Public Service Innovation

Public Service Innovation
A Research Report for The Work Foundation’s Knowledge Economy

Programme
Rohit Lekhi, Research Republic LLP

Acknowledgements
The author would like to thank Ricardo Blaug, Peter Deaves, Naomi Head, Amy Kenyon,
Emma McKee, Rebecca Reilly-Cooper, Andrew Whitworth and Chunyao Yi for their help
in compiling this research report.
This research report was prepared by Research Republic LLP for The
Work Foundation’s Knowledge Economy Programme
June 2007
Contact
Research Republic LLP

30 Ellesmere Road
Manchester
M21 0SR
tel/fax: +44 (0)161 286 6964
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2 Public Service Innovation’

Contents
Introduction 4
1. Innovation and public services: Issues and themes 6

1.1 Why innovate?
1.2 Defining innovation
1.3 Success factors
1.4 Barriers
2. Public service innovation in the knowledge economy 22

2.1 The impact of social change and new technologies
2.2 Policy drivers
2.3 Experiences of innovation in central and local government
2.4 Recent examples
3. Case studies 53
3.1 Department for Innovation, Universities and Skills
3.2 Microsoft and the Black Country Consortium
3.3 BBC Vision
3.4 South East of England Development Agency
3.5 H.M. Land Registry
3.6 Competition Commission
3.7 London Connects
3.8 Liverpool Direct
3.9 Lancashire Constabulary
3.10 Croydon Primary Care Trust
3.11 Information Commissioner’s Office
3.12 University of Warwick
Conclusion 102
References 104
Public Service Innovation’’ 3

Introduction
The agenda for public service reform increasingly demands that services meet the
rising expectations of citizens. At the same time, rapid changes in information and
communication technologies provide new opportunities for gains in both efficiency and
effectiveness. However, public services are subject to very different pressures than
private companies, and so must innovate in very different ways.
This research report presents developments in public service innovation arising from
the growth of the knowledge economy. As such, it is a component part of The Work
Foundation’s Knowledge Economy Programme.
The report has the following three aims:
1. To examine current debates, issues and themes around innovation in public

services.
2. To review specific innovations in public services driven by the knowledge
economy.
3. To conduct primary research on selected case studies of knowledge economy-
related innovations in public services.
These aims reflect three distinct levels of research, ranging from the examination of
general issues around innovation and public services, through a more focused analysis
of public service innovation in the knowledge economy and to a series of detailed and
particular case studies. The report is thus structured in order to progressively focus on the
drivers, barriers, experiences and outcomes of knowledge economy-related innovations
in public service.
Section 1 examines the issues and themes surrounding innovation in public services. It
presents a review of relevant literature, defines its key concepts and explores its debates.
Attention is here drawn to attempts to clarify the various types and drivers of innovation,
and to analyse the conditions which favour, or hinder, its success.
Section 2 then focuses more directly on innovations associated with the knowledge
economy. Here, the report identifies challenges arising from the technological, social and
economic changes that constitute the knowledge economy and explores the various ways
in which policymakers have sought to shape the responses of public services to those

Introduction
challenges. This section thus orients to the practices of innovation, examining recent
experiences of innovation in central and local government respectively and reviewing a
number of existing examples of knowledge economy-related innovation across the public
services.
Section 3 presents a series of in-depth empirical case studies of innovative practice.

These offer greater detail on the actual processes of innovation in the knowledge
economy, and thus enable a deeper analysis of its conditions, drivers and prospects.
With the study of public service innovation now emerging as an activity to be

distinguished from private sector innovation, important new research has sought to clarify
its particular drivers, barriers, experiences and outcomes. The aim of this report is to
both collate and extend the existing research and to generate further insights about the
distinctive qualities and drivers of innovation in the public sector.

1. Innovation and public services: Issues and themes
This section examines the issues and themes surrounding innovation in public services. It
presents a review of relevant literature, defines its key concepts and explores its debates.
As we shall see, current research has sought to clarify the various types and drivers of
innovation, and to analyse the conditions which favour, or hinder, its success.
1.1. The general case for innovation

Why innovate? Much of the literature on innovation treats its importance as a given. Schumpeter has
called it a ‘fundamental impulse that sets and keeps the capitalist engine in motion’
(Quoted in Rogers 2003). Innovation is considered, quite simply, an imperative for
organisational survival.
Amongst other things, innovation is considered essential to:

• reducing costs and increasing productivity, thereby improving profits and
strengthening the organisation
• maintaining competitiveness in a globalised economy
• the organisation’s ability to adapt to changing environments (which may be
legislative, technological, social, economic, and physical)
• breathing new life into slowing or stagnant markets or other operational areas;
alternatively, facilitating entry into new markets
• inculcating an organisational culture of creativity: particularly visible in research-
oriented organisations or those working in dynamic markets like ICT, but also
relevant to any organisation which seeks to attract high quality creative staff and
managers at any level.
(Damanpour & Gopalakrishnan 1998; Hargadon and Sutton 2000; d’Aveni 1994;
Schumpeter 1934)
These observations refer primarily to economic contexts and concerns. However, more
political motivations for innovation within organisations cannot be neglected, though
these would be less acknowledged in much of the economic and management literature
(see Morgan 1999). Innovations – their introduction, or their prevention – can be used
as a way of securing control over a workforce, whether by limiting possibilities for action,
reducing the need for human capital (eg automation) or centralising power in a particular
department or person. A political view of innovation can be useful in appreciating
resistance or conflict over innovation and change (see section 1.4 of this review and also
Mintzberg 1989, Berg and Östergren 1979). Moreover, political considerations can be as
likely to arise in the public as the private sector.

Innovation and public services: Issues and themes
Why innovate in the public sector?

Political motivations for innovation are, at least potentially, common to all organisations
(Mintzberg 1989 ), but by their nature are less amenable to rational planning and
analysis. When considering the more economic, strategic motivations, these are on the
surface less applicable in the public sector than the private. Public services do not tend
to exist within competitive markets. Compared to businesses, they usually exist within a
more complex social system, with goals and values that are more ambiguous and difficult
to quantify (Lewis and Hartley 2001, Denis et al 2002, March and Olsen 1989). Other
limiting factors exist – such as a need or desire to avoid ‘rocking the boat’ for vulnerable
users of a service (see also section 1.4 below). All in all, in the public sector, the
incentives to innovate are lower, and risks often higher, than in the private sector. Public
service innovation may therefore come to be considered, at least in some cases, as an
‘optional extra or an added burden’ (Mulgan & Albury 2003: 5).
Nevertheless there are important arguments and drivers in favour of innovation in the
public sector. Innovation can be exploited to enhance the reputation and image of local
and national government, in three main ways. First, at present and particularly in the
USA (Moore 2005) and UK, public institutions regularly come under attack for the quality
of their service and levels of efficiency. They may be unfavourably compared to private
sector companies working in similar fields. Second, governments are keen to project a
public image which will heighten international appeal and attract private investment. An
example of this process can be found in the area of academic research. This motivation
is also strongly apparent in the adoption of ICTs and/or ‘e-government’ strategies by
government and other public organisations (McLoughlin et al 2004). Third, governments
must appeal for votes, and/or have an interest in fulfilling manifesto commitments or
minimally, stamping their identity on the public sector as a result of election or perceived
shifts in public opinion.
Innovation is also crucial for effective public service management in a dynamic society
(Mulgan and Albury 2003, Walker 2004, Hartley 2005), characterised by ‘hyperchange’ –
defined (by Barrett 1998: 288) as ‘a combination of linear, exponential, discontinuous and
chaotic change’. As a corollary, there is a demand (from the public and from the state)
for more ‘joined up’ or ‘holistic’ government. This results in a range of different public
service organisations, many of whom are engaged in socially critical tasks (Donahue
2005), under pressure to improve their capacity to share information, develop common

data standards, and change practices where these relate to their relationship with other
organisations (cf. Walker 2004).
Moreover, Albury (2005) has argued that it is only through a process of innovation
that public services can shift out of a 20th century ‘mass provision’ mode to a more
personalised mode (see also Mulgan and Albury 2003). Society is becoming increasingly
diverse, and individuals more demanding of their public services. New information and
communications technologies, new working practices, new forms of social and family
organisation, and the above mentioned ‘hyperchange’ have all led to a fragmentation
of previously homogeneous social groups, such as, for example, those based on class
stratification. One consequence of this increasing demand is the general expectation that
services be accessible at all times (the ‘24/7 society’). The old ‘nine-to-five’ availability
of much service provision may no longer be acceptable to a client family where both
parents work, and are increasingly able, for example, to order groceries online and
request the delivery time. Better quality is also expected, whether as a result of public
pressure, the dictates of national audit processes or those of supranational bodies like
the EU (Karmack 2004). Ultimately the aim is increasingly, to fit services to the citizen,
rather than vice versa. Almost by definition, without innovations in the areas of staffing,
organisation and delivery, service agencies will not be able to adapt to these changed
demands.
Public service organisations are often under as much pressure to cut costs, reduce waste
and improve efficiency as private sector ones. Indeed, there is a historic tendency for
costs in the public sector to rise faster than those in the rest of the economy (Mulgan and
Albury 2003). This stems primarily from the general lack of competition. Here, innovation
is seen to be a mechanism which will stimulate a more commercial orientation within
public services. In particular, government increasingly focuses on the skills required
amongst public servants in order to build the capacity and ability to administer and
deliver those core state functions which are less amenable to being provided by purely
private actors (eg defence, welfare) (Kamarck 2003). Changes in this area often, though
not always, involve the integration of ICTs into the administration or delivery of public
services.
Despite these many drivers, innovation generally remains a fragile and unpredictable
process, with a high rate of failure, particularly in the public sector (Tidd et al 2001,

