Innovate from Within - Demos · Innovate from Within An Open Letter to the new Cabinet Secretary Charles Leadbeater

Innovate from WithinAn Open Letter to the new Cabinet Secretary

Charles Leadbeater

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Contents

Executive summary 7

1 The Apple of public service 10

2 The limits of managerialism 17

3 Nine principles for public service renewal 31

4 Innovating from within 51

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Acknowledgements

This commentary has been several months in ges-tation. I’d like to thank Tom Bentley, Demos direc-tor, for his patience, guidance and support. Many ofthe ideas in this commentary have been influencedby him and reflect our conversations as well as hisessay for the journal Renewal, ‘Letting go: complex-ity, individualism and the left’. In addition I’ve bene-fited greatly from reading material by Geoff Mulganand from attending seminars on public service mod-ernisation organised by the Performance andInnovation Unit, as well as my involvement withIDEO, the design and innovation specialists, andHilary Cottam’s Public Service programme at theDesign Council.

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Executive summary

The government faces two imperatives in its approachto public services. The first is an urgent managerial im-perative to improve basic services that are lagging wellbehind public expectations. The second is a political im-perative to restore the role of public services and thecivic values they embody, in a society that is increas-ingly vocal, diverse, open, fluid and part of a global mar-ket. Your task is to meet these two imperatives simul-taneously. The only answer will be to promote radicalinnovation from within existing organisations. Yourfirst step should be to make a major public statementsetting out your view of the value of public services, thechallenges they face, and how the traditional abilitiesof the civil service need to be augmented to help meetthem. Your vision should emphasise:

High standards of efficiency in basic servicesMass customisation of many other services toallow more choice

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Growing scope for user involvement and co-productionMore networked forms of organisation and serv-ice delivery, using technology, to allow servicesto be delivered at home, in the community or atworkGeneration of new types of services, such ashome-based health care or education servicesGrowing stress on the state promoting mutualforms of ownership, policy development and ac-countabilityA new deal between central funding and targetsand local initiative and discretionNew ways to embody and express modern civicvalues through buildings and public spaces

Your approach to achieving this vision should in-clude the following ingredients:

Promoting creative disruption from new tech-nologies, social entrepreneurs and corporateinnovatorsA central state capable of intervention on de-mand to tackle failure or public alarmA far stronger system for learning lessons andspreading ideas at all levels within the public

Innovate from within

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sector, enrolling public service workers in thetask of transformationDevolving more power and responsibility tomanagers, communities, cities and neighbour-hoods committed to identifying and tacklingproblemsPromoting the culture of mutuality in publicservices as well as creating more mutuallyowned community assets.A complete overhaul of audit, inspection andmonitoring regimes, with an emphasis on peer-to-peer reviews and self-improvement programmesrather than punitive arm's length inspectionWillingness to end underperforming pro-grammes and reallocate resourcesNew approaches to the pay and reward of publicservants to diversify the mix of skills and enableproven innovators.

This programme of renewal will only be possible ifyou are willing to lead a complete overhaul of theculture, staffing and working methods of the centralcivil service. The British public have made public re-newal central to the priorities of politics and gov-ernment. The only way to deliver on those expecta-tions is to innovate radically from within.

Executive summary

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1. The Apple of public service

When Steve Jobs set out to create the personalcomputer he did not start with 100 targets to makeIBM’s lumbering mainframes work faster. Jobswanted to create a different way to distribute com-puting power that would unlock the emergent de-mand of a new generation of users. The Apple Macwas a radical innovation because it was disruptive:it moved the industry on to a new level, by allow-ing people to create different ways to use com-puters at home and in the office, to learn, com-municate, share and trade. IBM, meanwhile,trapped by its past success, disdained the many rad-ical innovations emerging from its labs. Big Bluestuck to incremental innovation to the mainframeproducts it already knew well. Eventually it wasoutflanked by radical innovations and fell into adecade-long crisis from which it recovered onlyafter deep surgery.

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The stories of Apple and IBM sum up the dilemmayou face. Apple’s style of radical innovation offers astep change in services but is highly risky, especiallyfor an established organisation. IBM’s incrementalinnovation appears to be safer but eventually leadsto crisis because it fails to keep pace with changingconsumer aspirations.

You have inherited a daunting task. Expectationsof government are rising, and British voters havemade the renewal of public services and the publicsphere a clear priority. But the pressures on centralgovernment and the public sector, while escalating,are also contradictory. Many of the problems facedare increasingly complex and interconnected.Hierarchical organisations cannot control all theforces and resources which influence your success inrelegitimising the role of government. Your politicalmasters seem to want radical long-term change butsimultaneously to minimise political risk, avoidshort-term failures, and retain tight political controlwherever possible. The administrative reforms ofthe 1980s and 1990s left a senior civil service virtu-ally untouched in structure and ethos, but the vastmajority of civil servants now work in executiveagencies and other bodies which are not directlyunder your command. While public debate and

The Apple of public service

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government infighting focuses on the supposed‘politicisation’ of the civil service, the real task liesin motivating and orchestrating a sustained renewalof purpose and working methods, not just across cen-tral government, but across all public services. Manyof the professions on which public service deliverydepends are careworn, demoralised and increas-ingly rebellious. The traditional neutrality, efficiencyand mystery that have characterised the ranks fromwhich you have risen will not be enough to steer gov-ernment and public administration through thisnew, unpredictable environment. Instead, centralgovernment must become a kind of ‘prime contrac-tor’, marshalling and coordinating widely distrib-uted resources and organisations to achieve com-plex, varied tasks.

The legacy systemPublic service renewal will depend on radical in-novation coming from within existing, establishedand often quite conservative institutions. That isyour central challenge: you need a step change inthe performance of many public services but youcannot start from scratch; you have no option butto begin with the legacy you have inherited. Yourmost important task will be to generate the


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resources, skills, will and momentum for radicalchange from within.

That is far easier said than done. Radical innova-tors such as Steve Jobs generally have advantages thatgovernment lacks. Jobs started from a blank sheet ofpaper: a garage start-up. Government starts with aheavy inheritance of ingrained practices, organisa-tions and cultures that are difficult to budge. SteveJobs did not have any existing users whose needs hehad to attend to. That is why he could focus on thefuture. Any change in the public sector risks alarm-ing existing users. Steve Jobs went into a computermarket that was open to new entrants. The room fornew entrants to challenge incumbents in public sec-tor services is very limited. Many of the computercompanies that were around when Jobs launchedApple subsequently went out of business. Public sec-tor organisations rarely go under, despite sustainedpoor performance. Not only is entry into public serv-ices limited, but so too is exit due to failure.

