Better versions of existing services will not do the trick. We need more radical innovation, says Charles Leadbeater

The chief executive of a leading city local authority put his challenge in stark terms. He had to cut his budget by many tens of millions of pounds. His staff had been through everything with a fine toothcomb.

By creating a shared back office, co-locating services and automating as much as the authority could, it would generate efficiency savings worth at most one-third of its target. To make up the remainder, it would either need to cut services or find radically-different ways of working.

That challenge has now fallen on most local authorities with a vengeance, as reductions in public spending bite. But this is probably just the start.

There is little prospect of high economic growth fuelling a return to increased public spending to fund major investment in services. The era of more-for-more is over.

The public will continue to demand personalised, accessible services which respond when and as they want. Intractable social problems may only get worse, as unemployment remains stubbornly high, and growth unevenly divided. Meanwhile, the public sector will face new demands, from an ageing population and climate change, which will require new approaches.

It will not be enough to attempt to respond to these multiple challenges with an improvement agenda, which has been the mainstream and dominant approach over the last two decades. Better versions of the services we have will not do the trick. We need services which comply with regulations, hit performance yardsticks and deliver the goods. But those alone do not create capable, resilient, adaptive communities able to create a good quality of life. All too often in public services, it is possible to hit the target but miss the point.

That is why we need a much more concerted, systematic search for measurable innovations which can benefit lots of authorities and communities. And there are three main avenues for this exploration.

The first is to reinvent the services we have. A good example of this is the way Tower Hamlets reconfigured its library services, closing old and outmoded libraries and reinvesting in the hugely-popular Idea Stores, built around a mixture of books, computers and social activities.

Hampshire did something similar with its Discovery Centres. These are still recognisably libraries, but a very different kind of library, with a wider mix of technologies and activities.

Services which are costly and involve many different agencies are prime candidates for this kind of reinvention. A good example of this is services provided to families at risk, where multiple overlapping and often ill co-ordinated public services play a role too frequently to little effect.

They process the problem rather than attempt to solve it.

The LIFE programme in Swindon, developed with the innovation agency, Participle, is showing that a lower-cost yet more intensive, team-based approach can be much more effective in helping these families to change. The public sector can no longer afford wasteful duplication.

Often, this kind of reinvention involves new buildings and technologies, which may be hard to come by over the next few years. So, for that reason, many authorities are looking outside to their communities for additional resources.

This is the second strategy, to provide better services by engaging the community as partners in provision, complementing and supplementing a public service. Bedfordshire has done this with some of its libraries. Suffolk is engaged in perhaps the most ambitious attempt to persuade community groups to take over services.

The Danish city of Fredericia has dramatically cut the number of people accessing its adult care services by investing heavily in promoting mutual self-help. Surveys show people are happier, the services are more effective and the budget is lower.

An outstanding example of what can be achieved when these two strategies – reinventing services and developing community capacity – align comes from palliative care in health. Most people say they want to die at home and yet most – about 85% – will likely die in hospital or a care home. Often, the last year of life for people is punctuated with visits to hospital.

When Birmingham North and East PCT looked at this mismatch, it decided to commission a relatively-simple new service which was designed to support people at home by providing them with access to medical support in situ, when it was needed.

The service is much cheaper than the alternatives – long stays in hospital or care home – and gives people and their relatives a better quality of life. It’s not rocket science. This is transformational innovation – finding entirely new ways to meet a need because it has been redefined and redesigned from the user’s point of view. Perhaps the best example of this kind of transformational innovation comes from fire and rescue services. The dramatic decline in the number of people dying in domestic fires is not primarily due to better fire engines, but more to the way fire services have worked to get more smoke alarms into people’s homes, and particularly into those homes where fires are more likely. The fire engine and the smoke alarm are different, but complementary tools to achieve the same end – fewer people dying in fires.

The trouble with the public sector is that we have so many ‘fire engine’-type services – heavy duty, good in a crisis, manned by professionals, located in a special building – that we have neither the time, money nor imaginative space to think about smoke alarm solutions.

Yet in more areas, these are the kinds of solutions we will need – distributed, low cost, promoted by professionals, implemented with lots of mutual self-help, and adaptive to their context.

For 20 years, public services have been drilled to improve. That pressure will not go away. But to meet the demands it faces, and to maintain its legitimacy, the public sector is going to need more than improvement. It will need to rethink, reinvent and re-imagine how public services help people and communities create public good and higher quality of life.

That means working with people and helping them to do things by themselves, as much as doing things for and to people.

Charles Leadbeater is a NESTA fellow and adviser to the Public Service Innovation Lab. NESTA, working with the Local Government Group, is launching a new programme to support councils develop and implement radical innovation. To find out more and to apply for the programme, visit www.nesta.org.uk