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Faced with the funding challenges posed by the Comprehensive Spending Review, councils must act quickly. But the instinctive reaction – to ‘whip the horses harder', and squeeze out efficiency gains – isn't necessarily the right one. Experience shows that this is not the best way to achieve lasting productivity gains – especially at a time when public services face challenges of the scale set out in the Wanless, Turner and Lyons reviews. Instead, there will be no choice but to innovate. Doing what we have always done will not work. The pressures for innovation will also come from the public. Recent LGA research, for example, revealed the disparity between the service people expect from their council in old age and the reality of the services they receive. The problem is that it is so hard in practice to radically transform services. Some of the best examples of innovation have resulted from organisations facing a ‘do or die' situation. Marks & Spencer, BT, IBM and Apple are all private-sector organisations which have used such challenges to turn their fortunes around – by taking a step back and focusing on what customers need. In local government, too, Young Foundation research due to be published next year, will show how big a role crisis has played in driving innovation. But it would be far preferable if innovation could be more a part of the everyday life of local government. The good news is that so much innovation does happen already, whether in ‘front office shared services' – in which services are integrated at the point of delivery, making them easier for the public to understand, access and use – or in areas such as choice-based lettings and direct payments for social care. However, the distinction between the private and public sectors is in the speed with which such ideas spread. In a competitive market, survival and growth are the primary drivers, so we tend not to hear phrases such as ‘spreading best practice' or ‘sharing what works'. When one company innovates, the rest must respond to survive. Contrast that with the difficulty of scaling-up innovation in public services, such as the reduction in delayed discharges from hospitals in Kent, or the neighbourhood empowerment work in South Tyneside. How can we create an ethos of innovation, something more akin to the culture we see in the private sector? We need to provide tools and structures to help local government collaborate in designing better services, and we also need to encourage the rapid uptake of ideas seen in competitive markets. It is neither practical nor efficient for each area to design bespoke services. Instead, local government must get better at analysing, and test what works, combining skills and experience to develop new ways of working. This requires direct contact between practitioners, not the central collection and dissemination of expertise. Methods championed by the IDeA and Young Foundation encourage and support a focus on results for the public, the use of peer-to-peer networking, and communities of practice in service design, and provide a strong basis for the promotion and diffusion of innovation. Peers and networks lie at the heart of some of the most innovative work in which local government is involved, including the wellbeing project and research with Demos into person-centred approaches to social care and their applicability to other areas of public service. Another example is the Mark Friedman ‘outcomes' approach to the provision of children's services, which shows how a new challenge – in the guise of the Every child matters agenda – can help encourage a transformation in approach. These are pointing the way to more systematic methods for identifying and incubating good ideas, and then helping them grow. They suggest the role of the centre should be to support, broker and network, putting the spotlight on those examples of innovation, allowing other local organisations to learn from their success. Without a significant drive to improve the ways in which innovation is organised, the likely pressures on public spending risk giving us a long period of salami slice cuts, in which greater stress and pressure combines with declining quality for the public and frustration for the people on the frontline who really want to make a difference to the lives of the people they serve. Lucy de Groot is executive director of the IDeA, and Geoff Mulgan is director of the Young Foundation

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WHITEHALL

Innovate to survive

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