Private sector entrepreneurs such as Jobs employa range of techniques to raise capital to turn ideasinto products, services, businesses and jobs. Jobs re-cruited a team of people who shared the risks, andrewards, inherent in pursuing his visionary idea. Indynamic parts of the private sector, capital and talent


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are attracted to promising ideas. In the public sector,capital and talent are allocated according to plans.Jobs innovated because he realised he did not have allthe answers: neither he, nor anyone else, fully knewwhat home-based computer users would want. Thatuncertainty created room for innovation. The gov-ernment on the other hand abhors uncertainty. It op-erates with detailed plans and targets. Resources areoften only allocated once ‘policy-makers’ at the cen-tre have decided what the answers should be. In thepublic sector it is very hard to rapidly pull togetherteams of public servants, armed with capital, to de-velop a new product, service or organisation to ex-ploit an untried opportunity. It is not clear whatkinds of rewards (money, time, freedom, status) mo-tivate public servants to take creative risks.

Too much of the time the government has seemedintent on improving the public service ‘mainframe’rather than reconfigure how public services are or-ganised, funded, governed and consumed. In termsof the diagram below, the government spends toomuch time in the bottom third, in the left-hand cor-ner aiming to get into the right-hand corner. Manyof the reforms it has launched will, if successful, pro-pel organisations towards the bottom right-hand cor-ner slightly faster. Disruptive innovation meanwhile


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takes services to a higher plane: it allows them to bemore efficient and more creative; to meet needs innew ways; and to service new demand. Incrementalinnovation offers a better version of existing services.Disruptive innovation offers the possibility of a newgeneration of services. Incremental innovation wouldcreate more efficient libraries, schools, hospitals andpolice services. Disruptive innovation would createnew kinds of libraries, schools, hospitals and police


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FFiigguurree 11


services, capable of creating the public goods oflearning, education, health and security in new ways.

Twin imperativesThe government faces two imperatives in its ap-proach to public services. The first is an urgent man-agerial imperative to improve basic services that arelagging well behind public expectations. The secondis a political imperative to restore the role of publicservices and the civic values they embody, in a soci-ety that is increasingly vocal, diverse, open, fluid andpart of a global market. It will be your task to devisea way to meet these two imperatives at the same time.The only answer will be to promote radical innova-tion from within existing organisations.


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2. The limits of managerialism

Labour has tackled immediate problems of publicservice delivery with managerial measures that drivehigher performance through centrally set targets.Targets are not the only tools to have been used. Thegovernment has also encouraged more public/pri-vate partnerships; new technology in the shape of e-government; joined-up government to make de-partments collaborate more effectively; and newapproaches to public service working practices, forexample in the creation of teaching assistants. Yettarget-driven improvement has been the signature ofthe government’s managerial approach: it sums uphow the government tends to think of the problemsit faces and the kinds of solutions it is inclined toseek. The dominant, mainly managerial approachhas been to define problems in terms of delivery,within existing services, organisations andframeworks. The first task is to restate the delivery

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‘shortfall’ in terms of targets for improvement andthen to allocate resources to fix particular prob-lems. Your creation of a framework for radical in-novation from within must start by analysing thestrengths and the weaknesses of this improvement-by-targets regime.

For government insiders, the most successful ini-tiative of Labour’s first term was the literacy and nu-meracy hour, a centrally driven effort to get the en-tire primary and junior school system to address anurgent need: improving performance in reading andwriting. A small, committed team at the DfEE drovethe entire state education system to improve its per-formance in a short space of time. In many ways thisrevolution driven from above was a success. The les-sons are being digested in other departments.Michael Barber, the programme’s architect and nowhead of the Prime Minister’s Delivery Unit, has al-ready said that the literacy initiative will be difficultto replicate elsewhere. It was given very high prior-ity: if all programmes for improvement become pri-orities the entire delivery system would seize up.

Nevertheless, reliance on a target-driven approachis now widespread. The outcome of this managerialcrusade may well be more effective and consistentpublic services that are less likely to fail. But the costs


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could be: a more centralised and controlled state ma-chinery, with less room for creativity, innovation andinitiative; more incremental innovation and betterdelivery of existing services; even less creative anddisruptive innovation to create new services and or-ganisations to deliver them.

The government adopted a managerial approachfor good reason. The public wants high standards inbasic services that other European societies take forgranted: operations done more quickly; streets po-liced more visibly and effectively; teachers who arewell trained, enthusiastic and committed. Citizensare more aware of how British public services com-pare with the best abroad, and of the marked dif-ferences in performance between public serviceswithin the UK. Users’ complaints have quickly be-come the material for media campaigns. The initialtask has been to get public services back up toscratch after long neglect and underinvestment.

Until recently much of the public sector operatedwithout clear targets. Targets have helped to focuseffort in unwieldy bureaucracies; set yardsticks forperformance; and give more information to users, tax-payers and politicians to compare the performance ofdifferent services. Public service agreements betweenspending departments and the Treasury provide a

The limits of managerialism

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framework for assessing how well money is beingspent. Three-year plans for public spending give de-partments more stability and avoid an annual scram-ble for resources. Target setting is an indispensabletool of good management. But it can also be taken toofar when it becomes not just a tool but an organisa-tional way of life.

Target setting has reached the point of diminish-ing returns. There are too many conflicting and de-tailed targets set by a central government machinethat has become more powerful. Detailed targetsoften make staff on the ground feel as though theyare not trusted. Public servants often feel they aresimply at work on a production line delivering a se-ries of centrally determined products. Excessively di-rective instructions that treat front-line staff as ifthey are unable to think for themselves, untrust-worthy or incompetent undermine the motivationand adaptability on which good personal servicedepends.

Catching ‘initiativitis’You will have to contend with ministers who need toensure a steady stream of ‘new initiatives’ thatattract attention. Each new initiative is accompaniedby targets to ensure the money is being well spent.


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Performance against each target has to be inspectedand reported on. As the volume of eye-catching newinitiatives grows, so does the number of targets andthe need for inspection. You must campaign againstmedia-hungry ‘initiativitis’ among ministers byshowing how innovation requires long-term com-mitment rather than short-term wheezes.

Targets drive efficiency within existing depart-ments and services. They do not make public ser-vants more willing or adept at identifying and solv-ing complex problems that span several differentservices. Targets set for transferring existing publicservices online by 2005 do nothing to encourage in-novation to create new kinds of services, for exam-ple. One of your first tasks should be to reassess therole of targets: how they are set, for what purposeand by whom. The first step in your new deal to mod-ernise public services should be a bonfire of centrallyset micro performance targets.