Hartley 2005). In some ways this is inevitable; if all innovations could be predicted in
advance the term would lose all meaning. But the lack of clarity in studies of innovation
is also a consequence of a lack of agreement on what actually defines and constitutes
innovation (cf. Greenhalgh et al 2004 and section 1.2 below). In order to better
understand the benefits and processes of innovation, therefore, it is useful to establish
a clear definition, and to identify the different types of innovation that exist at the present
moment. That is the topic of the next section.
1.2 Complexities of definition

Defining The term ‘innovation’, like the terms ‘movement’ and ‘change’, describes both a process
innovation and – when expressed in the singular – a component, result or product of this process (an
innovation, a change). Dozens of definitions of ‘innovation’ exist: Osborne (1998) found
twenty, for instance. There are ‘positive resonances’ (Albury 2005, p. 51) to the term and
thus a tendency to use it to label what are in actuality quite diverse developments. This
section will attempt to summarise the various attempts that have been made to bring
greater clarity to these definitions.
This is not a straightforward issue. Innovation is non linear (Mulgan and Albury 2003);
it rarely has a definable starting point, a clear sequence of steps, and an obvious
culmination (the product). It may take place in waves of iteration. Provocations,
as described above, are varied and may come from anywhere in the organisation.
Serendipity and luck will play a part. Perception is important also, as innovation is at least
in part a socially constructed phenomenon (Greenhalgh et al 2004, p. 40). Innovations
may be adopted because they are fashionable or faddish (Rogers 2003, Abrahamson
& Goodchild 1999, Rogers 2003), not because there is any proven (or even anecdotal)
benefit arising from their introduction. On the other hand, genuine innovations may also
be disguised in order to lessen their impact or reduce the possibility of rejection.
In addition to the above, there may be ‘isomorphism’ (from the Greek for ‘equal form’).
Here, the term is adopted from biology, in which it describes organisms being shaped by
their environmental niche, with the result that they come to look more or less the same.
DiMaggio and Powell (1983) describe similar processes in organisations. For example,
if a leading firm introduces a particular innovation which dramatically cuts its costs, there
is strong pressure on its competitors to do the same. The rapid spread of ‘e-ticketing’
throughout the airline industry was an instance of this. Should the term ‘innovation’ apply

only to the first company’s actions, however: or to the later adopters too? (cf. Thompson
1965).
In conclusion, to achieve some analytical clarity from this empirical fog is not easy.
Nevertheless a more objective definition would be useful. Processes or products should
not be considered innovations simply because a vested interest defines or perceives
them as such. Nor should innovation ‘simply be another word for change’ (Lynn 1997,
p. 96). But definitions could also be too restrictive: an accusation which can perhaps
be levelled at Lynn’s own attempts to restrict ‘innovation’ to describing only ‘original,
disruptive and fundamental transformation of an organisation’s core tasks’, on a
permanent basis (ibid). The following sections consider attempts which have been made
to classify and categorise innovation more clearly, to try to avoid either of these traps.
Types of innovation
Broadly, the range of possible innovations tend to be divided into product innovations;
service innovations; and organisational (procedural, or process) innovations (cf. Alänge et
al 1998; Damanpour and Gopalakrishnan 2001).
Product innovations do exist in the public sector (Christensen et al 2000), but are less
common than elsewhere. More frequently seen are service innovations: the provision
of an existing service in a new way, or the creation of a new ‘script’ for the activity (see
Nooteboom 2000). (Offering an entirely new service is classed more as a product
innovation, though all these categories overlap; see table 1 below.) Organisational
innovations – new processes, systems and procedures – are also common. These
distinctions matter because there are problems which can emerge when applying
concepts from the study of product innovation to service and organisational innovations.
Alänge et al (1998) observe that these latter types have less well-defined systems
associated with them. Thus, they are more difficult to trial, more slowly adopted
(Damanpour and Gopalakrishnan 2001), and tend to be evaluated according to criteria
that may be subjective or open to political manipulation. As such, they require higher
levels of tacit knowledge and/or skill sets stored in ‘communities of practice’ (cf. Wenger
1998 and section 1.3 below).
Walker (2004) adds a category of ancillary innovations, by which is meant changes in the
boundary relationships of an organisation. The innovation leads the organisation to work

with new partners, and/or outside its previously-existing activities. This type is difficult
to implement successfully as it requires cooperation and collaboration, and there is
dependence on an external organisation(s). Again, however, the process may be equally
or more important than the innovation itself, the product. This category is a useful addition
to the list.
Hartley (2005) expands still further on these categories, particularly that of organisational
innovation, and presents the following classification (the examples are also Hartley’s).
Table 1: Types of innovation
Type Description Public sector example

Product New products New instrumentation in hospitals
Service New ways in which services are Online tax self-assessment forms
provided, new ‘scripts’
Process New procedures, organisational Administrative reorganisations
structures, systems
Position New contexts, customers or partner Connexions service for young
[cf. ancillary innovation, above] people
Strategic New goals, purposes or values Community policing, foundation
hospitals
Governance New democratic institutions and forms Area forums, Devolved government
of participation
Rhetorical New language, concepts and Congestion charging, carbon taxes
definitions
Source: Hartley (2005)
Governance (see also Fung 2004; Skelchur and Mathur 2004) and rhetorical innovations
are, Hartley notes, almost always discussed in a public rather than private sector context.
Individual instances of innovation may exhibit all seven of these characteristics to a

varying extent. Cross-comparison across different innovations, using these categories,
may be possible (Hartley 2005). In effect, they represent seven ‘dimensions’ of
innovation. It is also worth noting that while an innovation may be intended by its
designers to result in a new product, it may also lead to (or require) other innovations
(in, say, position, strategies and rhetoric) in order to be successful. These latter types of

innovation may occur, and become embedded into organisations on a permanent basis,
regardless of whether the product innovation which provoked them was successful.
Although there is general agreement about the benefits of innovation, little work has been
done on what types of innovation have the biggest or most significant impact, and in what
contexts.
Scale, permanence and success

Success is often cited as a factor in defining innovation (eg Mulgan and Albury 2003).
This can be judged against quantitative criteria. For example, assessments of innovation,
whether within an organisation, an economy or a society, could include the number of
patents secured, or calculations of research and development budgets (see Walker et al
2002, and Brinkley 2006, for instance). A private sector company may measure increased
market share and/or reduced costs as the benchmark indicator. Indeed, these measures
become ends-in-themselves, and innovation is justified by bringing about improvements
in the indicator.
Yet, as discussed in the previous section, quantitative measures of success will only
capture part of the wider process of innovation. An innovation may fail, either completely
or in certain aspects, yet still be considered an innovation, as the process of having
produced it may turn out to be more significant – to those involved and to others
– than the product itself. In other words, learning about innovation can be advanced as
effectively through the study of failures as through that of success.
Success may also be judged by how well an innovation is disseminated. This can
happen through isomorphism (see 2.1) but also more proactively, through spreading best
practice, which is particularly important in the public sector (Rashman and Hartley 2002,
Greenhalgh et al 2004, Albury 2005). More spontaneous dissemination can also occur,
as for example, in ‘Paulian conversion’ (after the biblical conversion of Paul on the road
to Damascus), where an institutional leader sees an innovation in use elsewhere (a new
software system, for example), and returns convinced of its worth. Or, the dissemination
may happen internally, through the work of middle management or front-line staff in a
sub-section of the organisation. They may institute new ways of working as a result of
learning ‘on-the-job’ (Wenger 1998), and these spread through an organisation either
by osmosis – other parts of the organisation gradually adopt the innovation as they find
it meets their needs, without this being directed or planned – or by finding a sponsor

in senior management (Borins 2001; cf. Mulgan and Albury 2003). In a wide-ranging
comparative study of innovation across the public sectors of different countries, it
was estimated that around half of all public sector innovations emerged in this way; in
developed Commonwealth countries such as the UK and Australia it was as much as
80%. Indeed, recent developments in management and organisation theory suggest that
comparable levels of success are, or should be, evident in the private sector. (Senge
1999, Argyris 1999).
Finally, innovations scale up or down depending on the level of their impact. Mulgan and
Albury (2003) describe:
• incremental innovations (which shade close to ‘continuous improvement’, and are

thus a more vague definition of innovation)
• radical innovation: a new service, product, mode of delivery, etc
• systemic innovation: large-scale and fundamental institutional change.
Moore et al (1996, p. 276) suggest that an innovation, whether successful or not,

should at least ‘appreciably affect the operations or character of (an) organisation.’ Here
again, it should be noted that not all innovations are intended to bring about change to
these operations. Christensen and Lærgreid (2001) categorise innovations as either
sustaining, or disruptive. Sustaining innovations enhance an organisation’s ability to work
within established parameters. Disruptive innovations change the parameters, though
not necessarily in negative ways; new markets, for instance, may be opened by such
changes.
In summary, innovation is an elusive term. A universal or agreed definition of what makes

for innovation cannot be fixed precisely. Working definitions, however, can be adopted
depending on the position one occupies – as researcher or participant – vis-à-vis other
organisational factors, including the level of organisation, timescale, impact level and
relevant stakeholder group. As Morgan (1999) says about the study of organisations, no
one approach will suffice to show the entire field, but a variety of different perspectives,
with different bases in theory and practice, can combine to reveal the picture with a
greater degree of clarity and detail.

