There isn’t much of an argument to be had about whether we need to change the way that we organise public services. The combination of fiscal pressures, rising and changing demands, persistent challenges and the opportunities presented by technology and new sources of knowledge is fairly persuasive. 

There is much more debate around what kind of change we need and how we bring it about. Over the past 6 months, I’ve been part of a panel looking at these issues on behalf of the Chief Secretary to the Treasury. 

The report, which we launched yesterday at the Houses of Parliament, sets out our conclusions and makes a set of clear recommendations about what central government should be doing differently to support transformation in local public services. 

We called for three fundamental changes.

First, we said that innovation efforts should be focused on groups and individuals with multiple and complex needs – that could include repeat offenders, frequent visitors to A&E or people who are long-term unemployed.  This reflects the lesson from the troubled families initiative that a clear shared goal that cuts across public service silos can be a powerful lever for change. 

Second, we proposed a dramatic simplification and improvement in the panoply of government innovation funds. We found 30 innovation or transformation funds for local government alone, all encouraging authorities to bid for partial solutions to multi-faceted problems; too often, incentivising invention rather than replication of what works and rarely managing to invest seriously in prevention. Government can do much better and we made some specific recommendations on this (see below).

Third, we highlighted the need for radical improvements in the way that we use digital technologies and data to provide smarter services. Some of that is about learning the lessons from the Government Digital Service and finding a way to make them applicable to local government. But it’s also about realising the potential of the data revolution to generate value for the public good through better data sharing, predictive analytics and decision-making tools that improve the ability of the front line to direct resources to prevention.

Do we really need a £5 billion innovation fund? 

At the centre of our more detailed proposals is a £5 billion innovation fund. I can already hear the sighs of those regular readers of government sponsored reviews (admittedly a very small group of people) as they see yet another panel of “experts” recommend that the government throw money at a problem. 

It is nonetheless one of the most important recommendations we make.

One of the consistent messages from all of the evidence we heard was that the way that government invests in local transformation is broken. There are an astonishing number of transformation and innovation funds across government that local public services can bid for, all of which have their own criteria, processes and reporting systems.

Each are no doubt completely justified on their own merits (and indeed Nesta has been instrumental in quite a few of them) but there is a strong argument for bringing together at least some of these disparate funding streams into something that can provide a more substantial and structured investment in change.  

It’s not just about rationalisation. We also heard how little attention is paid to evidence of impact in the way that government has funded innovation in the past. Here we can learn the lessons from examples like the i3 Fund in the US, which has the explicit goal of building a body of evidence about what innovations work and consciously incentivises replication of what is proven; in that case focusing on programmes that improve educational outcomes.

We need our own serious national innovation fund for public services transformation that is similarly deliberate about building the evidence of what works and incentivising replication where there are solutions and investing in invention where there aren’t.

Given the scale of the challenges, £5 billion would be a good start. 

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