Were it not for Scotland, Ed Miliband could claim to have had a good night. As it is, the extraordinary SNP surge will overshadow some genuinely impressive achievements: potentially gaining a majority in Cardiff (providing a lesson in the benefits of coalition for the larger party), routing the Lib Dems in cities like Sheffield, Manchester, Birmingham, Hull and Stoke, winning back Gravesham and good results in places like Telford and Luton. Yet Labour also lost ground in key seats like Gloucester and Dartford. Of course, results have still to come in many areas. But the fact that one cannot say it was an overwhelmingly good night for Labour is a measure of the uphill struggle that Miliband still faces.
For he is the leader of the party in the whole of Britain, not just England; and he can't accept credit for Cardiff without also accepting the embarrassment of Edinburgh. He needs now to work to ensure that there is a root and branch reorganisation of the Scottish Labour Party, with the persuasion of a heavy hitter to position him or herself to do an Alex Salmond on the whole Scottish Labour party. After all, Salmond had the confidence to stick his name on every Scottish ballot paper.
In England, this is a better result than it might seem, because Labour has once again become the largest party in votes cast. This is important with the Tory gerrymeander still set to be introduced despite the failure of AV. It is a mark of the ineffectiveness of Nick Clegg that he didn't insist that the two measures were dependent on each other, thus forcing Cameron and crew to restrain themselves over their No enthusiasm. The Liberal Democrats are facing potential revolts over key coalition policies which will strain the partnership, and should certainly scupper Andrew Lansley's barmy NHS plans (if not restoring those waiting time targets that had been a huge success for patients) and may force speedier Lords reform and turn the pupil premium in schools into a meaningful incentive to attract poorer students. And while the Tories will be pleased not to have seen their vote drop significantly, they may find that this is the last time they can feel so smug: as Lib Dem councillors disappear, voter anger will find a new home.
For Labour, it is vital that the party does more than sort out Scotland. The extra councillors should help consolidate the party organisation. But Miliband needs to show some policy mettle too, and not wait until his various reviews have pronounced. Voters don't know what he stands for, and he needs to pick some strong symbolic policies on which to take a stand: that might mean outpacing the Tories where their policies are potentially popular, like on academies and free schools, and providing radical alternatives where they are getting it wrong, including on crime and prisons. He should not let the Lib Dems take the initiative on constitutional reform, but he needs a clear and credible economic and social policy that appeals to working class and Middle England voters alike. Of course, he should not unveil all - or even most - of his policies now, but he does need to show where he stands. Otherwise it will be difficult to turn last night's genuine gains into an election winning strategy for 2015 - or before.
An updated version of this posting appears on the Public Finance blog.