The Week 7 February 2025
Senior Researcher
A week is a long time in politics. Last Wednesday, we had the Chancellor’s growth speech, in which Rachel Reeves promised systematic, supply-side reform and argued that low growth is not Britain’s “destiny”. Yesterday, the Bank of England downgraded its growth projection for this year from 1.5% to 0.75% and stated that it expects inflation to reach 3.7% in Autumn, nearly twice its 2% target.
Against this backdrop, the Government have been doubling down on reforming public services. Gareth Davies, Auditor-General of the NAO, called for the State to innovate and adopt a “culture of fast learning and evaluation”, echoing the “test and learn” language used by the Chancellor of the Duchy of Lancaster in December.
Also this week, the Government announced that performance reviews of senior civil servants will be linked to their ability to find efficiency savings. Departments had already been asked to find 5% efficiencies ahead of the next Spending Review — and the Chancellor has promised that the Treasury will take a “bottom up, zero-based” approach to that budget.
Creating incentives for senior officials to identify efficiencies, and baking in processes to target efficiencies at fiscal events, are understandable approaches to what is an incredibly tight fiscal context. But it is the fresh thinking, innovation, and ability to radically change how the State delivers services, where the real prize lies.
As Gareth Davies says, we need a much more “clearly articulated risk appetite”, which gives officials permission to test a “portfolio” of potential ideas that might not “bear fruit”. In some other sectors, a success rate of around 10 to 20% for projects would be considered “success”. In the public sector, we need to carve out many more areas where an improvement on the status quo, rather than 100% success of every project, is the aim.
Re:State has previously argued, for example, that government legal advisers should “give equal parity to the risks of not using AI … as they do to the risks of using AI”. In many areas, the risks of failure by current staff making mistakes are similar, or even higher, than the risks of failure from automated processes.
The big question for the Department of Health and Social Care and NHS England, for example, is not whether there are administrative savings that can be made centrally or from the books of ICSs. It is why, according to a Health Committee report last week, senior health officials “lack a readiness … to take the radical steps needed” to achieve long-term, financial sustainability.
This is not a moment for salami-slicing budgets or administrative tweaks; it’s one, as the name of our flagship research programme suggests to “Reimagine the State”.
One area ripe for such reimagining, is the corporate centre of government, where budgets and priorities are set, and policies are developed and road tested. Last week, in partnership with Civil Service World, we launched our annual Alternative People Survey to aggregate the perspectives of civil servants and find out where the real problems lie.
If you’re a civil servant, please fill out the survey here, which takes less than ten minutes to complete.
Onto our read of the week
Our read this weeks is from the London Office of Technology and Innovation (LOTI) on what it takes to develop a model for “collaborative innovation” — i.e. to test and learn.
LOTI point to: the importance of data collaboration, to create “common visibility” of a challenge; creating the “capacity” to collaborate by setting up sandboxes in which new models, tools and technologies can be tested in a lower-risk environment; and innovating at the right scale (often, a regional one).
For the regional underpinning of a test and learn culture, also read Policy Director Dr Simon Kaye’s excellent new ‘Rebooting Regionalism’ essay on creating a genuinely strategic and empowered regional tier of government.