Michael Brown: Take note: this is the week the sun started to set on Mr Blair's empire

'It is this over-bearing confidence which, I suspect, will be this government's eventual undoing'

Three years ago, when the Asian economies went belly up, Francis Maude, the then shadow Chancellor, made a big fuss about similar prospects for the British economy. So carried away was he with his theme that he stuck his neck out and talked of "a downturn made in Downing Street". The recession never materialised and Gordon Brown ensured that Mr Maude's credibility suffered as the economy continued to go from strength to strength. Mr Maude was subsequently man enough, in jest, to admit privately that he had been guilty of predicting a "false dusk".

At the risk of being accused of the same charge, I believe that political observers might date the past fortnight as the point at which the sun began, ever so slowly, to set on Tony Blair's empire. But how can anyone believe the Prime Minister is anything other than the confident master of all he surveys? Opinion polls continue to show record leads. It is less than six months since he secured the historic second term. The economy appears impervious to the outside influences of world recession. And Mr Blair bestrides the world stage, thanks to the opportunities presented by 11 September.

And yet, it is precisely this over-bearing confidence which, I suspect, will be this government's eventual undoing. The seeds of self-destruction were actually sown during the height of Lady Thatcher's regime at the very moment when those around her were too dazzled by her successes to notice the small clouds.

So just consider recent domestic events. First, the wretched Dome fiasco has come back to remind us that this government has wasted more than £600m of public and lottery funds with no prospect that anything will ever be recouped. Then the shambles of the Wembley Stadium follows to show that the Government has still not fully learnt the lessons of the Dome. Over a year ago, Mr Blair appeared to indicate that the Government would not get involved with any more grandiose projects. Yet the latest fiasco surrounding a new stadium shows they still cannot escape from the temptation to meddle with "eye-catching initiatives". But already £120m of lottery and taxpayers' money has been blown on the Football Association. Only belatedly has the Government realised they are about to be taken for another ride.

Neither of these incidents directly impinges on the general public, but they highlight a lack of grip by an administration which is still characterised by a desire to be swept along by its continued adherence to all things cool, modern and fashionable. The Department of Culture, Media and Sport may not be at the centre of the political universe, but it has an extraordinary ability to trip up the Government.

Then there has been the business of sleaze, Geoffrey Robinson, and the continuing row over the effective sacking of Elizabeth Filkin, the Parliamentary Commissioner for Standards, which has made a mockery of Mr Blair's claim to be "purer than pure". Similarly, the news of fiddled figures over hospital waiting lists will overshadow any increases in expenditure on the NHS. The Tories, under Thatcher, actually did spend billions on the health service, but somehow the attitude, and the rhetoric never brought it any credit – even when there was a substantial new hospital-building programme during the 1980s.

But, so far, this administration has still managed to talk a good story. The news, however, that hospital bureaucrats have been fiddling and covering up statistics reveals something more interesting about the relationship between Labour ministers and the NHS. "Getting the figures right" has been dinned into hapless pen pushers as the culture by which ministers will judge them. What else would explain the willingness to protect them by compensating them with huge payoffs and re-employment elsewhere? Why did the Government, when the National Audit Office reported this scandal, not order the health authorities to identify and dismiss those concerned? Instead, the junior health minister, John Hutton, mumbled something about confidentiality agreements.

I bet that if any of the miscreants were sacked and summoned to give evidence to the Public Account Committee, someone in government might be embarrassed about the pressure these bureaucrats might say they were under to come up with the right figures. This event will ensure that nobody will now believe official figures about waiting lists and times. Anecdotal stories of delayed treatment will become the norm by which the health service is judged.

And then there is Railtrack and our old friend Stephen Byers. Labour MPs think that his de facto nationalisation has solved the problem. It has not. From now on every late train, delayed investment and rail accident is the Government's responsibility. Even Mr Byers has the wit to know that the Labour flagship, public-private partnership, will fail to excite City financiers. That is why he is desperately trying – against pressure from Gordon Brown – to extricate himself from the policy so far as the London Underground is concerned.

But Mr Byers is presiding over another small cloud that could turn into the hurricane that drove Lady Thatcher out when she meddled with local government finance. In fact, it is the very same issue. Twice in the last fortnight Mr Byers has come to the Commons, first to announce routine details of next year's settlement for local councils and then to publish details of a white paper for local government reform.

Buried in the small print is the intention to "abolish the standard spending assessment". This is the formula that is used to decide the level of grant to councils from the Government. Most MPs think it is unfair. What they do not realise is that any change which will benefit some councils will inevitably disadvantage others. Those that benefit will not notice – the council tax will still go up – but those which are hurt will scream. In addition, there will soon need to be a re-valuation of all our properties and lift most of us into a more expensive banding.

It would be ironic if local government finance became the trigger that exploded this administration's popularity, just as it did to Lady Thatcher a decade ago, but this is more than a possibility. Maybe I am premature in predicting a "false dusk", but I failed to read the signs when local government first crossed my own radar as an MP. So too, last week, did Labour MPs.

mrbrown@pimlico.freeserve.co.uk