It is 2008, and in spite of 11 years in power, the Labour government is showing few signs of fatigue. Its electoral success is a testimony to the victory of managerialism over ideology, consensus over conflict, and partnership over competition.
Almost without knowing it, the certainties that formed political debate in the 1970s and 1980s have gone. Just as no one seriously challenges the market as an engine of prosperity, so few know or care that the distinction between public and private sectors has blurred to the point at which it is meaningless. What matters is what works.
Even so, in a world of economic boom and political consensus, the underclass has become a hidden class to the more prosperous majority...
Stop. Rewind and run again.
It is 2008. What was once new now seems passe. New Labour is no exception. After more than eight years in charge, and two at the head of a coalition, voters are anxious for a change, even if they do not yet know what it should be.
Arguably the greatest disappointment of the decade has been the failure to revive confidence in the political process.
Gimmicks such as supermarket voting have failed to tackle the underlying malaise. And, in spite of the priority given to education and health, traditional public services have struggled to keep up with public expectations of instant access and gratification.
In a world where decentralisation and One Nation politics have failed, and despite a healthy if undynamic economy, the gap between rich and poor is growing, and crime, truancy and family breakdown are rising...
'What we can be sure about is that neither prediction will come true,' Greg Parston, chair of the Public Management Foundation, told a conference last week at which a report detailing these two scenarios was launched.
Based on a modified Delphi study - a series of 'what if...?' questionnaires - involving opinion formers from the NHS, local government, the police and other services, the aim was to prepare public managers for the future.
Referring back to a similar study by the Office for Public Management three years ago, Dr Parston commented: 'We are living in yesterday's future and we could have been better prepared.'
Although the 1995 study gave 'chillingly accurate predictions', few in the public services took heed, he said. 'Had more public managers done more robust analysis in 1995, rather than waiting and even hoping for a future that would not happen, public services might be in a better state today.'
Admitting that the third way was 'not a phrase in other contexts I am particularly happy with', Labour MP Tony Wright told the conference he had been struck by how much the two scenarios had in common. 'They are not in any true sense alternatives. What they differ on is whether they are going to work or not,' he said.
In 10 years' time, he predicted, the state would be similar in size but 'organised differently', concerned not with who did things, but with how to deliver promises on public services 'efficiently, effectively and economically'.
'There will be a much more hands-on role from the centre in relation to those public services which are operating badly, and far more freedom and diversity for those that are working well.'
Shadow education secretary David Willetts claimed there was a big difference between the scenarios - the first was an idealised description of where 'third wayers' wanted to be, the second set out the problems of getting there.
He said that with power resting at so many levels, he was unclear 'about who is going to be held politically accountable for what' in the first scenario.
'Something people in the Conservative Party can say with considerable personal authority is that the British electorate do want to know who is responsible and to be able to kick the rascals out.'
The Future for Public Services 2008. Public Management Foundation, 165 Gray's Inn Road, London WC1X 8UE. 20.