David Miliband is leading a review of the department's role to ensure it delivers its Five Year Plan effectively, but the 'stocktake' is really a strategic shake-up to set top policy priorities and realign its internal structure, argues Dermot Finch.

David Miliband will address the Core Cities Summit in Leeds today (Friday), celebrating his 40th birthday. Yes, 40. That might surprise some of you, not least the birthday boy himself. But I'm sure David will be hoping that his maturing years will start to chip away at his new-kid-on-the-block image.

Which reminds me. Last week, Office of the Deputy Prime Minister officials gathered in London for a morale-boosting pep talk from John Prescott and his ministers. The deputy prime minister bounced on stage to Tina Turner's Simply the Best (I'm not joking). Apparently, Miliband was going to be accompanied by New Kids on the Block - but thankfully, there was a rethink. You may well laugh (I did). But there's a serious point to all this.

At Prescott's request, Miliband is currently leading a "stocktake" of the ODPM's programmes and activities, to ensure that its Five Year Plan will be delivered effectively. Or I suppose, in Tina's words, to make sure that the ODPM is "better than all the rest".

Earlier this week, Prescott and his team gathered to take stock of the stocktake. Many in today's Leeds audience will be looking for Miliband to reveal its contents. Since it was announced just after the election, the ODPM has been pretty coy about it. They say it's not a formal policy review. But everyone knows it's more than just a stocktake.

So what is it? I'd call it a strategic shake-up. And what should it do?

I think Miliband will want three things from it: a set of top policy priorities, a clear role for himself and a much-needed realignment of the ODPM's internal organisation.

What should the department's priorities be? Like some of the worst US cities, the ODPM's agenda is too sprawling, covering everything from fire issues to Gypsies. It has also shifted emphasis in recent years from the regions to neighbourhoods, and now to cities. A lot of the department's stakeholders, including business, are unclear about its future direction.

Miliband should take this opportunity to streamline the ODPM's responsibilities and focus on what really matters: affordable housing, local government reform, cities and city regions and economic development. That will help both the ODPM and him to deliver significant change.

The Government is responding to the first two priorities via the Barker and Lyons reviews and local area agreements (LAAs). But both affordable housing and local government reform are clearly still work in progress.

Implementation of the Growth Area housing targets looks more difficult since the election. And ministers may not have the appetite for early action on local government finance.

Progress on LAAs is more encouraging, with 66 local authorities in the second round - on top of the 20 in the first. Miliband is playing up LAAs quite strongly as the model of central-local cooperation, with new funding flexibilities for councils.

The third priority - cities and city regions - is less clear. The ODPM is now focusing more on the role of cities as economic drivers and has recently promoted the concept of city regions - most notably in the Northern Way.

But the case for cities as economic drivers needs to be set out more clearly. And there are a lot of unanswered questions about the political implications of city regions. If they are to do anything meaningful, how will they be funded and made accountable? Will the ODPM opt for incentives to encourage cross-boundary working between local authorities, or will it set up new institutions?

Miliband faces a dilemma. There is no appetite for a new tier of sub-regional government, but more partnerships between existing players may not work. I suspect the answer will lie in using different models for different city regions. But first we need that rigorous evidence base to underpin cities and city regions. So let's focus on that before talking about new structures.

The fourth priority - economic development - is arguably the most important. The ODPM needs to articulate and promote a coherent economic strategy for all urban areas.

Most of us would instinctively agree with Miliband that our big towns and cities are "locomotives" for economic growth. But we don't yet have all the facts to support this, and we haven't convinced everyone that cities matter more than other places.

There is also a question mark over the role of our second-tier cities and towns. Where do they fit into city regions? Should Oldham pin its future on being part of Greater Manchester or carve out its own distinctive role?

More devolution could well be the answer to some of this. If so, Miliband should encourage cities and towns to make the case for more powers. That requires cities and towns to get a better sense of their own assets and distinctiveness. Only then can they attract the right jobs and growth. The ODPM also needs to help local authorities to upgrade their own capacity and skills set. Only then will they be able to take on more powers.

So it is more than a stocktake. It is an opportunity for Miliband to set the ODPM - and our cities - on the right path.

Dermot Finch is Director of Centre for Cities.