Civil Service productivity?

• Gareth Davies, the government comptroller and auditor general, leads the NAO’s work as the UK’s independent public spending watchdog.
• He says public service leaders should articulate risk appetite, harness the potential of new technologies and develop a culture of fast learning and adaptation if they are to boost innovation in government:
• “Such action is crucial to build civil service productivity and the UK’s resilience to shocks which are the most important value-for-money challenges and opportunities in the coming years”.
• Davies noted that global instability, climate change, public health emergencies and cyber threats threaten widespread disruption and that “problems of rising demand and not enough money to quickly fix gaps in key public services” persist.
• As such, productivity and resilience “must be confronted if we are to get public spending on a more sustainable footing, delivering for people at a price we can afford”.

Four fundamentals

• Davies set out what he called the four fundamentals to effective innovation that would be key to driving this agenda:

1. 1. A clearly articulated risk appetite and a spread of investments, to maximise the chances of success:
      • Tackling big problems like climate change required “a portfolio approach to investing in research and development” that recognised that “not every new idea will bear fruit”.
      • Lessons should be learned from the Advance Research and Invention Agency (ARIA), set up in 2021 to “empower scientists and engineers with the resources and freedom to pursue breakthroughs at the edge of the possible”.
      • ARIA “explicitly acknowledges that many of its investments will fail to meet their targets, but the learning from them will inspire those that follow.”
   2. Harnessing technology:
      • “There’s a lot to be managed” if the productivity benefits of new technology are to be realised – including training, procurement, data quality and the review of business processes
      • Government would “have to continue to tackle its overhang of obsolete IT systems”.
      • A new approach to government’s management of technology suppliers would be needed to enable it to respond to changes in the market for digital services
      • Good AI governance would be crucial for ensuring the fair treatment of service users and maintaining public trust.
   3. A culture of fast learning and evaluation, through which failed experiments would be stopped and successes scaled up quickly:
      • “[A] feature of successful innovators is their ability to learn quickly what works and what doesn’t, so that failed experiments can be stopped promptly and the resources redirected to more promising ideas.”
      • Davies conceded that “being open about this can be challenging for government, with its ingrained worry that any failed project represents poor value for money.”
   4. An accountability and scrutiny framework that encourages “well-managed” risk taking:
      • Davies said there are people who argue that the NAO and parliamentary scrutiny can stifle innovation because civil servants are concerned about being criticised for something that hasn’t worked.
      • However, he said his reflection after six years of attending Public Accounts Committee sessions was that the “challenge is far more likely to focus on why officials haven’t done more to improve long-standing performance issues”.
      • The NAO has refreshed its 2025-2030 strategy and “takes fully into account the risk appetite set for the range of innovative projects”.
      • “We will continue to look for and highlight positive examples of innovation, including where unsuccessful initiatives have been stopped in favour of more promising ones.”
      • The office recognised “the importance of setting a clear tone that value for money requires well-managed risk taking”.

Save money or face the sack  

• In other UK workforce and management news, top civil servants have been told they could lose their jobs if they do not save taxpayers’ money, as part of changes to how the government manages performance.
• As part of the changes, senior leaders could be held personally responsible for saving money in their departments and either rewarded for strong performance or dismissed for weak performance.
• Cabinet office minister Pat McFadden said the public “must be confident we are spending every pound of their money well” and that it was “vital that senior leaders are not just encouraged, but held responsible for this.”
• He added: “We will introduce new checks to identify and tackle poor performance where we find it, and to recognise the good work of senior leaders across the civil service.”
• As part of a spending review, government departments have been told to find efficiency savings worth 5% of their budgets.