1.3 The sheer variety of perspectives ensures that there is likewise no simple universal
Success formula for successful innovation (Borins 2001). Innovation works at too many levels and
factors is too complex to be pinned down in that way. Slappendel (1996) notes the importance
of the interaction between the individual (eg techniques for creative thinking) and
the organisation in fostering successful innovation. External factors – eg the level of
competition within a sector, the regulatory landscape (Black et al 2005) or an increased
dependence on other organisations, such as manufacturers (McNeil and Minihan 1977)
are also significant.
The adoption of an instrumental view of innovation, as something of key importance

to the financial and strategic health of the organisation, tends to result in a view of
innovation as a ‘strategic choice’ (Child 1972). It suggests that a creative culture can be
inculcated in an organisation through strategic management decisions. For example,
Garvin (1993) bemoans the tendency to treat innovation as random or spontaneous.
He suggests that managers need a plausible, actionable and easy to apply definition,
alongside clear guidelines for management practice. Innovation should consist of more
than aspirations and should incorporate tools for assessing performance. Roffe (1999)
focuses on the need for training and staff development, and Valcke (2004) on change
management strategies.
Damanpour (1991), through a meta-analysis of 23 other studies, proposed that the

following structural characteristics of organisations, in general, helped to facilitate
innovation:
• greater decentralisation
• members with higher levels of involvement in professional activities, of the sort
which place them in contact with fellow professionals outside the organisation
(see also Hansen 2002; take note, however, that there can be diminishing returns
and ‘overload’ here as well; Granovetter 1973)
• higher amounts of administrative support
• greater internal communication
• greater organisational ‘slack’ (meaning an organisational capacity to move
financial and/or human capital around within the organisation itself, in order to
address issues where and when they emerge: see also March and Olsen 1979,
Dougherty and Hardy 1996)

• greater technical knowledge, professional knowledge, and resources

• favourable attitudes towards change expressed by senior management
• greater functional differentiation and a range of specialised areas within the
organisation.
Ling (2002) tries to identify strategies drawn from the private sector from which public
sector organisations might learn and benefit.
Table 2: Competencies and skills for innovation
Stage Competencies required Examples
Generating ideas R & D (science based), using the Innovation centres, modelling,
experiences of lead customers systems theories, simulations,
and suppliers, experimentation, partnerships and team working
identifying new markets
Managing innovation Personal skills, conducive Reflexive practice, shared visions,
culture, leadership, collaboration, team working, focus groups, trials
theoretical under standing of
complex change, testing
Diffusion Communication, targeting Knowledge management, project
resources, overcoming resistance, planning, persuasion, marketing,
identifying success, disseminating evaluation, assessment
evidence, managing risk
Ling, in conclusion (and in general agreement with Mulgan and Albury (2003), Borins
(2001)), notes that:
• innovation demands a variety of competencies at every stage of the process

• singular successes do not indicate that deeper, more fundamental learning
structures are in place
• innovation needs to be driven more by public needs than by policy and process
(though Ling observes that this is not usually the case)
• dissemination of innovation needs to be effectively managed.
Yet problems can arise if one believes that success in innovation is merely a matter
of ‘designing in’ the relevant characteristics. Zaltman et al (1973) make an important
distinction between programmed and non-programmed innovation. They also identify
‘distressed’ innovations, those which arise reactively, as a response to crisis or new

legislation. Programmed innovations are largely planned in, originating either from senior
management or from the work of formally established R & D facilities. However, as noted
above, Borins (2001) observed that many innovations are instigated neither through
these channels nor as a response to external crisis or political pressure, but by middle
management and front-line staff, as part of their everyday work. Users may also initiate
innovations, particularly if they also have active networks of communication which exist
mostly independently of service providers (von Hippel 2005).
With these types of innovation, management – and, at a higher societal and economic
level, government – are better cast as the enablers of non-programmed innovation,
providing an environment which is conducive to its growth and dissemination. Mulgan
and Albury (2003) present the following diagram, indicating the complex and non-linear
relationships and processes which they consider important here.
Figure 1: A framework for fostering innovation
Incubating
and
Proto-typing
Generating Replication
possibilities and
scaling up
Analysing
and
learning
Source: Mulgan and Albury (2003)
In the public sector, this enabling environment is also substantially comprised of a range
of non-governmental and quasi-autonomous organisations, which have more (though
not complete) freedom to work outside direct and formal structures of control. Such
organisations include businesses (public/private partnerships), universities, voluntary
organisations, and many others which could broadly be grouped under the heading ‘civil
society’ and which act as both conduit and source of innovation. For example, the growth

of neighbourhood warden schemes led to the creation of community support officers in

the police force (see Mulgan, 2007 for this, and other examples of the role of civil society
in innovation).
Nevertheless, political and bureaucratic ‘gatekeepers’ continue to play a major role in

supporting innovation. They control resources and assert authority over conflicts of
meaning or practice. To be supported and disseminated, innovations usually have to
attract the backing of such gatekeepers (whether these are individuals or bureaucratic
systems). Therefore, informal ‘enabling’ and higher-level strategic planning and policy
making may act as catalysts in successful innovation.
Borins’ substantial study is significant because it takes a slightly different view of how
innovation can be fostered. In the first place, this is because despite also drawing on
previous research such as the work of Osbourne and Plastrik (2000) and Light (1998),
Borins also asked participants for their advice and opinions. In addition, he focussed
more on the success factors which apply in specific projects, as well as the ‘building
blocks’ on which they are based.
These building blocks included:
• generally, a ‘systems approach’ to management, which:

oo understands innovation as one part of a wider context, appreciates
interconnections, and can conduct systematic analyses of how a problem
interacts with other problems, parts of the organisation, projects etc;
oo fosters co-ordination across these interconnections;
oo stresses integration rather than compartmentalisation
• the use of new ICTs in information and innovation management
• the involvement of the private and/or voluntary sectors as necessary
• empowered staff, users, citizens and other relevant communities (for the
successful implementation of an innovation depends on them; indeed many
innovations originate with them, and this is more likely to occur if they feel
empowered).
At a more project-specific level, Borins’ research identified the following critical success
factors for a successful innovation project:

• secure support from senior management; have a champion, if possible

• programme objectives have to conform to the organisation’s aims and objectives
• check what resources will be required, and that the project has secured access
to them
• seek clarity in mission statements and goals
• think strategically, and consider the project’s wider implications
• keep the implementation (decision making) team small
• make the project appear exciting to participants
• involve stakeholders as much as possible
• seek regular feedback from participants
• ensure positive coverage; publicise success, however small and particularly at
early stages
• tolerate a certain level of error (‘honourable failures’: Mulgan and Albury 2003),
allow staff freedom to innovate
• develop control mechanisms
• manage documentation well
• be dedicated and persistent
• learn from mistakes and do not be afraid to change plans if necessary
• implement quickly, to avoid losing focus and momentum.
Successful innovators also took objections seriously, and then engaged with them
(instead of either simply abandoning or changing the project parameters; or, at the other
end of the scale, adopting coercive or punitive measures against objectors). Persuasion,
accommodation and consensus-building were valued and considered more likely to lead
to successful innovation.
Finally Borins drew up the following list of recommendations:
• support an innovative culture from the topmost levels of management (cf. Baer
and Freese 2003, for how this can impact on the individual propensity to make
suggestions and pursue innovative ideas); at the same time, ensure the message
spreads that innovation can be everyone’s responsibility
• increase rewards for innovative individuals and teams, and allow scope for
experimentation
• ensure innovation is properly resourced

• ensure staff have diverse backgrounds (giving them a variety of perspectives on

single problems)
• learn lessons from elsewhere: research what other organisations do to provoke
innovation
• evaluate properly.
1.4 We have seen that it is possible to identify organisational characteristics which enable
Barriers innovation. It is equally important to consider those which hinder or delay it, and they are
reviewed in this section.
First, it must be noted that despite attempts to reach an objective definition of innovation
(see section 1.2), the question of how an innovation is perceived by different stakeholders
(cf. Greenhalgh et al 2004) may well remain the best indicator of its success or failure. It
is the stakeholders who will demonstrate whether an innovation has gathered support or
attracted opposition, and the relative strength of these ‘forces’ is a powerful determinant
in the final outcome (See Berg and Östergren 1977) for several examples drawn from the
education sector).
More generally, a culture of risk aversion has been identified in the public sector which
may mitigate against innovation (Mulgan and Albury 2003). Despite attempts having been
made to address this (eg National Audit Office 2006), the public sector cannot always
easily construct experimental ‘laboratories’ in which to try out a new service, system or
policy, and this, when combined with adhocism (see below), has led to some innovations,
conceived and implemented in haste, failing dramatically (the Poll Tax, for instance).
Many involved with public sector organisations (cf. Borins 2001) see them as stabilising
forces in society and/or are unwilling to take risks where the welfare of vulnerable service
users may be involved.
This attitude, however, often runs counter to governmental tendencies towards