The second step should be to examine the role ofinspectors. To make sure targets are met, inspectorsare appointed. The inspection industry creates itsown bureaucracy and anxiety. The UK public sectorhas a far higher proportion of measurers, checkersand inspectors of performance than most other coun-tries. For every person who delivers a service there


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seems to be another person looking over their shoul-der to check what they are doing. The public sectoris the most inspected part of the British economy.Local authorities, for example, which deliver a largeswathe of public services, are inspected by the BestValue Inspection Service, Her Majesty’s Fire ServicesInspectorate, Her Majesty’s Inspectorate ofConstabulary, the Office for Standards in Education,the Social Services Inspectorate and the Benefit FraudInspectorate. The health service has its own inspec-tion and improvement process. These inspectors re-port to different departments, rarely collate theirfindings and have quite different remits and styles.

Very little work seems to have been done on the con-tribution this vast inspection industry makes to cre-ating better public services. The case for external in-spection to assess whether services are meeting statu-tory and other targets is very strong, given the lack ofcompetition in public services. Inspection can help todeter fraud, improve performance, increase public ac-countability and spread good practice. However, thecosts of inspection are also very high. The direct costof inspections in local authorities is conservatively es-timated to be £600 million a year. The indirect costs interms of staff morale, time and resources diverted tocollate material and deal with inspections will be


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very large as well. Most worryingly, there has been nosystematic attempt to link methods of inspection toimprovements in performance through learning,spreading good practice and creating a capacity forchange within organisations. Another of your earlytasks should be to examine inspection regimes for pub-lic service to make sure they are designed to promoteimprovements in performance.

Targets for public services will not work in somekey areas because government is often only oneamong many players jointly creating a public goodlike better public health, a cleaner environment orsafer streets. Efforts to improve the quality of lifedepend on the behaviour of third parties – local au-thorities, police, judiciary, voluntary sector and pri-vate contractors, businesses large and small as wellas citizens themselves – who may not respond instraightforward ways to legislative commands, fi-nancial incentives or instructions. You cannot renewa community, create culture or revitalise public spaceby issuing a set of instructions on how to do so.

None of this is helped by a myopic culture of ac-countability: everyone runs in fear of the PublicAccounts Committee and its checks on how publicmoney is being spent. The current approach to au-diting public spending is too focused on processes


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and rules rather than outcomes; micro issues ratherthan strategy; steady as you go administration ratherthan innovation to create new sources of publicvalue. Unless you can shift this culture of adminis-tration and accountability you will not open uproom for innovation, creativity and risk-taking.

Delivery and centralisationThe target culture is becoming the enemy of change.The government says it is focused on ‘delivery’. Yet atthe heart of government some people seem to believesimplistically that delivery should automatically andmechanistically follow from central instruction. Toomany targets, tied to too many initiatives, with too lit-tle consistency and too little clarity about priorities arethe enemies of good service. The public sector needstargets to make sure resources are devoted to servicesthat matter to consumers. Those targets need to beabout outcomes and general priorities rather thanmicro details. They should be set within a frameworkof trust, long-term planning and flexibility to meetlocal circumstances, demands and opportunities.

One recommendation would be to take every per-manent secretary and several cabinet ministers toSingapore to see its inspirational National LibraryBoard, which is in the middle of an eight-year


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Singapore $600 million (approx £230 million) pro-gramme to build about 90 new libraries. The board,which was set up after three years of patient and con-sensual policy development, has been set a few, verygeneral but very exacting targets, for example to im-prove library usage and membership by a factor offour or five over eight years. The central target is totake library usage from fewer than 10 million visits ayear at the outset to more than 30 million visits. Oneyardstick is that more people should visit librariesthan cinemas. Apart from one review after four years,the board has been left to get on with its job. It isachieving its very exacting improvements in per-formance by creating the most innovative library sys-tem in the world, with libraries in shopping centres,theatres and railway stations, complete with internetservices, music listening booths, cafés, performancespaces and self-service scanning systems for checkingbooks in and out. Had Singapore’s National LibraryBoard been set micro targets on which it was regularlyinspected, the board would have been incapable of theinnovations that have made going to the library inSingapore as attractive as shopping. The NationalLibrary Board is a disruptive innovator, which is bothfar more efficient than most traditional library serv-ices and more creative.


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In the UK there is a risk that a vicious circle mightset in as the government responds to the public sec-tor’s failure to meet targets, with stronger centralisingmeasures to drive the machine harder. When Labourcame to power the centre of government was weak interms of long-term strategic thinking and driving pol-icy delivery. The Prime Minister would ask for some-thing to be done and find that he had little power tomake sure it happened. The Prime Minister’s PolicyUnit was one of the few tools the PM had to chase de-livery of policies with departments. As a result thePolicy Unit had little time for long-term thinking.

The centre is also vital in responding to crises.People still turn to the state to take responsibility forsolving a range of issues such as family breakdown,community decay and crises in food production.These issues can flare up suddenly, accompanied bya media-driven panic (foot and mouth, BSE and theMMR vaccination controversy are all recent exam-ples). Foot and mouth is a prime example of a crisisthat is sorted out only with extreme measures andcentral coordination. A strong centre is vital for ef-fective government. So it was quite understandablethat after the 2001 election the government greatlystrengthened capacity at the centre, which nowcomprises several overlapping spheres of influence.


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As a result the centre of British government is nowan ‘arms race’ of strategic thinking between differ-ent parts of government. It is good that more strate-gic thinking is being done. But you need to regulatethis escalating arms race.

Around 10 Downing Street, in addition to thePolicy Unit and the Cabinet Office, there is theStrategic Communications Unit, the Centre forManagement and Policy Studies, the Performanceand Innovation Unit, the Prime Minister’s ForwardStrategy Unit, the Delivery Unit and the Office ofPublic Service Reform. In addition the SocialExclusion Unit and the Office of the e-Envoy reportdirectly to 10 Downing Street. As government de-partments compete for resources on the basis oftheir long-term plans, many departments have de-veloped internal think tanks, policy units and strat-egy teams. The Treasury has increased its capacity forlong-term policy thinking to match that developingin 10 Downing Street and among departments. TheChancellor has a team of special advisers and acouncil of economic advisers, akin to a policy unit,which can challenge departmental strategies.

Many aspects of this stronger centre have provedeffective, chief among them the Performance andInnovation Unit. However, the centre of government


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has taken on a large number of roles (crisis man-agement, target setting, driving delivery, medium-term and long-term policy thinking and communi-cations coordination). You sit in the middle of sev-eral competing centres of power. The rest ofgovernment doesn’t know which way to jump untilthey get a decision from the centre, which can be-come a bottleneck. Policies patiently developedwithin departments, often using best practice ofgathering evidence and involving stakeholders, canbe tossed out with a wave of an imperious and ig-norant hand in the Treasury. While the quality ofstrategic thinking may go up, the ability to deliveron the ground may be further jeopardised if astronger centre strangles local initiative. One ofyour roles should be to challenge the centre to pre-vent it from becoming an innovation bottleneck.

