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Government faces increasing pressure to do more with fewer financial resources and, with challenges such as climate change and an ageing population, will require innovation in public services. Since 2006, when the National Audit Office last reported to Parliament on innovation in central government, departments have started to implement some of the report’s recommendations and improve innovation. However, departments are still not maximising the opportunities to innovate and there are often barriers preventing public servants from developing innovations through to implementation.

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The majority of cases of innovation seen by the NAO originated with senior management within departments. There is a potential to encourage more innovation from front line staff and service users. At the front line, public servants can be reluctant to put forward ideas where they do not appreciate how innovation relates to the goals of the organization and can resist change they feel is forced upon them. Other barriers to innovation from public servants include risk averse attitudes within departments and a concentration on targets, budgets and high-profile national initiatives.

Although clear guidance and signals from leaders and senior management within departments would help remove some of these barriers, it is important that departments develop strategies for encouraging and developing innovation. Few departments have appropriate strategies in place.

It is not possible to identify exactly how much central government spends on developing innovation, as most occurs as part of large business transformation programmes or initiatives to improve the efficiency and effectiveness of service delivery. However, estimates by the NAO suggest that departments have allocated at least £3 billion in the form of innovation budgets, and the Department for Innovation, Universities and Skills announced a further £2.5 billion to be spent encouraging and supporting innovation from 2008-9 to 2010-11.

There are no measures in place to assess the impact of this expenditure. Measuring innovation in the public sector is complex, but projects supported by departmental innovation budgets should have measures in place to ensure their benefits are being realised. Government should make use of the survey work done by the NAO for this report and develop it further to determine how effective this expenditure is.

"Despite the large sums of money being invested in encouraging innovation, central government isn’t making the most of the opportunities to improve the delivery of public services. Innovation within service delivery is vital and government must be sure that it encourages staff to contribute, listens to the people who use its services and measures what it is getting for the investment made."

Tim Burr, head of the National Audit Office


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