‘adhocism’ (Mulgan and Albury 2003). Governments have a significant vested interest
in the performance of the public sector and are under strong popular pressure to deliver
improvements in services. This can stimulate innovations, but it can also lead to a
‘fragility’ in innovations, in which they are never fully backed by core staff who perceive
them as just the latest in a line, and no more likely to receive long term backing from

sponsors, than previous (now-discredited) initiatives. This tendency is, of late, particularly
evident in the compulsory education sector. Adhocism hinders the sort of long-term
investment and commitment which is needed to truly embed a culture of innovation into
many public sector organisations.
Public sector employees are already working under strong pressures to perform (the
performance management and audit exercises of public sector organisations are often
ornate and highly developed) and administrative burdens. Many are already operating
under very tight budgets and heavy workloads. Organisational slack (see section 1.3) is
lacking. There are few routes by which ‘bottom up’ innovators can secure resources to
invest in their innovation (Mulgan and Albury 2003).
As already noted, there is a lack of incentives for innovation within the public sector. As
Kamarck (2003: 2) says: ‘financial rewards from successful (public sector) innovation are
likely to accrue to the State, not to the individuals involved in the innovation’.
Most public sector organisations lack any kind of formal (or even informal) reward system
for innovators. Combined with the culture of risk aversion mentioned above, there is little
financial or career incentive to ‘think outside the box’ and/or autonomously take steps to
adjust the parameters of one’s work activity. Moreover, few employees in this sector are
employed with a direct mandate (in a job description, for example) to innovate (Mulgan
and Albury 2003).
Structures within the public sector tend to be monopolistic, and boundaries are tightly-
drawn. There is reduced motivation to innovate when no competitors exist and troubled
organisations are unlikely to be closed down (Ibid: it can happen, however; note, for
example, the recent decision to split the Home Office). There is also less motivation to
engage in ancillary innovation. Despite the rhetoric of more ‘joined up’ governments,
public sector budgets tend to remain ring-fenced (Ibid). As compared to private sector
agencies, public sector organisations also find it more difficult to define unambiguously
their goals and values. ‘Shareholder interest’ is far easier to identify, define (and quantify)
than the ‘public interest’ (Ling 2002).
Finally, ‘hyperchange’ can result in ‘overlapping’ innovations (Christensen 1997). A new

technology, way of working, or popular demand may come along before a previous

innovation in the same field has been properly embedded. An example of this is the
increasing use of interactive, ‘Web 2.0’ modes of online communication at a time when
many public sector organisations are only just developing the structures required to
place services online in a form suited to earlier, ‘Web 1.0’ sites. Whether the earlier
‘generation’ continues to be supported (in the face of competition from the new mode)
or not, problems can arise. It should also be noted that organisational characteristics
which encourage the initiation of innovation are simultaneously characteristics which
make embedding innovations more difficult – and vice versa (Hage and Aiken 1967).
An organisation with a strong track record at producing new innovative solutions may
regularly produce new ideas which challenge its own, more mature ways of working
that were, themselves, innovative in a previous time. This is not necessarily a fatal
contradiction, but it is nevertheless a hard paradox to resolve (see Utterback 1996,
Birkinshaw and Gibson 2005).

2. Public service innovation in the knowledge economy
While section one presented an overview of research in public service innovation, this
section focuses on innovations associated with the knowledge economy. Here, we identify
challenges arising from the technological, social and economic changes that constitute
the knowledge economy and how policy makers have sought to shape the responses of
public services to those challenges. In this section, we also orient ourselves more directly
to the practice of innovation, examining recent experiences of innovation in central and
local government respectively and reviewing a number of existing examples of knowledge
economy-related innovation across the public services.
2.1 Changes in the structure of British society and technological advances have brought
The impact about a shift in citizens’ attitudes towards government and public services. In industry,
of social the decline of the manual working class and the rapid expansion of the service sector
change have precipitated the transformation of the UK into a consumer society. Higher levels
and new of education, increased prosperity, the dismantling of traditional social hierarchies,
technologies and general household and lifestyle changes have transformed citizens into highly
sophisticated consumers with high expectations of the standard of goods and services
they receive.
Trends in the private sector towards consumer choice and personalisation of service have
influenced the attitudes of citizens towards services provided by the state, with citizens
increasingly demanding greater choice and flexibility in public services, and expecting
them to be personally tailored to be specifically appropriate to their individual needs and
lifestyles. For example, many medical interventions are now available privately but not on
the NHS, which creates choice for consumers but presents difficult questions for service
providers about what treatments should be made available to all patients. Evidence also
shows that citizens place a high value on the speed with which services are delivered, as
they increasingly feel that they are lacking in time, energy and money.
Public expectations of what the government should provide are rising in all developed
countries, with people looking to the state for solutions even where they do not consider it
responsible for the problem, as in the case of childhood obesity in the UK. While the need
for public services is not diminishing, rising real incomes have opened up the possibility
of private alternatives for many more people. The demand for high quality service is
such that 58 per cent of those in the highest income groups and 43 per cent of those

Public service innovation in the knowledge economy
in the lowest report that they would be prepared to pay towards their family’s health or
education if the private sector could provide a better quality service.
In terms of technology, rapid innovation has dramatically changed the ways in which
the citizen can enter into dialogue with the state. In 1997 less than 10 per cent if the UK
population used the internet; now 60 per cent do. This has opened up new avenues for
delivering public services and for interaction between citizens and the state. For example,
the introduction of the They Work For You website presents information to citizens on the
activities of their elected officials, and thereby increases transparency and accountability.
A wide variety of services are now accessible online; for example, the public can now
renew their car tax online.
Technological developments also present new challenges for the state that need to be
carefully managed, such as the dilemmas surrounding the use of DNA databases, which
would facilitate information sharing and could be effective in delivering personalised
health care, as well as helping to combat crime; however the public need to be confident
that the government is handling this data responsibly. These developments place great
pressure on public services to change their way of working and to improve the services
they provide. Technological transformation, along with wider social changes and the
increasingly high standards of service experienced by consumers in the private sector,
are driving a shift in citizen attitudes towards public services. Rising expectations
continue to heighten demands for more personalised and convenient public service
provision, for example in areas like paying taxes, voting, or applying for passports.
2.2 The challenges outlined above result in strong imperatives to innovate, both in the
Policy drivers provision of better services and to improve value for money. We see this in a range
of policy developments that have sought to encourage innovative practice in the
broad areas of shared services; procurement; efficiency; joined-up services; and,
transformational government.
Shared Services
Shared services are those provided to more than one client by a single provider
organisation. This may be implemented in a variety of ways, ranging from the sharing
of support services by several different functions within one organisation, through to a
single commercial organisation providing a service to a group of collaborating clients, as

‘lead contractor’ on behalf of a group of collaborating providers. The most common model
of shared services in operation comprises peer groups of councils engaging a single
commercial provider, and predominantly involve sharing single back-office functions
such as ICT services or revenues and benefits. However, major gains are likely to arise
from sharing complete back-office functions, and the more organisations that share, the
greater the potential economies of scale.
Government attention to the potential for shared services is particularly focused on five
main areas:
• Customer service centres, such as those for customer contact and payment
processes.
• Human resources, finance and other corporate services.
• Common infrastructure.
• Data sharing.
• Information management.
The current interest in shared services is motivated both by the desire to save money,
and by the drive to improve service delivery standards. It is also hoped that it will drive
transformation and business process redesign, increase capacity or capability, and free
up resources to concentrate on core service delivery. A shared services approach is
needed to release efficiencies across the system and support delivery more focused
on customer needs, and will enable public service organisations to reduce waste and
inefficiency by re-using assets and sharing investments.
Following the Gershon efficiency review, the UK government is working to an overall

plan for realising the benefits of shared services, and the Cabinet Office has established
a team whose task it is to accelerate the take up and development of the shared
services strategy across all government departments. The move within the UK to shared
services is not restricted to public sector organisations, but entails collaboration with the
private sector to gain the greatest possible input from a diverse group of stakeholders
and experts. The Transformational Government strategy and the introduction to the
Comprehensive Spending Review 2007 indicate that the government expects shared
services to play a major role in delivering its efficiency agenda. Across the public sector,
the potential savings from implementing a shared services approach are in the billions of
pounds.

Procurement
The procurement of innovative products and services has a role to play both in terms
of reducing costs, and in driving up the quality and effectiveness of public services. In
the Comprehensive Spending Review (CSR) 2004, the government set itself a target of
value for money savings from procurement of £3 billion by 2008, which it argued could be
delivered by giving businesses the opportunity to innovate. It is currently on track to meet
this target, and further cost cutting targets are expected in the 2007 CSR.
NESTA (2006) suggests that procurement objectives must include innovation, and
that innovation should be seen as an overarching principle behind public procurement
decisions. To achieve this, procurers must be given the space and knowledge to manage
risk intelligently, and should be encouraged to cooperate with innovative suppliers.
Successful innovation in the area of procurement requires adopting a more outcome
based approach where appropriate, which involves collaborating with suppliers to solve
problems rather than attempting to specify the precise solution at the outset. Involving
suppliers early on in the process, and equipping them with outcome-based specifications,
enables them to learn more about the underlying problem the procurement is seeking to
address and gives them greater freedom to develop innovative solutions.
The government is already seeking to innovate in this area through the use of new
procurement tools:
• e-auctions – these are instantaneous, electronic negotiation processes which

allow suppliers to bid online for business. They are simpler and more transparent
that conventional methods, and typically save 20 to 25 per cent of the project
value.
• Zanzibar e-marketplace – this is a web-based procurement tool connecting
suppliers and their catalogues with government buyers and their demands.
Buyers can compare prices and specifications and then operate the entire
procurement process through the online system, making procurement a
paperless process.
• Supply2.gov.uk – this is a portal which facilitates small and medium sized
businesses to bid for government contracts valued under £100,000. It opens up
the lower-value public sector contract opportunities market to as wide a range
of businesses as possible, enabling small businesses to access government

contract opportunities, and providing public sector buyers with the opportunity to
identify a wider range of potential suppliers more easily.
Implementing innovative procurement procedures does present some challenges.