This mechanistic, centralising view of the world is sopowerful because it fills a void: the government’s lackof a long-term coherent political strategy for publicsector renewal. A mark of that lack of coherence is theway the Prime Minister emerged from the 2001 electionclaiming that privatisation and public/privatepartnerships were his ‘big idea’ for public service im-provement. The involvement of the private sector in de-livering public policy goals is neither new, revolutionary


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nor big. Our children read school textbooks publishedby commercial publishers. General practitioners are in-dependent contractors within the NHS. They prescribedrugs made by private drug companies. Regulated pri-vate sector companies provide essential public services,our utilities and telecommunications. The use of privatefinance to create public infrastructures is not new: theinfrastructures of the industrial economy were largelycreated by private capital.

Creating a fresh approachYour task will be made easier only if you confront yourpolitical masters with the downsides of the currentmechanistic, target-driven approach to reform andtheir own lack of a coherent wider vision, both or-ganisational and political, of what modernised pub-lic services should look like. You need to persuadethem to take a different approach: one which will setoff a process of innovation from within public serv-ices. The government you serve has yet to develop aconsistent philosophy of public service, how it shouldbe organised and renewed. You need to help it acquireone. The heart of that should concern the way publicservices respond to new user demands, with newservices and organisations that are structured, owned,managed and held to account in new ways.


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Britain needs a new generation of public servicesfit for a more open, diverse society in which peoplewant more choice and expect more opportunities tovoice their views. That new generation of publicservices will serve a mobile society in which the nu-clear family is in a minority, jobs are rarely for life,most people work flexible hours in the service sec-tor, firms compete in global markets, life expectancyis increasing, education and learning last far longer,consumers are better informed, values are more di-verse and people expect a say in what is going on. Ifyou started from scratch to design services for sucha public you would not come up with the public or-ganisations that we have today: hierarchical; com-mand and control in approach; and mass producersof standardised services.

You must lead a wave of civic innovation to cre-ate services that inspire pride and loyalty, thatspeak for and sum up the spirit of the times, andthat enhance Britain’s capacity to solve public prob-lems in the future.


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3. Nine principles for public service renewal

You are the chief executive of UK Public Services, Inc.Chief executives provide leadership: they set their or-ganisation testing but exciting challenges, with a con-fident vision of the future that generates a momentumfor change and a willingness to challenge conven-tional wisdom. That is why it will be so vital for youto provide, in public, a sense of mission for the civilservice and through that to speak for the role that pub-lic services should play in modern society. Early on inyour tenure you should make a major public speechin which you set out your view of the value of publicservices and the challenges they face. This should notbe a crass mission statement, nor an artificial annualreport, but a substantive public statement whichshows how public services can serve the changingneeds of the society that finances them.

Your chief goal should be to show how the cultureof impartiality, neutrality and analysis, which has

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been so powerful in the civil service, can be aug-mented by a new drive for better leadership, innova-tion and service development in which public servantsare able to identify opportunities for creating new ser-vices and to mobilise resources to do so. The civil ser-vice’s job is not just to administer resources fairly andefficiently but to make sure they are applied to gen-erate more public value for taxpayers. That is not justabout devising clever policies, but about drivingchange in public organisations. Your task will be to cre-ate a new cadre of civil servants capable of moving be-tween administration and innovation.

The government’s ability to deliver public policygoals will increasingly depend on pulling together re-sources and people from many different organisa-tions: public and private, mutual and voluntary, largeand small, staff and consumers. The role of the civilservice and politicians should be to orchestrate thesealliances for change. Politicians should provide lead-ership: the goals to mobilise around. At the momentpoliticians often want to be, and are expected to be, incharge of every last detail. The civil service’s job shouldbe to act as the ‘prime contractor’ for public services,to draw different ingredients together and to driveprojects forward. The public service does not need toprovide or even manage these resources directly.


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Public services embody civic values. They distributegoods and services not according to ability to pay butaccording to need and desert, based on political de-cisions made about how resources should be used.Every act of using a public service or entering a civicspace should underline those civic values. Your busi-ness (UK Public Services, Inc) will thrive only if theservices it helps to create and run are seen as efficient,attractive and value creating. The problem is that toomany public service organisations seem so out of kil-ter with the times. They seem designed for anotherera (as indeed many of them were) and for a ‘public’that was far more deferential, accepting and homo-geneous in its tastes and needs. You need to stand upfor a new vision of a new generation of public servicesand a new generation of public servants.

Nine themes should be at the heart of what youhave to say.

1 High efficiency, few targetsWe should set high baselines for efficiency in basicpublic services. This should centre on a few very gen-eral targets for organisations and services. The prob-lems faced by public services are to some extent a re-flection of the problems of all services which arelabour intensive and have relatively low productivity

Nine principles for public service renewal

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in an economy in which productivity has risen agreat deal in manufacturing, resource use and tech-nological power. By contrast with advances in tech-nology, in particular, labour-intensive services seemslow to change.

The widespread application of technology will bepart of the answer to drive up basic performance inmany services. The Singapore library system, for ex-ample, used to suffer from very long queues to checkout books. When the National Library Board was setup in the mid 1990s its first priority was to eliminatequeues. It did so not by employing more librarians, butby creating a system of radio tags for every item in itsstock so that they could be checked out by borrowersscanning them over a computer screen. All fines arepaid with credit card machines. This high technologyplatform for customer self-service has allowed librar-ians to move from processing books and fines to pro-viding new services such as research, music recitalsand learning programmes. (The next stage, which theNLB is about to prototype, is the creation of a ‘do ityourself’ library for adults in which borrowers will re-turn books directly to the shelves, as you would in yourown home, using technology that will tell peoplewhen they have put the book in the right space.)

We need to follow the Singapore lead: radical


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innovation to make services more efficient, thus al-lowing people to be freed from basic processing tofocus on the face-to-face services users value.

2 Different people, different choicesAbove a basic minimum, public services should providefar more choice about types of service, for a far morediverse population. The most fundamental challengefacing us is how to generate civic commitment in a soc-iety which is mobile and fluid, in which people wantpersonal autonomy to define their version of the goodlife. Command and control systems of allocating goodsand services, whether those be language lessons orheart operations, are at odds with this desire for au-tonomy and choice.

