The government don't decide the terror alert level, it's done by the intelligence community. It's not political. The fact that we've had an attack after a downgrade shows that intelligence relies on what information comes in and this isn't complete. It's inevitable that some plots will go undetected.
Government and intelligence community are one on the same, but I digress. It is nonsense, set at the second highest level for the last 10 years with no terrorist attacks of significance, it's a tool to manipulate the public.
Think about it, what purpose does it serve to announce a terror threat level to the public other than to try to influence them?