Headlines: July 25th, 2006

Government departments could still reap greater benefits from operational changes if they adopted more innovative and progressive approaches, according to the first independent report into operational innovation in central government. It found that although a deep-rooted culture of risk aversion was being tackled and improvements in quality and efficiency of service were being made, greater efficiencies could be secured.The National Audit Office report published today looks at 125 innovative developments, which were put forward by 85 government bodies, to improve their administrative and organisational practices. The study looks at a range of innovations with most involving improvements to performance management, new IT or web services or other technological changes. The average cost of the schemes was under a million pounds although some of the innovations have taken years to deliver and cost millions.

The report, produced for the NAO by the London School of Economics, gives examples of effective innovations including new systems for handling all customer correspondence to the Department of Health, the Environment Agency’s electronic reverse auction process for procuring high value but low risk commodities, and the Office of Government Commerce’s Gateway Review process assessing the viability of major projects. This initiative has so far saved an estimated 730 million pounds.

There is praise, too, for the DVLA change programme to allow drivers to renew their licences electronically and to provide improved enquiry facilities and the reorganisation of the Insolvency Service’s handling of straightforward cases.

The report says that in comparison to private sector service firms, the cost data available within central government is limited and progress towards developing comparative costs and performance information is slow. Better data is needed, it says for innovations to be successful.

According to the report, departments and agencies have addressed the previous culture of ‘risk passivity’ but it still finds that a lower-scale risk averseness is common. Recruitment of people from outside the Civil Service is spreading awareness of other ways of working but incentives are needed to encourage staff to develop or promote innovations. There also needs to be a strengthening of the ability to learn lessons from successful innovations made by others in the public and private sectors.

Innovations, it says, are delivering benefits, particularly improvements in productivity and effectiveness, although less in terms of cutting costs or improving staff working conditions. Levels of improvement are restrained by the small scale and generally conservative nature of their design and implementation and the fact that initiatives are often imposed on staff without enough effort to secure their buy-in to the changes.

Sir John Bourn, the head of the NAO, said, “Much work has been done to drive forward operational innovations within the Civil Service but harnessing a new culture isn’t easy. We have found many examples of new and worthwhile changes but strong barriers to innovation remain.”