CSR presents an opportunity to be radical

As the dust settles on the historic cuts announced on October 20, the talk is of winners and losers – who escaped, who will suffer most and is the result ‘fair’? This conversation is, of course, critically important – hundreds of thousands of jobs are at risk and many services and benefits will disappear. But whilst we consider how to minimise the damage, we must dedicate much more energy and effort to the most important conversation of all: how are we going to use remaining funds to create a new breed of public services that are different, better and much lower cost in the long-term? This new conversation is not just an interesting thought experiment. The cuts announced meet immediate fiscal demands but they cannot improve how we address the major social challenges of our time – child poverty, high quality education fit for the 21^st century, climate change or obesity, to name but a few. The government’s current approach to cost-cutting – improving operational efficiency and rationing services to those who need them most – can, at best, continue to deliver existing, inadequate ways of tackling these challenges. At worst, it will take us backwards.  There is an alternative. Innovation Unit believes that improving outcomes and saving money work best when they work together. This conviction comes from a body of evidence of successful innovations from around the world that have delivered different, better, lower cost public services and from the increasing body of our own work in the UK. Our research into radical efficiency – innovation that enables different and better outcomes for users with savings of between 20-60% - highlights transformative projects from community policing in Chicago to Patient Hotels in Sweden that help users to get better, faster. Radically efficient innovators discuss an important, simple question with their users. How can we help improve the quality of people’s lives? This question allows them to rethink their fundamental goals, before they rearrange delivery and resources to realize them.

Innovation Unit’s work on radical efficiency with local authorities from Croydon to East Lothian is beginning to confirm the value of this approach in the UK’s cash-strapped local governments. We are working at a local level because radical efficiency demands deep empathy with and understanding of communities. This relies on local organizations that can get close to the people they serve. Moving from this compelling insight to a whole new model of public services will require a fundamental shift in power and creativity from central to local government. Central government needs to create the freedom, incentives and support for local authorities to ask fresh and different questions about what they are there to do for (and with!) citizens. To achieve this, Innovation Unit is advocating the creation of 15-20 radical efficiency ‘zones’ across the UK. These zones should do three key things to support local authorities to test and model the development of different, better, lower cost public services:

•  Radical freedom: central government should eliminate central performance management targets and inspections, replacing them with the duty to develop transparent, bottom up indicators of the outcomes the community want to see.

•  Radical funding: central government should allow local authorities, health and other agencies to pool all their funding streams. This would allow local government to allocate its budget, across services, to the work that will best help to generate the outcomes the community want to see.

• Radical support: central government should stop talking about cuts and start talking about the aspirations and priorities of UK citizens. They should be inspiring new ways of thinking and focusing on local need – not depressing a whole generation of public servants. They should also enable local authority professionals to access the tools and processes to support them to think differently.

Innovation Unit is far from alone in these recommendations. The highly lauded Westminster Council has proposed something very similar in its ‘Foundation Councils’ proposal whilst Rob Whiteman, Chief Executive of Local Government Improvement and Development (LGID) supports the move from ‘inspection to audit’. The Comprehensive Spending Review announcement should be a kick start to encourage thinking about how to reshape the welfare state and its relationship with citizens. It should be only the beginning. This may feel like the moment for retrenchment, not thinking big about what public services should really be about. But if we settle for minimizing damage to the system we have already got, we are only going to embed its inadequacies. This is the moment to make the most of the funding that is left. We need to start talking, and doing something about the most important challenge we face: how to create different, better, lower cost public services that can effectively and sustainably tackle the most difficult social issues we face.