Innovation and risk-taking in public procurement are generally not encouraged, and the
Office of Government Commerce (2004) acknowledges that public procurement has a
tendency to opt for low-risk solutions, low-margin players, and mature technology. This
is at least partly due to the competing objectives and bureaucratic barriers that public
procurers face, which discourage risk-taking and foster an environment where innovation
is not routinely welcomed or rewarded (see also NESTA, 2007).
Efficiency
The aim of the efficiency agenda is to deliver better quality public services as effectively
as possible, and to release resources to fund frontline services. A core part of this work
involves innovation in service delivery, investment in technology, rationalisation of back-
office functions, and organisational development.
The Gershon Review, published in July 2004, focused on the government’s key objective
to release resources to fund frontline services by improving the efficiency of service
delivery. The report set out the scope for further efficiencies within the public sector’s
back office, procurement, transaction service and policy-making functions, and identified
opportunities for increasing the productive time of professionals in frontline public sector
services. It offered a series of cross-cutting recommendations to embed efficiency across
the public sector, identifying the opportunity to make £21.5 billion of sustainable efficiency
gains.
The Comprehensive Spending Review 2007 (CSR07) is intended to go beyond the

ambition set out in the efficiency programme of the 2004 Spending Review, and to deliver
savings of at least 2.5 per cent per year over the CSR07 period. It focuses on driving
forward efficiency on five key areas:
• Achieving savings from corporate services via streamlining processes and

increased collaboration – including in procurement – across the public sector,
and freeing up frontline staff from unproductive tasks to focus on service users.

• Conducting reviews of departments’ baseline expenditure, and setting new long-

term objectives for these in light of changing priorities.
• Reviewing the opportunities for transforming the delivery of public services,
looking at how innovative practices can deliver improved services at lower cost.
These will include electronic service delivery, rationalising the number of contact
centres and local offices, and better information sharing and management
between organisations and departments.
• Preparing pay and workforce plans based on the government’s two per cent
inflation target to ensure sustainable pay growth.
• Taking forward the recommendations of the Lyons Review of Asset Management
to maximise the value of the public sector asset base. This will include the sale
of assets, better utilisation and management of assets retained, and more robust
assessments to support future investment decisions.
The Varney Report, published in December 2006, also identified opportunities to

strengthen public service delivery, making it more accessible, convenient and efficient to
meet changing citizen and business expectations. The report’s recommendations include:
• The development of a change of circumstances service starting with

bereavement, birth and change of address by 2010, so citizens do not need to
notify multiple public services.
• Providing citizens and businesses with single informational and transactional
websites through Directgov and Businesslink.gov.
• Improving public sector contact centre performance, including reducing operating
costs by 25 per cent, to release £400 million.
• Developing a cross-government identity management system to enable greater
personalisation of services and to reduce duplication across government.
Joined up services
Joined up working is intended to improve public service delivery by working differently
across traditional organisational boundaries, to refocus existing resources and free up
new resources. It is an approach which aims to avoid the problems commonly associated
with the ‘silo’ mentality, such as poor communication, lack of co-ordination, duplication,
and a lack of awareness of the bigger picture.

Joined up services seek to achieve horizontally and vertically co-ordinated thinking and
action, and have four main benefits (Pollitt 2003). Firstly, joined up service provision can
eliminate contradictions and tensions between different policies, and prevent situations
where different policies undermine each other. Secondly, it will enable better use to be
made of scarce resources, by avoiding duplication or contradiction between different
policies or programmes. One way this could be achieved is through the sharing of
buildings, staff, information or equipment among numerous organisations, leading to
a more efficient use of resources. Thirdly, it aims to improve the flow of ideas and co-
operation among key stakeholders in a particular policy field or network, thus producing
‘synergy’ and smarter ways of working. For example, collaboration between the police,
local authority housing departments, schools, local businesses and residents associations
may generate innovative and more coherent and effective approaches to local
governance. Finally, it offers an integrated, seamless set of services from the perspective
of users, for example through the provision of ‘one-stop-shops’ for accessing a wide
range of local services, or through the introduction of a well-designed website allowing
easy access to many public agencies and services.
Transformational Government
Running through all of the above policy drivers of innovative practice in public services
is the Transformational Government strategy. Published in November 2005, the strategy
was the first comprehensive statement of government policy that sought to put technology
at the centre of the agenda to transform public service delivery. Its aim was to maximise
the possibilities offered by technological development to change the way government
works and delivers public services.
There are three strands to this vision for government transformation. Firstly, services
enabled by IT must be designed around the needs of the citizen or business, not the
provider, and should be delivered through co-ordinated, modern channels. The aims
of this are: to improve the experience for customers; to achieve better quality policy
outcomes; to improve efficiency through the reduction of duplication, paperwork burdens
and routine processing; to increase delivery capacity; and to streamline processes.
Secondly, government must move towards a shared services culture, whereby front-
office and back-office functions, including infrastructure and ICT, are shared by multiple
agencies and departments. This is intended to release efficiencies and increase
standardisation and simplification across public sector bodies. And thirdly, there must be

a broadening and deepening of professionalism with respect to the planning, delivery,

skills, management and governance of ICT enabled innovation in the public sector. This,
it is hoped, will result in more successful outcomes and fewer expensive failures, as well
as engendering increased confidence by citizens and politicians in the potential for public
services to deliver change.
Since its inception, the core of the strategy has been the first of these elements, and the
transformational agenda has been particularly focused on the development of a new
generation of citizen-focused services. At the same time, there have been long-standing
concerns about the public sector’s ability to successfully manage and deliver large-scale
ICT initiatives, which the emphasis on professionalism seeks to address. This issue is
acquiring greater significance as ICT plays a central role in an ever-wider range of public
services.
In terms of public sector workers and the public service supplier community, it may be that
the emphasis on shared services is the most important element of the strategy. As well
as potentially delivering significant energy savings, the programme of shared services
will fundamentally alter the way that government operates and the way it utilises ICT. Its
heightened priority across all levels of government is reflected in the fact that the need
to move towards shared services has been made a central pillar of the transformational
strategy.
2.3 Until very recently, debates around innovation focused almost exclusively on the private
Experiences sector. Attention on public sector innovation also tended to focus immediately on specific
of innovation practical examples. For these reasons, systematic overviews of the processes and
in central experiences of innovation have been thin on the ground. This situation has been partly
and local addressed, however, by the publication of two important new studies. The first is a
government National Audit Office study examining the experience of innovation in central government,
the other, an Audit Commission report focussing on recent innovative practice in local
government. These studies have drawn attention to the facilitators and barriers of
innovation in the public services, and to how public managers conceive of innovation.
Central government
In 2006, the National Audit Office published the results of research conducted by the
London School of Economics into the experiences of innovation in central government

organisations (NAO, 2006a). The report made use of evidence from a wide range of
sources, including survey data from central government departments, and interviews and
focus groups involving senior and middle ranking civil servants, private sector contractors,
and members of the public.
The innovations submitted by government agencies fell into three main types. The
largest category consisted of those initiatives that were concerned with joining-up
across government agencies in order to improve service delivery. The next largest group
included those projects that aimed to improve performance management in other, diverse
ways. The final type of innovation consisted of projects which sought to improve public
services for end-users.
The prevalence of the first and third types reflects past ministerial desire for better
customer service and joined-up government. Some newer government priorities were not
yet represented in the dataset of innovations, so for example, only one project submitted
was concerned with environmental sustainability. A third of nominations were IT and web-
based innovations, with other projects focusing on areas such as administrative systems
and human resources.
The survey indicated that some agencies and departments found it difficult to identify any
innovations taking place within their organisation. In particular, those agencies which are
closer to policy implementation found it easier to nominate innovative projects than those
whose work is comparatively remote from policy implementations.
Respondents noted that the innovations they submitted were primarily concerned with
organisational changes and service delivery, and had little bearing on government or
ministerial policy. Interview data from civil servants indicated a perception that this
reflected a shift in the role of the civil service, and that their influence has narrowed to
service delivery and organisational matters, rather than policy formation. The types of
projects submitted by agencies and departments suggest that they frequently think about
innovation in terms of one-off changes or ideas, rather than conceiving of innovation as
a long-term process where a series of changes are introduced. Only one in eight of the
initiatives put forward were explicitly part of a wider process of continual innovation, while
over a third were stand-alone changes.