In the long run, we need an education systemwhich is capable of delivering the basics to everyone,with a smaller core national curriculum, but one thatis increasingly able also to deliver individualised ed-ucational programmes tailored to the specific needsand learning styles of different children. That wouldbe an education system that promoted equality of op-portunity and high standards in the basics, but alsotapped into the individual aspirations and motiva-tions of children. People display different kinds of in-telligence and these are drawn out in different


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settings. Learning needs to be organised around in-dividual curiosity and aptitude, responding to the in-dividualised nature of intelligence. The middleclasses are already opting for choice in education. Theaim should be for all families to have a choice of a var-iety of types of school, differing in ethos and aims,to send their children to.

3 Users as co-producersConsumers do not just want more choice, they wantmore say and involvement. In public services theuser is invariably an essential part of the productionprocess: a co-producer of the service. Education is use-less without avid learners. People recover from op-erations only by taking exercise and eating properly.The tax system increasingly works thanks to a masssystem of self-assessment. Neighbourhood safety de-pends on neighbours who look after one another.Most of the public goods that people most value re-quire user involvement.

Better government and better public services de-pend on more user involvement. Deprived commu-nities cannot revive themselves without public sup-port; but they cannot be revived by the state either.Outside resources need to be matched by renewalfrom within. Successful public services of the future


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must recruit users as part-time producers and evengovernors, rather than keeping them at arm’s lengthas consumers.

Participatory approaches to budgeting and policy-making will thus be central to an open, innovativepublic service. In Porto Alegre in Brazil, in Denmarkand Sweden, funds are set aside for neighbourhoodsand community groups to bid for.

Modern public services need to be designed withuser participation in mind because the most effi-cient and effective services will rely on a high levelof self-service.

4 The ‘soft’ power of values and expectationsPublic goods, like health and a clean environment, areincreasingly created in society. They are not deliveredto waiting citizens from a state-run production line.These public goods are created by complex, mutuallyadaptive systems, in which the state is just one – largeand often clumsy – player among many. The public ser-vices of the future will need to work with the grain ofthis complexity.

Markets were opened up to allow more individualchoice. We are now trying to tackle the collectiveconsequences: traffic congestion; unacceptably highlevels of material waste in the environment; the


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insecurity of many public spaces; the implicationsfor children of relationship breakdown. These col-lective issues cannot be resolved through old-styleauthoritarian public institutions that rationedchoice and access to resources. Regulated marketscan play a larger role in shaping public behaviour:for instance, emissions trading vouchers and roadpricing can play a vital role in creating a better en-vironment, especially in cities.

The challenge is to evolve new kinds of public in-stitutions that can influence public behaviouramidst its complexity, diversity and flux. The ‘hardpower’ of targets and instructions needs to bematched by the ‘soft’ power of influencing values,behaviour and expectations. Instructions from onhigh alone will not work.

5 Interactive governmentGovernment will have to become more porous, re-sponsive and networked, and operate increasinglythrough partnerships with the voluntary, commu-nity and private sectors. A far-sighted report for theDutch government, Contract with the Future, pub-lished in May 2000, put the challenge this way: ‘In anetwork society, government is more frequently oneof the players and will have to cooperate with others.


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Government action will increasingly have to be col-laborative, interactive, fast and custom-made. Societyis no longer the object of policy, but helps to shapegovernment policy.’

Channels for government and citizens to engage indispute, debate and policy-making will multiply withdigital television and the internet. People will in-creasingly want to define themselves, and with thattheir relationships with government. Citizens willmake greater demands on government. They will wantmore custom-made services, more options, more par-ticipation and more influence. The report concludes:‘Government and citizens are increasingly operatingin a network society in which they are becomingmore and more equal and in which the strength of gov-ernment is determined by the delivery of quality andby the joint creation and sharing of policy. Indeed pol-icy can be said to be a co-production.’

6 Networking opportunitiesHuge opportunities will emerge from this combin-ation of higher basic efficiency, often thanks to newtechnology processes; increasing involvement ofusers as ‘co-producers’; and growing mass customi-sation of individualised services; as well as the in-terchange of skills and services between public


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institutions and civil society. We need public sectororganisations, managers, methods of accountabilityand types of ownership which work with the grainof these developments.

Government organisation is still largely dominatedby hierarchical structure, centralised command andcontrol over resources, a workforce organised aroundrank and a chain of command in which scope for ini-tiative is concentrated at the top. Networked organi-sations turn this model on its head. They operate withsimple, centrally set rules that allow decentralised de-cision-making over how resources should be appliedon the ground to meet users’ needs. The distributedtechnology of the internet and related communica-tions networks allow highly decentralised, inde-pendent activities to achieve a level of coordinationtraditionally associated with structured organisa-tions. These networked organisations offer the prom-ise of greater flexibility and adaptability combinedwith coordination and clarity of purpose.

A good example is the impact digital televisioncould have on health services. Digital televisionshould be near universal by the end of the decade.Information of the kind currently available on theinternet will be available through the television set:a pilot digital health service run by Telewest, the


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cable television operator, offered 18,000 pages of in-formation, akin to that available on NHS DirectOnline. A television set will be able to deliver inter-active consultations in which a patient calling in toNHS Direct, for example, would be able to see anurse onscreen who could advise them on theirsymptoms. In time the video link on this servicewould become two-way so that the nurse and patientwould be able to see one another. People recoveringfrom surgery at home will be able to watch relatedprogramming to help them through physiotherapy.In time telecoms links will allow doctors to remotelymonitor a patient’s vital signs.

However, developing these more advanced, inter-active services with richer content will require theNHS to form partnerships with media, technologyand broadcasting companies. The platforms for dig-ital television delivery are mainly privately owned.The skills for creating attractive television contentare outside the NHS.

The internet will also play its role. In the nearfuture patients will be able to access information tocompare the performance of different NHS Trusts,hospitals and even surgeons. Patients should beable to book appointments online, review theirelectronically held records and get electronic


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prescriptions. However, the greatest potential forthe internet may be in creating networks of self-helpamong carers and patients. These peer-to-peer ap-plications would build on an already thriving self-help sector.

By 2010 it should be routine for a patient leavinghospital after an operation to be given: an NHSDirect telephone number to seek advice on recovery;a website address from which they could downloadrelevant information through either the internet ordigital television; a list of digital television pro-grammes relevant to their recovery; an interactivetelevision service to allow them to see a nurse to ad-vise them while they talk over the telephone; a listof email addresses for patients in their locality whohave recently been through the same operation andwho are ready to exchange experiences; and the in-ternet address of a national self-help group whichwill provide support and advice. Already about 80per cent of ‘health incidents’ are dealt with at home.Surveys show that patients want more home-basedhealth care. The advent of digital technology shouldmake it possible to take some large strides away fromthe hospital-based health care system of the twenti-eth century to a more home-based health care sys-tem in the twenty-first century.


