Civil service overcomes its inertia

Politically driven innovation is a constant theme in government. In some
senses it is what politicians are elected for, and every political manifesto
speaks of the need for change and the importance of making a difference.

However, there is another kind of innovation in central government, namely
organisational innovation. The aim here is to do more for less, by using
innovation and change to increase a department’s output for the same amount of
input, or cash. The two forms of central government innovation, the politically
driven and the organisational search for efficiencies, merge to some extent with
initiatives such as the government’s thrust for joined up government.

Study the figures

The National Audit Office commissioned the Public Policy Group at the
London
School of Economics (LSE), led by Professor Patrick Dunleavy, to carry out a
study on innovation initiatives in the organisational sense, and the costs and
impact of such initiatives on the working of central government.

The LSE/NAO report, entitled
Achieving
innovation in central government departments began early last year, with a
call by the LSE research team for government departments to submit details of
recent successful innovations. Around 125 innovations were submitted.

Part of the function of the exercise was for the NAO to get a feel for
whether or not the risk averse culture of the Civil Service was responding to
the NAO’s attempts to push “well-managed risk taking” in central government. The
thinking here is that since innovation requires change and since change always
has a measure of risk associated with it, evidence of innovation shows that the
Civil Service was becoming less risk-averse and willing to explore new, more
efficient ways of working.

“What we found,” said an NAO spokesman, “was that departments are prepared
and able to drive useful innovations through. However, these innovations tend to
be driven from the top down, by heads of departments. If we are going to develop
this culture of innovation, there has to be incentives and rewards for staff to
innovate at all levels.”

Of the 125 innovation projects submitted, around a fifth of departments, had
schemes costing £100,000 or less and some nominated schemes had costs of only a
few thousand pounds. In contrast, the top 20% of projects had a price tag in
excess of £6.25m and the top seven projects cost in excess of several hundred
million pounds.

Making comparisons

Jane Tinkler, an LSE researcher and the coordinator on the project, says that
a common sense benchmark for the LSE in carrying out the study was a comparison
with innovation in the private sector. “In the private sector, innovation is a
constant theme. Companies are innovating all the time as they seek to improve
products, increase customer satisfaction and drive costs out of processes,” she
says.

The local authority sector is under pressure to come up with innovations to
drive efficiencies since they have a cost reduction target of 5% to achieve each
year. Central government departments have no such direct pressure. However,
there is the matter of the Gershon Review, which is looking to cut civil service
numbers. This, of itself, puts pressure on central government departments to
find more efficient ways of working.

The LSE team asked departments and agencies to say what factors inside their
organisation help innovations to be successful. The most common reply was
availability of funds. However, three other elements emerged as important and,
taken together, they were more important than funding. The three factors were:

– The presence of specific cross-function innovation units with a brief to
look for spin-offs;

– Formalised brainstorming away-days or group ‘think’ events;

– Regular internal reviews or external audit with a value-for-money emphasis.

These three factors combined were very influential, the report says, in
generating innovation.

Highlighting failings

One big failing was that while central government departments and agencies
often seemed to have well researched and well thought through innovation plans,
these were generally only put into place when the department was forced to act
through some external stimulus.

Tinkler argues that departments are often constrained in their timing when it
comes to implementing new projects. Budget constraints or resource issues can be
the determining factor, she points out. Given this, it makes sense for
department heads to plan ahead and then look to implement the plan when budgets
and resources allow this to happen. On this view, the problem would lie with the
way central government departments are funded, rather than with civil service
inertia.

Political agenda

An NAO spokesperson said: “If you look at the comparison with the private
sector, what we find is that the average cost of innovation is smaller scale, at
£900,000 per project on average, and on a longer time frame than we see in the
private sector.”

Tinkler points out that some of the really big innovation projects in
government departments are political in origin and none of the departments
submitted any of these. That factor helped to depress the average value of
innovation projects reported to the study.

“We believe that because central government departments and agencies are used
to working with the NAO, and know that the NAO has no brief to examine policy,
but only to look at implementation, departments made the decision not to submit
projects that were politically driven. The Civil Service heads only submitted
projects which they ‘owned’,” she emphasises.

While the NAO has still to clarify what, if any, further action might come
from the report, Tinkler says that the LSE would like to see the development of
a best practice knowledge base, accessible to all central government departments
and agencies. In this way, everyone would come to learn of successful innovation
initiatives and these could be adopted more rapidly by other departments.