The Labour government that came to power in May 1997 was deeply committed to changing how government works. This chapter will describe some of the policymaking innovation under New Labour, and how it differed from the past. It is difficult to overemphasise the optimism of the times, both within government on what would be possible, and outside of government on what the new administration would deliver. Those of us on the outside working in the voluntary sector were desperate to influence a new raft of ministers, only a few of whom had served in previous Labour administrations. Most had only been MPs during the long years of Conservative rule. Having little experience of serving in government and little knowledge of how ministers traditionally worked was probably an advantage. Ministers really wanted to do things differently and had no old habits to be broken. Two big innovations were developing, one from the Cabinet Office with strong support from Number 10, and one from the Treasury.

One of the earliest announcements that raised significant interest among social policy analysts and lobby groups was the establishment of the Social Exclusion Unit. Peter Mandelson, at the time Minister without Portfolio, announced the new unit in a Fabian Society lecture in August 1997, barely three months after the election. The intention of the unit was to address issues of deep disadvantage that could only be solved with the efforts of more than one government department. Based in the Cabinet Office, and with strong support from the Prime Minister, the unit demonstrated many of the new ways of working that would be a hallmark of the Labour government. Key features of the new unit were an emphasis on cross-cutting policy development and a dogged determination to be inclusive in policy formulation, not just implementation. The new unit operated largely by bringing in advisors from outside of government and setting up consultative processes that engaged front-line staff, policy experts and academics. The early work of the Social Exclusion Unit was driven by high levels of engagement from the Prime Minister, and racked up some impressive successes: strategies to reduce teen pregnancy and rough sleeping to name just two. But it could also be an irritant to mainstream departments.