A variety of factors were identified by departments and agencies as driving the

implementation of innovations. While political and ministerial influences were found to
play a significant role in triggering any initiative, this role diminished when it came to
sustaining the project through its early stages. Changes in ministerial and government
policy priorities, combined with efficiency drives, were found to be vital factors motivating
the introduction of many innovations.
Survey respondents identified members of senior or middle management as being

the primary actors involved in getting most innovations started, thus indicating that
innovation in central government organisations tends to be a strongly top-down process.
In departments and agencies, senior and middle managers were pinpointed as primary
originators of innovative projects twice as often as were the central government or
ministers. Other organisations were identified as important secondary sites of novel
projects, with frontline and individual staff playing a very small role, and customers or
clients not identified as triggers of change at all.
When it came to the problem of how to sustain innovative projects, the most important
issues identified were the availability of funding, cross-cutting work by specific innovation
units, looking actively for spin-offs, and experimentation. Internal factors identified as
crucial for an innovation’s continued success included methods for generating new ideas,
such as formalised brainstorming, away days and group events, and the use of a regular
internal review or audit. The most important external factor highlighted by departments
was co-operation across organisational boundaries, with more than half of the agencies
surveyed demonstrating evidence of inter-agency co-operation. This is particularly true
of executive agencies and non-departmental bodies, who benefit greatly from guidance
and support from their supervising departments. Contractors were also identified as an
important source of external support.
Significantly, some of the civil service and agency officials reported in interviews and
focus groups that there had been major improvements in the overall climate supporting
innovations in service delivery within central government. Junior and middle level staff
in particular cited strong support from top officials, especially those brought into the civil
service from outside, as well as strong drives from ministers for innovation. The report
suggests that this may in part be due to the fact that greater numbers of entrants to the
civil service are now coming from the private sector, local government or the NHS, which

may have the effect of diversifying civil service culture. The top barrier to innovation
identified was working with external stakeholders, principally the difficulty associated
with securing agreement among different viewpoints and interest groups. The remaining
identified obstacles were largely internal and derived principally from a reluctance to
accept new ways of operating and fragmentation within government.
In the interviews and focus groups with civil servants, many participants reported that
government organisations appear to be rather weakly orientated towards making
purposeful innovations. Many perceive that their superiors are concerned more to avoid
making mistakes than with taking the risks required to accomplish change, and that
the desire to avoid potential embarrassment or ‘black marks’ on their records leads
many officials to adopt very risk-averse attitudes. Moreover, virtually all private sector
respondents strongly believe that civil servants are too slow in considering potential
changes and overly cautious about implementing novel ideas. They believe there to be a
lack of incentives for officials to ‘stick their necks out’ or act as risk takers.
Agencies were more likely to claim ‘soft’ impacts for their innovative projects, rather than
‘hard’ achievements. The top three impacts claimed by departments were: improving
service delivery; improving responsiveness; and creating new resources. However,
‘hard’ outcomes such as reducing core costs and improving working life for staff were the
impacts least claimed by respondents. This suggests that better information is required
about where costs are incurred, if innovations are to save money; otherwise, they may
only add to staff workloads and increase overall core costs.
Local government
The most recent and comprehensive survey of innovation at the local level is the
Seeing the Light report from the Audit Commission (2007). This demonstrated extensive
evidence of innovation, with 43 per cent of local and fire authority respondents reporting
that a ‘great deal’ of innovation was taking place within their organisation, and 52 per cent
reporting ‘some’ innovation.
While pressure to innovate can arise in almost any aspect of local authority activity,
authorities reported that they were most likely to undertake innovative projects in areas
of poor performance. Innovations are commonly introduced to address declining service
usage, to plug gaps in the services offered to citizens, to overcome long standing

problems such as barriers to engagement with local communities, or in response to a

difficulty or crisis.
The survey found there to be five main factors driving innovation:
• Focus on greater efficiency – this was found to be the strongest driver of

innovation. 79 per cent of authorities surveyed reported that they experienced
pressure to be more efficient all or most of the time, with a quarter experiencing
it constantly. This pressure stems from the requirement, following the Gershon
review of public sector efficiency, to submit annual efficiency statements to
central government, as well as from the constraining influence of central
government on local authority budgets.
• Pressure from central government to innovate– authorities reported experiencing
other types of pressure from central government to innovate. This may be in
response to regulatory requirements, legislative changes, local government
reorganisation, policy initiatives, or recommendations from auditors or inspectors.
• Examples of successful innovation from elsewhere – this was found to provide
a strong impetus for local authorities to introduce novel strategies. This is partly
because public bodies need to be seen to offer the same services to the public
as those provided by their peers, and do not want to fall behind. However
it is also due to the positive example set by innovations elsewhere, which
demonstrate to councils that there are other ways of operating.
• Local political pressure – this can either come from local councillors and their
specific political groups and parties, or from demanding outcomes which require
an innovative response to be delivered. The majority of authorities reported that
this pressure was an essential or very important driver of innovative practices.
• Expectations of local communities – genuine, bottom-up pressure from
communities to innovate was not found to be widespread. However, in those
cases where it did occur, it was a powerful driver of innovation. This pressure can
arise from formal consultation processes, informal citizen discussion, or trends in
service usage figures indicating dissatisfaction.
The survey also examined crucial elements in the formulation and development of
innovative ideas at the local level, and identified six critical factors:

• Ambition of authorities (leaders set aspirational, outcome-based targets while

being flexible in how managers achieve them).
• Openness to novelty (explicit commitments to innovation and risk taking).
• Organisational structure (joined up working across traditional service boundaries;
cross-cutting structures allowing access to information; devolved responsibilities
and flexible portfolios for staff).
• Empowering staff and partners (engendering a culture where creative individuals
flourish; encouraging staff to contribute ideas; being visibly receptive to new
approaches; engagement with local partners, voluntary and community
organisations).
• Space for creative thinking (brainstorming sessions, away-days, problem solving
groups; discussion groups and forums).
• Using information effectively (analysing data, identifying trends and anomalies;
providing evidence of potential performance improvements and efficiency
savings).
The report argues that the capacity of any organisation to innovate successfully
is dependent upon strong leadership and project management, a commitment to
partnership working, and the ongoing involvement of members and users. Here, the
single most important factor for the success of local authority innovation identified is the
leadership of senior management, and in particular, the willingness of chief executives to
lend their support in the initiative’s early stages. They play a critical role in selling ideas
both within the council and to external partners and stakeholders. Middle managers too
perform a vital function, by securing the support of political leaders and senior managers,
and ensuring commitment from operational personnel. However, in addition to securing
management support, it is also important that authorities ensure they have the backing of
their members, and that they involve their users in the design and development of specific
innovations as much as possible.
Successful innovative projects frequently make use of partnerships, particularly in those

projects aiming to deliver new services to users. Partnerships take a variety of forms
including collaboration with outside organisations and joining forces with other authorities
to develop shared services. Partnerships are beneficial to authorities because they offer
flexibility in the management of complex, cross-cutting issues.

The report also identifies several potential barriers to the successful implementation of
any innovation project. These are:
• Failures in risk assessment and risk management.

• Over-estimation of capacity.
• Lack of effective leadership or strategic input.
• Poor organisation and communication among senior officers.
• Absence of or poor quality project management.
• Inadequate reporting to members.
• Failings in the use of external advice.
• Poor management of contractual partnerships.
• Poor procurement practice.
The most innovative authorities are ones which maintain an awareness of ongoing policy
debates, funding opportunities and possible pilot schemes, as well as proactively seeking
examples of notable practice in other public bodies, and organisations overseas. Active
innovation provides benefits to local authorities in enabling them to improve value for
money and achieve more effective service delivery to their users. There is also evidence
that senior management and members gain the knowledge, skills and confidence to
undertake future initiatives and to expand the scope of their innovations by bringing in
partners or innovating in other areas.
Implementing innovation projects can frequently have wider benefits than those for which
it was primarily designed. The report suggests that there is potential for ideas and novel
solutions to be disseminated throughout the public sector, so that other public bodies
facing similar challenges can adopt new strategies. There is also much to be learned
even from those projects which are unsuccessful, and failed innovations may lead to a
successful alternative line of inquiry or bring an end to ineffective approaches. Authorities
admitted to learning as much from failed initiatives as successful ones, and that sharing
their experience of failure can prevent other bodies repeating their mistakes.
2.4 Having identified the contexts of both policy and practice in regard to public service
Recent innovation in the knowledge economy, we now consider existing examples of knowledge
examples economy related innovative practice. Here, we are able to give a further practical focus
to the above discussions and to highlight successful outcomes in respect of existing
innovative practice in the public services.

