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The first independent report into operational innovation in central government has found that, although a deep rooted culture of risk aversion is being tackled and improvements in quality and efficiency of service are being made, government bodies could still secure greater benefits and efficiencies with more innovative and progressive approaches.

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The NAO report published today examines 125 innovative developments, nominated by 85 government bodies, to improve their administrative and organisational practices. A diverse range of innovations was submitted, with most involving improvements to performance management, new IT or web services or other technological changes. Some of the innovations have taken years to deliver and cost millions of pounds, although the average cost was under £1 million and the timeframe was 28 months, relatively slow by private sector standards.

Examples of effective innovations in the report include:

Compared with private sector service firms, the cost data available within central government is limited and slow progress is being made in developing comparative costs and performance information. For innovations to be successful, better data is needed on where costs are being incurred and on the benefits derived from innovations.

In recent years, departments and agencies have successfully addressed a previous culture of ‘risk passivity’. But a lower-scale risk averseness is still common. The recruitment of people from outside the Civil Service is spreading knowledge and awareness of alternative methods of working but new incentives to encourage staff to develop or promote innovations are needed. Departments and agencies also need to strengthen their ability to learn lessons from successful innovations made by others in the public and private sector through, for example, greater use of innovation units.

The innovations that are being introduced are delivering benefits, in particular, improvements in productivity and effectiveness, although less in terms of cutting costs or improving staff working conditions. Levels of improvement are restrained by the small scale and generally conservative nature of the design and implementation, and an often hierarchical approach of imposing initiatives on staff without enough effort to securing their buy-in.

To develop a culture in which innovative projects can flourish, central government bodies should develop better incentives and rewards for staff to innovate; ensure that innovation is directly and publicly incorporated into the assessments of departmental performance; and improve cost and impact data so that it is easier to assess the value of innovations.

"Much work has been done to drive forward operational innovations within the civil service. But harnessing a new culture isn’t easy. We have found many examples of new and worthwhile changes but strong barriers to innovation remain.

Senior managers are providing leadership to change, but implementing structural changes will not be achieved by dropping initiatives from on high, but rather by creating a supportive environment where all staff are encouraged to make suggestions for change."

Sir John Bourn, head of the NAO

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