We ask leading think tank directors to summarise each major party's performance since the election and what they need to do this autumn. First up is Natalie Evans, deputy director of Policy Exchange, who looks at the pitfalls surrounding the coalition and argues that maintaining momentum is crucial
So much for the legislative paralysis we were told that coalition government would bring. The pace over the last three months has been dizzying. The welfare state, schools and the NHS are set for major reorganisations. Other big changes will come when departmental budgets are cut in the spending review - now just weeks away. The coalition has hit the ground not so much running, as with a Usain Bolt-style dash for glory.
It has undoubtedly helped that relations between many of the principal actors are so good. Oliver Letwin told a Policy Exchange audience in July that he was happier working in coalition with the Liberal Democrats than attempting to manage a tiny majority or trying to run a government without one.
In departments, relationship between ministers and their staff are often very good. The premature exit of David Laws served, if anything, to build trust with many Lib Dems impressed by the way David Cameron handled it.
The prime minister's famous quote that he was a "Liberal Conservative" has turned out to be truer than anyone thought. This is a Tory-led government shorn of reactionary impulses. But that does not mean it has been neutered. The reforms to schools are as radical as when they were first trailed, Andrew Lansley's NHS reforms go further than many expected and locally-elected police chiefs will happen. Most importantly, David Cameron and George Osborne won the argument that fiscal retrenchment had to be both immediate and severe.
The tricky part is to keep the momentum going and the coalition stable. Some argue that being in power is enough and the Lib Dems should be happy to be in a peacetime government for the first time since the 1930s. But senior Lib Dems are not only interested in getting into a ministerial Toyota Prius. The question is what to do with that power.
To stave off Lib Dem backbench and activist unrest, David Cameron is under pressure to give their party some policy ‘wins'. The problem is that many of the flagship policies espoused by Lib Dem ministers have significant weaknesses. Energy secretary Chris Huhne's emphasis on expensive, inefficient wind turbines over nuclear power is one example. Business secretary Vince Cable has vociferously backed a graduate tax in which Treasury power over higher education would grow at the expense of students. Delivering these policies would increasingly alienate the coalition inside the Conservative party itself - and all this is before we factor-in the referendum on AV and how the coalition will approach the next election, a topic of heavy speculation.
Managing the relationship between the two parties could turn out to be the easy bit for the coalition's leadership. The spending review has already led to outbreaks of covert and not-so-covert feuding among ministers, angry that their departments are being ‘unfairly' targeted. Liam Fox is unhappy that the Ministry of Defence has to finance Trident out of its own cash. Iain Duncan Smith wants the Department for Work and Pensions to increase spending in the short term to finance ambitious welfare reforms. The Department of Health and the Department of Communities and Local Government are heading for a fall-out over who bears the costs of social care. Ken Clarke has put himself on collision with Number 10 by letting it be known that we can either lock up over 80,000 inmates or we can have budget cuts at the Ministry of Justice - but we can't have both.
Meanwhile, Labour will sharpen its attack once a new leader is finally elected. Although rudderless since May's general election, Labour has slowly started to climb back up in the polls. By August, the coalition's approve/disapprove poll ratings had slumped from 12+ to just 1+. Labour will soon have a new leader and a renewed opportunity to sketch out new policies which ask harder questions of the coalition and reflect how the recession and election result have altered the political landscape.
The terrain is set to become more and more difficult for the government. Momentum in the shape of new ideas and new reforms will be the coalition's best way of ensuring it does not become bogged down. This is a government that has the potential to be the most radical and transformative of any elected for decades. By combining the best ideas of the Tories with the best of the Lib Dems, the coalition itself could become an indispensible part of fulfilling that potential.
This article was first published in Total Politics magazine.