Given the definitional complexities (see Section 1) associated with identifying innovations,
we have drawn on examples that have already been identified as innovative in recent
studies by the National Audit Office (2006b), the Audit Commission (2007) or the EU
PUBLIN project on public sector innovation (2006). However, the examples below are
here further identified as examples of knowledge economy-related innovations. Here,
and following Brinkley (2006), we understand the relation between innovation and the
knowledge economy to be a broad one, incorporating not only product and service
innovation but also innovation in ‘softer’ areas such as work organisation, knowledge
management, creativity, design and marketing – and the use of ICTs to make all of these
happen.
Cabinet Office: www.direct.gov.uk

Directgov is a Cabinet Office innovation designed to deliver online government services
to the public more efficiently and effectively. It is intended to be a central point of
reference for citizens to access a range of government services and facilities online, and
according to the Cabinet Office is the largest such e-transformation project in the UK.
Rather than being organised around government departments, it is designed so that
users can find the services they need according to topics (such as motoring) or groups
(for example disabled people).
The development of the Directgov project was driven by monitoring of similar initiatives
by overseas governments, notably in the US, Canada and Australia. Key factors for the
success of the scheme include conducting market research with potential users, as well
as cooperating closely with government ministers, other government agencies, interest
groups and the supranational bodies such as the EU. The project involved around ninety
members of staff and cost a total of £16 million. Since its introduction there has been an
increase in the use of e-government services. It has been successful both in improving
existing service delivery, and in offering new or extended services to citizens. It has
enabled existing resources to be used more effectively and improved the flexibility and
responsiveness of service delivery.
Commission for Patient and Public Involvement in Health: Knowledge Management

System IT System
The Commission for Patient and Public Involvement and Health (CPPIH) implemented a
web-based Knowledge Management System designed to improve citizen engagement

in health. It enables the exchange of information between the CPPIH and the 5,000
individuals in their forums and forum support organisations, as well as with patients and
members of the public. The system is flexible in that individual users can adapt it to suit
their preferences.
The initiative was developed primarily as a response to new government priorities in

health care, and was motivated by the greater availability of new technology, as well as
the desire within the organisation to increase efficiency. Internal factors important to the
scheme’s success were the use of regular review processes, practical experimentation
and formalised brainstorming, as well as availability of requisite funds. Externally, the
Commission conducted market research among potential users as well as working
closely with private firms, such as the Department for Health IT contractor.
The scheme cost a total of £4 million. It has been successful in improving service delivery
to customers and improving responsiveness and flexibility, as well as providing new and
extended services to users and improving the working life of staff. It has created new
resources and helped to reduce the cost of core business. Users from 650 organisations
are involved in maintaining the context of the website.
Companies House: Electronic Incorporations Service

Companies House introduced a web-based registration system for the incorporation of
new companies into its active register, which contains around two million companies in
England, Scotland and Wales. The service aimed to increase its usage levels quickly
by targeting key intermediaries such as company registration agents and accountants,
encouraging them to register their clients’ new companies online.
The main factors driving this project were internal efficiency drives and customer
demand, particularly from company registration agents who wanted to move to electronic
submission. The service employs twenty-three staff and cost a total of £223,000. Its
main areas of impact have been in reducing costs, creating new resources, offering
new services and improving the way in which services are delivered. Standard paper
submissions typically take five days to process; with the electronic service, 95 per cent
of submissions are turned around within 24 hours. The charge to the customer has also
been reduced. Customers are charged £15 for electronic submissions, compared to £20
for paper submissions. Companies House also offer a premium, same-day incorporation;

services for this are £30 for electronic incorporation, compared with £50 for paper based
submissions.
Of the 7,000 companies formed during an average week, over 80 per cent are now
incorporated into the register electronically. The e-service has allowed Companies House
to accommodate a 60 per cent growth in the volume of incorporations managed by its
team, and has enabled them to reduce staff in this area by 33 per cent.
Defence Estates: Procurement of specialist support services for delivering Lands

Management Services
This Defence Estates (DE) initiative is designed to improve the provision of specialist
support services. In cases where it is not economically viable to deliver these services
within DE, they had previously contracted out to 54 providers of surveying support. This
work is now managed by two specialist external service providers, which has the effect
of enhancing the DE’s technical capability. The scheme has enabled the partners to be
provided with holistic information, and encouraged the adoption of private sector best
practice techniques into strategic estate management.
The innovation was primarily driven by the demand for greater efficiency combined
with changes in the way DE resources are used. The use of formalised brainstorming
sessions and training and staff development programmes were important internal factors
in the project’s success. DE conducted market research and cooperated with private
sector advisors, who were able to advise them on which services to outsource and which
to retain in-house.
The scheme cost a total of £235,000. It is part of a DE plan to reduce the delivery costs
for Lands Management Services by 18 per cent over the next two years, which should
save a projected £2.24 million. The overhead costs of the innovation have been rapidly
overtaken by the savings it produces.
Defence Estates: Project MoDEL – Prime Plus Contracting

Project MoDEL is a Prime Plus Contracting Strategy innovation. This means that rather
than breaking down large projects into component parts, Defence Estates (DE) employs
one major contractor in a programme management role. This major contractor takes the
lead in co-ordinating and delivering the entire project, including construction, financing the

deal, relocation of personnel and equipment, and selling surplus sites. The benefit of this
is that the integration risks are transferred to the contractor, who can focus on creating
value through financial structuring, programme management and procurement skills.
The innovation was motivated by DE efficiency drives, and was the result of cooperation
between DE and private sector firms, Partnerships UK and external consultants. To
optimise their strategy for development of the sites involved, the project staff worked
closely with English Partnerships, the Greater London Authority, Local Authorities, ODPM
and other Strategic Governmental Bodies. Internal factors important to the project’s
success were the availability of funds and the use of training and staff development
schemes.
The total costs of Project MoDEL were £6 million. It is projected to reduce core business
costs by £14 million per year, as well as enabling more effective use of existing
resources, improving service delivery, responsiveness and flexibility, and improving
the working life of DE personnel. Most significantly it is expected to be instrumental
in achieving the organisation’s goals of delivering sites fit for defence capability, and
releasing brown field land for redevelopment.
Department for Environment, Food and Rural Affairs: Whole Farm Approach to
regulatory interaction with farmers
This innovation is an overarching strategy aiming to modernise the Department for
Environment, Food and Rural Affairs’ (Defra’s) interaction with members of the farming
community. It hopes to improve the quality of services Defra provides to the farming
community by enabling fast and efficient paperless communications between them and
regulators. It aims to do this through the development of an electronic channel through
which all interaction between farmers and regulators will take place. Initially data will be
collected from farmers via an electronic questionnaire, which will then be utilised to target
regulatory activity. Farmers whose responses demonstrate good practice will be less
likely to be inspected.
The primary triggers driving this innovation are a policy review by Defra as well as work
with peer organisations, as well as increasing availability of new technology making such
an initiative possible. The scheme employs around 60 staff and to date has cost £5.15
million. It is expected to have a significant impact in terms of making more effective use

of resources, by reducing duplication of effort by Defra employees and farmers. It is

projected that the strategy will reduce core costs, as well as offering extended services to
citizens and increasing Defra’s flexibility and responsiveness.
Disability and Carers Service: Helpline Transformation Project

This initiative aims to improve the quality of services provided to the public by the
Disability and Carers Service (DCS) helpline. The strategy aimed to improve the low
standards of service experienced by customers phoning the helpline for information. In
2004/05 less than 50 per cent of calls were answered within 30 seconds, falling way short
of the 90 per cent target, and 18 million engaged tones were registered. This innovation
aims to generate increased capacity and pull together disparate services by establishing
a centrally integrated operations unit. As additional resources become available, this
should improve flexibility and enable expansion.
The main factors driving the implementation of this scheme were the crisis of missed calls
and poor customer service, combined with the availability of new forms of technology
for dealing with the problem. Around 800 staff, including two senior managers, were
involved in the programme, which cost a total of £880,000. It has brought about very high
advances in service delivery to customers and has greatly improved the effective use of
resources. It is also expected to bring improvements in the way the DCS evaluates its
performance.
Data has shown an increase in the number of calls answered, a fall in the number
of engaged tones registered, and high levels of reported customer satisfaction. The
helpline’s revised targets are to answer 90 per cent of calls with no more than one per
cent blocked. For the full year ending 31 March 2006, performance figures indicated that
92.4 per cent of calls had been answered, and that engaged tone figures were 36,654,
0.7 per cent of all calls presented. A survey conducted in May 2005 showed that there
had been a 91 per cent increase in the number of customers getting through to the
helpline on their first attempt. In May 2006, a customer satisfaction survey reported that
97 per cent of users rated the helpline’s service as good or very good, with 86 per cent
rating it very good.

Defence Communication Services Agency: Boxer Communications Towers

This initiative is designed to manage Ministry of Defence (MoD) property to achieve better
value for money. The network of 114 Boxer Communication Towers, redundant since the
end of the Cold War, have incurred annual costs to the MoD due to the need for safety
inspections, yet demolition or disposal would have been costly and difficult. In 2001 the
Defence Communication Services Agency (DCSA) entered into a 20 year agreement with
a specialist commercial partner, Arqiva, whereby they manage and maintain the towers to
an appropriate standard, and take responsibility for marketing and leasing them to third
parties.
Arqiva is paid a basic fee of £3,000 per tower, and generates income for the MoD by
subletting space on the towers to mobile phone operators. From the gross revenue Arqiva
deducts a ten per cent management fee, and the remainder of the income is split 88
per cent/12 per cent between the MoD and Arqiva. Over the life of the partnership the
MoD expects to generate annual gross revenues of £720,000. Only two DCSA staff are
employed in the administration of this initiative, the rest of the required personnel being
supplied by Arqiva. The project has been so successful in reducing costs of maintaining
the towers and creating extra revenue that it is being extended to other MoD towers.
Electronic Services for South Yorkshire: e@SY Connects