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7 Bringing back mutuals Future public services should explore new forms ofcommunity and of mutual ownership and involve-ment to bring them closer to the people they serve, togain access to additional finance and to generate newideas for services. Innovation often means recuperatingolder ideas, in this case mutual versions of education,welfare and health.

Britain has a rich tradition of mutual self-help andvoluntary organisations, and millions of people are ac-tive in organisations as diverse as the Salvation Army,the Women’s Royal Voluntary Service, the TerritorialArmy and the Police Specials. About 80,000 peopleserve in residents’ associations. There are 350,000school governors. All these are part of the extendedlife of the civic sphere.

Mutuals play a critical role in providing many pub-lic goods: childcare and care for the elderly, adulteducation, the classes of the Workers’ EducationalAssociation and community safety, as well as pen-sions, life assurance and mortgages. The idea of mu-tuality combines the promise of social cohesion andcollective action, with the principle of decentralisedself-organisations within a market economy. Mutualsare often outside and at odds with the bureaucracyof the public sector, because they stress the value of


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voluntary and collaborative action. Yet the mutualethos is also at odds with the individualism of themarket. Mutuals and clubs allow people to band to-gether to help one another: that mutual spirit, notstate provision, should be at the heart of the civicsphere.

Public services will be more likely to thrive wherethey help to promote an ethic of mutual self-help.Many of the most promising services run in libraries,for example, revolve around reading groups andhomework clubs. Self-help networks are vital inhealth services. Voluntary organisations have beenthe pioneers of mutual approaches to crime andsafety, from experiments with restorative justice toneighbourhood watch. Churches still do a hugeamount of work with informal youth programmesoutside the state sector.

The best way to promote sustaining civic values isfor the state to act as the hub for a wide variety ofclubs, mutuals and voluntary associations. Thatwould mean more ownership of and even account-ability for services passing from Whitehall to directstakeholders among users and the wider community.At the very least, more government programmesneed to be designed – as Sure Start and the New Dealin Communities were – to kick off a cycle of local


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involvement and regeneration. At its most ambi-tious, this approach needs to rethink the future ofpublic services as commonly owned mutuals. Not theNational Health Service but the Mutual HealthService. Not the Department for Work and Pensions,but a new generation of Work and Pensions Mutuals.

8 Devolving power from the centreA more diverse, self-governing, networked and mutualstate will only evolve if there is greater devolution ofpolitical power and managerial discretion. The newpublic sector needs to be built on a new deal be-tween the centre and localities, in which each respectsthe other’s role.

The central job of politicians is to articulate theoutcomes people expect public services to help toachieve, and to ensure as far as possible that systemsexist, both inside and outside the state, to deliverthose outcomes. The more these outcomes can be de-cided on by an open political process, in which peo-ple feel engaged, the more likely they are to attainlegitimacy. That is why further devolution of politi-cal power to regions and cities to start making theirown decisions and taking responsibility for their ac-tions will have to be part of the agenda of public serv-ice modernisation. The arcane dispute between the


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Labour government and the government of Londonover the financing of the Underground stems froman incomplete process of devolution. London shouldhave the power but also the responsibility of organ-ising a decent transport system.

Devolution of managerial responsibility will alsobe vital. Politicians should set general outcomesand basic standards for education, health and polic-ing, but beyond that the centre should not prescribein detail how budgets should be spent and servicesshould be organised. That should be left to local dis-cretion. While the overall objectives might be thesame, the way they are achieved in different placeswill be different. The electors in those cities shouldbe allowed to vary the outcomes they seek away fromnational programmes. Cities should become knownfor the distinctive quality and imagination at workin their public services.

9 Public services and good designPublic services and public servants must becomemuch more adept at communicating the value theycreate. One reason why the private sector is widelyseen as being ‘ahead’ of the public sector is the in-vestment it has made in the last decade in brandingto persuade people to see products and services as


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part of a lifestyle they aspire to. When people buy pri-vate sector products and services these days they arepartly buying into ideas of what these services rep-resent. Although the public sector has some out-standing, if slightly worn brands (the NHS, theInland Revenue, the BBC) very few could claim to beaspirational.

The best way to communicate public value is notthrough clever marketing programmes but throughtangible changes to the environment in which peo-ple work and take leisure. The value of public servicesneeds to be evident in the design of public spaces,whether they are buildings, online environments,parks or bus stations. Public sector modernisationneeds to be built on a new approach to design whichgives users a creative voice in how services are pre-sented to them. As private spaces often become in-creasingly interchangeable and functional (airports,shopping malls, gyms, offices) so there will be op-portunities for the public sector to set itself apartthrough the quality of the design of its environ-ments. Redesigning public environments and spacesis one way to re-imagine what they are for and howservices might be organised in a different way. Designand architecture are one way to unlock the publicimagination of what public services might become.


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Many public institutions could not be mistakenfor anything else. Whether it is a school, a prison, aresidential care home or a town hall, the DNA ofstate power and paternalism is imprinted in the ar-chitecture, the design and layout of the buildings re-flects the top-down, command and control philoso-phy behind the services.

New buildings and public spaces should translateinto improved services, a richer public space and astronger sense of shared civic purpose. In the pasthigh-quality design of public buildings and utilitieswas one hallmark of the standing of the public sec-tor: the original red phone boxes and theRoutemaster bus are outstanding examples. In thenineteenth century public buildings embodied therise of new public authorities that oversaw ourlives: local authorities. In the postwar era the pub-lic sector was at the forefront of modernism and de-sign, in building projects such as the Royal FestivalHall. Equally, poor design, particularly of publichousing in the 1960s and 1970s, cast a long shadowover the entire public sector. Those buildings sym-bolise all that was wrong with the cheap, masspublic sector.

A new generation of public services needs new build-ings and spaces to house them. New schools, hospitals,


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bus stations, parks and benefit offices should embodythe civic spirit of the times. The danger is that newbuilding and design programmes will be driven by asearch for efficiency and shallow comparisons with theprivate sector: hospitals that feel like hotels; benefit of-fices that feel like banks; canteens that mimicMcDonalds. The award-winning new Peckham library,which embodies a confident sense of civic purpose, hasseen book lending rise by 400 per cent since its open-ing. The best way to communicate distinctive civic val-ues is to deploy design imagination in public buildings,spaces and products, as Tate Modern, the MillenniumBridge, the Walsall Art Gallery, the Eden Project andHuddersfield’s football stadium all show. Well-designedpublic spaces excite people as users and as staff. Youshould preside over the biggest public building pro-gramme for decades. You need to make sure it deliversan inspiring ethos for public services.

