may have a lead in the polls, this is reflective only of the Government cuts, not Labour policy, which the party is still in the process of reviewing.

It would have be staggering arrogant to think that a party that was comprehensively voted out of government for being out of touch and bereft of ideas, should remain on its current path, and that’s why Ed Miliband must be commended for this week’s announcement. And, just a few months after the leadership campaign, the Movement for Change will now be able to build on the huge strides forward it made last summer.

The movement will not only strengthen existing relationships in communities, it will help to foster support, particularly in areas where there is little or no existing Labour representation. For example, during David’s Miliband’s campaign the Movement for Change assisted my CLP in improving the lives of residents on one of the most deprived estates in Enfield, where two of the failed London bombers lived. The ward the estate is based in, Southgate Green, used to be and should still be controlled by Labour. Yet the party had become disconnected from the ward in recent years and has allowed the Tories to control all three seats and the parliamentary constituency.

And it’s this pattern that’s been replicated across the UK. Cardiff is a notable example of this trend. Traditionally a strong Labour council, from a position of 61 councillors in 1995 Labour is now the third party on the council, with just 13 seats. Labour colleagues in Cardiff tell me the public became disillusioned with the governing party locally and nationally, and that the disconnect showed no sign of abating.

So it’s no surprise that Alun Michael is one of the biggest advocates of Movement for Change, given the work it started to carry out last year in reconnecting the party with the community.

Many other MPs that have seen Movement for Change at first hand will tell you the same. Indeed, in a recent Progress interview, Jim Murphy recognised that the Movement for Change is ‘‘an entirely different way of doing community politics inside the Labour party” and warned that ‘the Labour party shouldn’t try and throttle it” due to fear of the unknown.

Much of the initial scepticism is borne out of a lack of understanding, and this is something that the movement will in time be able to overcome. But in the meantime it is worthwhile noting that re-connecting with the electorate should not be something that is alien to party members. The movement will help to take the party back to its days under Keir Hardie, when it was rooted in communities.

This is something the Labour Party needs now more than ever, not simply to recover the members it’s haemorrhaged since 1997, but moreover to help build broad alliances on the ground that will help to fight back against the Government’s cuts. The Movement for Change will ultimately help these campaigns to become sustainable, and not fizzle out like the recent student demonstrations.

Nobody is saying the Movement for Change is the finished article. What the organisation highlighted during David’s leadership campaign was its adaptability in tackling issues. And it is this dexterity that has allowed it to develop from a short-term leadership campaign model to one that will now work alongside the party in the long term and move beyond “tick-box” canvassing.

So while the Tories are tying themselves up in knots over the definition of the Big Society, the Movement for Change is already beginning to help rebuild the party.