The UK’s top auditor has encouraged Whitehall departments to foster a culture of greater innovation, including fast learning and more recognition that some initiatives will not work out as planned
To ensure resilient and effective citizen services, government must promote innovation through risk-taking and use of emerging technologies, National Audit Office boss Gareth Davies has said.
Davies argued that innovation is the key to realising “immense opportunities” for productivity and resilience gains in public services.
Making his annual speech in parliament this week, the comptroller and auditor general set out four fundamentals for effective innovation that, if implemented, will help improve productivity and strengthen the UK’s resilience to short and long-term threats.
These are: setting a clear risk appetite for investment in innovation and recognising that not every individual project will bear fruit; a culture of fast learning and evaluation; effective accountability and scrutiny that encourages well-managed risk taking; and the harnessing of new technology, including AI.
Pat McFadden, the chancellor of the Duchy of Lancaster, struck a similar tone in December, announcing the government’s intention to make the state work “more like a start-up” by getting more civil servants to adopt a “test-and-learn culture”.
Davies argued that successful innovators “learn quickly what works and what doesn’t, so that failed experiments can be stopped promptly and the resources redirected to more promising ideas”.
“Being open about this can be challenging for government, with its ingrained worry that any failed project represents poor value for money,” he said. Davies added that the government’s finance function has a “vital role” to play, therefore, by ensuring that robust financial information is used to inform decisions on stopping, continuing or scaling up innovations.
Davies said that AI is “rightly at the top of the agenda” to improve productivity, “with clear potential for reducing the time taken for routine tasks, augmenting the work of skilled experts and making public services easier to use”.
“The question is not whether AI will make a difference to productivity but how to maximise the benefits whilst managing the risks,” he added.
He argued that system reform is also key to improving productivity. This will mean “tackling the causes of avoidable demand and allocating resources in a redesigned system where they can have maximum impact on productivity”, he will say.
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#The NAO chief will also champion the importance of “investing in people, their skills and how they are organised, and delivering higher productivity through a culture of improvement”; and “maintaining assets to support productive service delivery”. Several recent NAO reports have raised concerns about staffing shortages, including in the cyber and property professions.
On resilience, Davies added that there is a need for the UK to be better prepared nationally and locally for acute and chronic risks.
“We have much evidence that money is wasted and services to citizens compromised when we’re unprepared for increasingly likely events, whether that’s pandemics, extreme weather or cyberattacks,” he said.
“All this evidence points to the same thing: we need to be better prepared nationally and locally; to have sound risk management in place; and to be ready to adapt to new information and events quickly and effectively.”
Davies added that efforts to build resilience “are not in conflict with work to improve productivity”.
“Adequate investment in infrastructure, better contingency planning, and agile and responsive services will serve both objectives,” he said. “A measure to improve short-term productivity that reduces resilience, like cutting back on essential maintenance, is unlikely to deliver long-term value for money.”
Playing its part
Davies pledged that the NAO will play its part in encouraging a pro-innovation culture.
He said that the NAO’s refreshed strategy, for 2025-2030, will take risk appetite for innovative projects “fully into account” and that the watchdog will “continue to look for and highlight positive examples of innovation, including where unsuccessful initiatives have been stopped in favour of more promising ones”.
“There are those who say that the combination of the NAO and parliamentary scrutiny can stifle innovation, because civil servants are concerned about being criticised for something that hasn’t worked,” he added.
“I take this point seriously, although my reflection after nearly six years of attending sessions of the Public Accounts Committee is that its challenge is far more likely to focus on why officials haven’t done more to improve long-standing performance issues.”
A government spokesperson said: “AI has immense potential to transform public services, and too much of our public sector is reliant on archaic digital infrastructure. Our six-point plan to transform public services with technology will drive responsible AI adoption, give public services the tools they need to coordinate themselves, and repair the foundations of their infrastructure to ensure they are resilient and secure – this includes GOV.UK Wallet and AI tools that streamline administrative processes, enhance decision-making and boost productivity across departments.”