In sum your vision of the future of public servicesshould emphasise:

delivering high standards of efficiency in basicservicesmass customisation of many other services toallow more choice


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growing scope for user involvement and co-pro-ductionmore networked forms of organisation and ser-vice delivery, using technology, to allow servicesto be delivered at home, in the community or atworkgeneration of new types of services, such as ahome-based health care or a home-based educa-tion servicegrowing stress on the state promoting mutualforms of ownership, policy development and ac-countabilitya new deal between central funding and targetsand local initiative and discretionnew ways to embody and express modern civicvalues through buildings and civic spaces.


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4. Innovating from within

Delivering will require drive and ambition from thecentre but also commitment and ideas from re-gions, cities and individual schools, hospitals andcommunity programmes. The challenge is to createa strategy which maximises operational diversity, al-lows local innovation and provides greater practi-tioner autonomy, but which maintains clear mini-mum standards, overall purpose and organisationaldrive.

The government has moved in this direction. Yourjob must be to push them further. The recent healthwhite paper allowed groups of top-performing hos-pitals greater autonomy and discretion. They were li-censed to operate with greater freedom. The LocalGovernment white paper picked up this idea of‘earned autonomy’. Estelle Morris, the educationsecretary, is pursuing a strategy to allow more di-versity around a smaller core national curriculum

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for 14–19 year olds that should allow schools morediscretion over how they organise themselves. Boththe Chancellor and the Prime Minister have said theysupport the idea of devolving responsibility for de-cision-making. The Sure Start and New Deal forCommunities programmes were designed to lever-age community involvement. The government hasjust started to move away from a reliance on centraltarget setting and the micro management of funds.However, it is doing so incrementally and withoutany clear vision of the future. You need to get yourpolitical bosses to recognise that.

Renewal will require many ingredients, amongthem:

promotion of creative disruption from new tech-nologies, social entrepreneurs and corporate in-novatorsa central state capable of intervention on de-mand to tackle failure or public alarma far stronger system for learning lessons andspreading ideas at all levels within the publicsector, enrolling public service workers in thetask of transformationdevolving more power and responsibility to man-agers, communities, cities and neighbourhoods


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committed to identifying and tackling problemspromoting the culture of mutuality in publicservices as well as creating more mutuallyowned community assetsa complete overhaul of audit, inspection andmonitoring regimes, with a growing emphasison peer-to-peer reviews and self-improvementprogrammes rather than punitive arm’s lengthinspectiona willingness to end underperforming pro-grammes and reallocate resourcesnew approaches to the pay and reward of publicservants, which would enable proven innovators.

Among these many ingredients you should highlightthree aspects: a new approach to innovation within thepublic sector; a new management framework for pub-lic services based on trust rather than targets; andchanges to the culture and make-up of the civil service.

InnovationInnovation is the public sector’s Achilles heel. Insome respects there is too much radical, policy-ledinnovation in British government. It swings betweenoccasional bouts of extremely high-risk, system-wideinnovation, in which all eggs are thrown in the

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same very large but fragile basket, and long periodsof stasis when nothing much seems to change.Radical attempts at public policy innovation haveoften gone badly wrong: the Child Support Agency,Individual Learning Accounts, the National AirTraffic System, the AS level exams, the Poll Tax andRailtrack are just some recent examples. These arenot evidence of a system that doesn’t innovate butone that innovates in the wrong way, led by ideologyand policy rather than user need. The public sectorinvariably innovates under the wrong conditions: ei-ther in crisis, when the situation has got out of hand,or when a political party is in an unchallenged elec-toral and ideological position and so can forcethrough its plans without check.

The Labour government has made various efforts topromote innovation through the creation of pilotsand special zones. However, these are often too mar-ginal to create new ideas. Often pilots are held atarm’s length as if they were experiments in a lab,rather than developed to create new ideas. Bottom-upinnovation can only get so far without changes to theframework of resource allocation and management.Models of innovation based on venture capital fund-ing, which are based on a very high failure rate, aredifficult to transplant to the public sector.


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Complex systems that create public goods need acapacity for constant evolution, adaptation and in-novation. The public sector needs a model of accel-erated evolutionary innovation.

Evolutionary innovation involves at least six main in-gredients. First, the creation of diversity. In biology thiscomes about through genetic mutation. In public in-stitutions diversity can only come from imagination,creativity and maverick entrepreneurship, operatingwith enough room for manoeuvre to try out new ideas,locally and centrally. As well as a stream for the pro-motion of high-flying young civil servants, we need a‘mavericks’ programme’ to recruit and develop civic en-trepreneurs. No one should be eligible for a job in thesenior civil service unless they have been involved in astart-up of a public or private sector project.

Second, the selection of more promising devel-opments. In biology, promising mutations are se-lected through the force of natural selection, findingwhich is fittest for the environment in question. Inpublic policy, we need to set aside funds to investsystematically in developing promising pilots andmodels, across the public sector. The public sector in-vests far less in research, development, innovationand entrepreneurship than the private sector. Oneuseful target would be to benchmark public sector in-

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vestment against private investment in its innovationand R&D for public services.

Third, the best new ideas need to be able to spreadand reproduce. In biology, sex and genetics providethe transmission mechanism for successful muta-tions. In public policy we need much more rigorousand effective mechanisms to spread routines and thethinking behind best practices, including franchis-ing good ideas and allowing more successful publicorganisations to take over less successful ones.Fourth, the unsuccessful must be allowed to fadeout. The public sector needs to be far more effectivein unlearning routines, practices and working meth-ods that no longer deliver. Fifth, keep it simple. Themost successful adaptations in nature tend to be verysimple. The more complex an innovation is, the lesslikely it is to succeed. Sixth, innovation is impossiblewithout spare capacity, time and space. A perfectlyhoned machine, in which each part has a specificjob, leaves no room for innovation.

One of your first tasks should be to gather casestudies of the most innovative public service organi-sations in the world to expose to your senior civil ser-vants and other public service managers. Singapore’sNational Library Board, for example, has innovation asthe central means to meet its exacting improvement


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targets. This comes from several ingredients. Drivefrom the top is vital to set goals and also culture. TheNLB’s chief executive, Chris Chia, who is not a librar-ian but an information technology specialist, sets theculture in which one motto is ‘no sacred cows’. As anexample, the NLB is piloting a library aimed atteenagers in which books are not on display. The‘bookless’ library will focus instead on activities thatteenagers enjoy and allow them to order books froman automatic system. Chia has created a system for pro-totyping new services, based on a central ‘services de-velopment unit’ which works on ideas from all overthe organisation. The NLB describes itself as a ‘projectcentric’ organisation. Most staff are involved in atleast one project a year to improve services in their li-brary or across the system as a whole. Three other prin-ciples underpin the NLB’s sustained innovation:

One idea but many iterations: having developedthe idea of locating libraries in shoppingcentres, the NLB is now on its sixth version ofthe idea. Each repeat develops new services.Multiple pathways to the future: libraries servea diverse population, so they cannot deliver onesize to fit all services.Run before they catch you: develop ideas that


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are always ahead of where consumers expectyou to be to create a sense of momentum.

You need to do for the civil service what Chris Chiahas done for the NLB in Singapore.

From targets to trustYou need to put in place a new framework for pub-lic service improvement that requires less detailedmicro management from the centre. That meansmoving from accountability based on strict adher-ence to detailed targets, to one based on trust andlicensed freedom to operate based on performancethat consistently exceeds minimum targets.

Rigid rules of accountability corrode trust. Thepublic sector needs a framework for funding whichallows public bodies to earn the trust of central gov-ernment, its customers and taxpayers. Public bodiesshould be rewarded by gaining greater freedom fromdetailed interference. Trust has to be earned; itcannot be taken for granted. The centrepiece for aframework of trust should be a series of long-termcompacts between government and service providers.Government would be able to rest assured thatmoney was being well spent without the need forwasteful bureaucracy. The institutions being funded


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would feel they were trusted to get on with what theyare good at without constantly looking over theirshoulders. As a result they would be more likely vol-untarily to exceed the terms of their compact.

The first step would be to show that the peoplerunning public institutions deserved to be trustedbecause of their mix of skills and competences. Thesecond step would be to attend to the way that in-stitutions are governed. Generally we trust peoplewhen they are open. We don’t trust people whoseem to have something to hide. If public institu-tions want to escape detailed and continual inter-ference from the centre they have to be open to localscrutiny and accountability about the way theymake decisions.

The third step would be to offer some cast-ironguarantees to taxpayers and customers about qual-ity of service and how customers who have beenpoorly treated can seek redress.

Fourth, compacts would require honesty aboutfailures. The Millennium Bridge, for example, con-tinued to claim public sympathy even during itscostly re-engineering because of the way its earlyproblems were owned up to. Failures that are coveredup ultimately lead to a loss of trust. Failures dealtwith openly can deepen trust.


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Fifth, trust has to be open to challenge and con-test. If trust in someone goes untested, it can quicklyturn to complacency. Targets were introduced tospur producers to improve performance and to chal-lenge vested interests that were opposed to reform.Vested interests among public sector producers arestill pervasive and powerful. Inspection systems thatseem harsh and are not backed by resources to helporganisations improve simply create demoralisationand anxiety. We need to create ladders of improve-ment for organisations to climb. The heart of a newinspection system should be peer-to-peer self-assess-ment and self-inspection, with beacon organisationsfunded to lead and help others. The AuditCommission’s approach to improving performancethrough audited self-assessment should be adoptedacross the public sector.

Sixth, trust is rarely completely open-ended.Contracts can provide the baseline for a relationshipof trust, a reference point to start from and go backto. Institutions such as NHS Trusts and LEAs shouldsign up for long-term compacts with departments andcommunities that set out their goals, responsibilitiesand funding. The better the past performance, themore likely the organisation would be to be awardeda long-term deal.


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The civil serviceYou must acknowledge at the outset that the culture,working methods and outlook of the senior civilservice, the service through which you climbed andmade your career, is one of the biggest obstacles tochange. We need a civil service that is recruited,paid, managed and organised to deliver the innova-tive, diverse and devolved public services that wouldfit with modern society. You need to develop newcadres of public servants who are at ease as innova-tors as well as administrators, leaders as well as ana-lysts, civic entrepreneurs as well as policy advisers.

The civil service needs to reduce its reliance on in-telligent generalist policy analysts, and recruit agreater diversity of people, with different skills andparticularly with a background in management,marketing, retailing and service delivery. Value inpublic services is created at the front line, by man-agers and staff working directly with clients. Therole of the centre should not be to instruct or con-trol these people, but to support, encourage andguide them.

The civil service is one of the most hierarchical or-ganisations in the country. Access to meetings andinformation is determined by a series of ranks im-penetrable to outsiders. That hierarchy needs to be


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broken up with promotions and pay for younger peo-ple with bright ideas and energy. In general, money,responsibility and opportunity should be shiftedaway from rank and length of service, and towardsimproving rewards for contribution. Frustrationwith the pace of change in the civil service is one rea-son why Labour ministers have relied so heavily onoutside advisers. Future governments are unlikely tobe different. A body of external policy advisers, frommanagement consultancies, think tanks, charitiesand non-governmental organisations, now chal-lenges the civil service’s role as prime policy adviser.If the civil service wants to regain the initiative it hasto show far greater capacity for innovation and de-livery.

Increasingly the government’s ability to deliverpublic policy goals will depend on its ability to or-chestrate resources and people from across many dif-ferent organisations, public, private and mutual,large and small, staff and consumers. The job of thecivil service will increasingly be to act as the ‘primecontractor’ for public services to draw all thesedifferent ingredients together and to drive projectsforward. As a prime contractor the senior civil ser-vice can afford to be smaller than many of its sup-pliers, whether those suppliers provide policy advice,


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IT or other services. The civil service needs to excelat accessing and orchestrating these resources, in-side and outside the public sector, rather than pro-viding them directly.

Low turnover of staff in the public sector suggeststhat pay is not a major issue or cause of dissatisfac-tion. The overall public service package, includingholidays, flexible hours, job security and pensions,is quite attractive. The problem with the public sec-tor pay bill is that too much is spent on the wrongkinds of activities, people and skills. Too much isspent on the top of the civil service, the highergrades, who got their positions through seniority.Too little is spent on younger talented people and re-wards for managers who deliver.

The choiceThe 1997 election did mark a turning point. For 20years prior to that the state and public services hadbeen run down. The goal had been to strip them backor sell them off. Now there is a greater recognitionof the value of public services, especially in aneconomy which is driven by innovation, but whichas a result is more fluid, open and unequal. Thus farthe government has managed, just, to shore up pub-lic services and produce some improvements in per-


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formance. But getting more out of the existing sys-tems will become harder and harder without radicalinnovations from within to create new working cul-tures, services, organisations, brands and spaces.You have a choice. If you choose to continue onlywith incremental innovation, you risk becomingIBM in the 1980s: a once mighty giant that falls intodeep crisis. The only way to avoid that is to embarkon a deliberate, disruptive and in some ways de-structive process of radical innovation from within– which will mean backing mavericks, challengingconvention, taking on vested interests and slaugh-tering sacred cows. If you want public service to sur-vive and prosper you should take the latter course.


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Documents

Innovate from Within - Demos · Innovate from Within An Open Letter to the new Cabinet Secretary Charles Leadbeater