e@SY Connects is an innovation making it easier for people to access and stay in touch
with public services. The project originated in Barnsley, was later extended to Rotherham,
Doncaster and most recently Sheffield, so that it is now a service for the whole South
Yorkshire area. e@SY Connects is a ‘hub’ for accessing information and services. It can
be accessed via the internet, mobile telephones, digital television and interactive kiosks.
Services that can be accessed include: a 24-hour GP appointment service; a jobs service,
an e-petition facility; and information on local travel and events. The wide range of media
through which e@SY Connects can be accessed has advantages both for flexibility and
for social inclusion. Different media can be used for different types of enquiry, and the
introduction of digital television as an access point, for example, has made the service
more accessible to those who traditionally do not use the internet.
The project was initiated by Phil Coppard, Barnsley’s Chief Executive, in partnership with
Gary Simpson, manager of the South Yorkshire Communities Online Project (SYCOP).
SYCOP received £726,000 of Treasury funding to research electronic access to services,

and this money was utilised to develop e@SY Connects. The emphasis was initially
on the use of internet kiosks, but the number of these has been reduced as access
through telephone and digital television has been developed. This has also resulted in a
significant reduction in costs. The e@SY partnership includes health services, emergency
services, the Transport Executive, Yorkshire Forward and various voluntary agencies.
The project is run by three groups: the South Yorkshire Public Sector e-forum; a steering
group; and the South Yorkshire e-Forum Support Group.
Once the initial government grant had been exhausted, funding for the project proved
difficult to secure, so that at first Sheffield was not able to participate fully. However,
finance was secured from Yorkshire Forward and other sources, enabling the project
to develop, and it now receives its funding from the local authority budget. Although in
receipt of local authority funding, e@SY Connects is independent of the local authorities.
The inclusion of digital television into the framework also proved difficult at first, but this
was overcome through research into national digital television projects and deals with
television companies such as NTL.
The project has been facilitated by a number of factors including: a supportive local
authority; strong partnership working and networking; awareness of and research into
the needs of users of the service; and those involved keeping abreast of technological
developments and having the imagination to use them. The service continues to improve,
and recent innovations include the introduction of a system of digital communication
between parents and schools which would, for example, allow schools to inform parents
when children will arrive late from a school trip.
Engineering and Physical Sciences Research Council: Doctoral Training Accounts

and Collaborative Training Accounts
This project aims to develop Training Accounts for university postgraduate education
funding. Previously the Engineering and Physical Sciences Research Council (EPSRC)
allocated funding by peer review and quotas to university departments. This innovation is
designed to transfer responsibility for allocating postgraduate funding, research strategy
and financial management away from the EPSRC towards the universities themselves.
This innovation was primarily motivated by the desire to empower the research
community and to enable them to develop their own strategies and directions for

research, as well as the need to respond effectively to changes in the training

environment; in addition, new technology made such a scheme feasible. Market research
as well as close cooperation with universities and central government staff were important
factors driving the project’s success.
The introduction of Doctoral Training Accounts and the Collaborative Training Accounts
have yielded significant increases in the EPSRC’s responsiveness and flexibility, as
well as improving service delivery to end users, enhancing performance evaluation, and
improving the working life of staff. Together the two schemes are supporting about 1,800
new doctoral starts each year.
Highways Agency: Procurement of Variable Message Signage for the UK motorway

network
The Highways Agency (HA) has implemented an innovative process for the procurement
of variable message signage for the UK motorway network. The HA frequently purchases
large amounts of technologically sophisticated equipment, and is concerned to enhance
processes of technological development and innovation. However they also aim to
safeguard future projects from being hampered by the influence of overly dominant
suppliers, and to ensure this have developed a design competition strategy which
promotes design innovation whilst enabling the HA to retain a degree of control over the
process.
The HA gives tendering parties information about the equipment they wish to procure,
and then pays the competing firms to come up with a design. Rather than requiring the
competing firms to fund the development of their own prototypes, the costs of research
and development are financed by the HA. This encourages technological development
and design innovation, with the result that the HA receives a high quality, superior design
product. In certain cases, the HA will finance the prototyping costs of some, but not all,
competitors in order to prevent any one supplier becoming dominant.
The significant element of this design process is that the HA retains IP over the finished
design offered by the successful bidder. The HA considers design rights to be of great
importance, and where possible retains these in order to minimise risk and maximise their
control over the end product. This is particularly important to the HA because the agency
has had difficulties in the past with suppliers going out of business. In the case of this

happening again, retaining IP over the design will enable the HA to procure the same item
from a different firm.
The HA also makes use of specific sourcing and delivery practices which aim to prevent
supplier dominance, and manage risk through control of the supply chain. In particular,
they make use of a dual supply route, so that if one supplier fails to deliver, the other
party is given the opportunity to do so. This gives an incentive to the first supplier to meet
their commitments to the HA.
The message signage technology that has been produced as a result of this competitive
process has subsequently been sold to foreign markets, including agencies in New
Zealand and the Athens Olympics.
Home Office: Automatic Number Plate Recognition System

In cooperation with police forces, the Home Office have introduced Automatic Number
Plate Recognition (ANPR) on to the roads, which can capture car number plates on
camera and cross check them with databases of wanted or suspected vehicles. Used in
conjunction with police intercept teams, ANPR is able to track and investigate suspect
vehicles.
The availability of new technologies in character recognition was the main factor driving
the development of this initiative. Originally employed in counter-terrorism operations, the
technology was picked up by private sector organisations and then applied to police work.
ANPR employs five Home Office personnel, but will involve around 500 staff in partner
organisations, predominantly police forces.
The project is anticipated to cost about £25 million. Initial evidence suggests that it has
a significant impact on rates of car crime clean up, with officers using ANPR attaining an
arrest rate of nine times the national average. They also produced three times the rate of
Offences Brought to Justice compared to conventional policing.
Jobcentre Plus: Employer Direct online vacancy management system

This innovation is an online service, Employer Direct, where employers can register
details of their vacancies and Jobcentre Plus (JCP) can manage as effectively as
possible their incoming positions. This system is designed to enhance JCP’s role in
linking unemployed people to potential employment opportunities, by giving users real

time access to information about the latest vacancies. Employers can notify JCP about
new openings at any time, either by telephone or online, and are able to manage the
vacancies themselves if they so choose, by taking applications directly.
The scheme was developed over a five year period and arose as a result of greater
availability of new technologies, as well as in response to efficiency drives. JCP worked
closely with central government staff and government agencies, as well with private
sector firms, in the project’s development.
Twenty-five JCP personnel and another ten people from partner organisations were
involved in the implementation of the system. It has resulted in significant improvements
in service delivery and extended service provision, as well as saving a projected figure of
£1.5 million between 2005/06 and 2007/08.
Department of Trade and Industry: Knowledge Transfer Networks

Knowledge Transfer Networks (KTNs) are specialised networks existing primarily for
UK business. They create links between businesses, the finance community, research
institutions (including universities) and government, and facilitate the sharing of
knowledge between organisations and the development of ideas, as well as improving the
flow of communication between business and government. Currently over 15,000 people
and organisations are registered with 22 KTNs, each with its own area of specialisation
in technology or business. They cover a range of specialisations and work with a variety
of organisations in three main areas: Business Sectors or Fast-growing Markets; Existing
and Emerging Technologies; and Underpinning Science and Technology. Contact with the
scientific community brings access to new ideas and technologies, which is crucial since
the main aim of the KTNs is to improve the development and uptake of innovative ideas
in the UK.
KTNs came into being with support from Government Departments, Research Councils,
Regional Development Agencies and Devolved Administrations. They started life as
Innovation and Growth Teams, developed through Faraday Partnerships and the
Technology Programme Competition of April 2004, and have been further extended by the
Technology Strategy Board (TSB). They have the following aims: to improve connections
between businesses and across sectors, and between business and science in order to
spark innovation and collaboration; to facilitate the transfer of knowledge between supply
and demand sides of business through an efficient service; to provide opportunities for

individuals and organisations to meet and communicate in the UK and internationally; and
to provide a forum through which business can coherently present its needs and issues to
government. The link between businesses and government means that businesses can
easily keep government informed of their technology and funding needs and can present
their views on policy and regulation. The Networks are playing an increasingly prominent
role in the Government’s Technology Strategy and the Technology Programme, as well as
giving input on UK business priorities in the EU Framework Programme.
KTNs are helping the UK meet its aim of increasing UK industrial Research and
Development to 1.7% of GDP. They have played an important role in generating growth
and improving profitability by linking business and academia in creating new products,
services and intellectual property, and have facilitated a more effective identification
of industry priorities. Industrial performance has benefited from an enhanced flow of
knowledge, experience, ideas and people, thereby enhancing the UK’s global position in
the spheres of science, research and innovation.
London Connects: ReportIT

ReportIT is an innovation for reporting street problems developed by London Connects.
It is a system which covers the whole of London and can be accessed free of charge
by residents in all of London’s borough councils. People can use the system to report
problematic situations via any London council website. The system precludes many of the
difficulties that citizens previously experienced when contacting their borough about street
problems. It avoids replication of reporting as the system shows when the same issue has
already been reported at the same location, and it prevents the difficulty and frustration
involved in trying to find the right person to speak to, since the system automatically
directs the report to the correct authority once the problem is located. Finally, people who
have reported a problem can check its resolution progress through the same system.
It is highly innovative because it covers the whole London area and combines e-forms,
internet and mapping.
Reporting street problems (such as dumped rubbish, abandoned cars or excessive noise)
was previously subject to a number of difficulties. Many of London’s citizens were unclear
which borough council was responsible for the area where the matter occurred, and
so might call one council only to be referred to another. ReportIT avoids this frustrating
scenario since it automatically refers problems to the appropriate borough. Citizens can

access it through the ‘Your London’ website or most council websites. There they select
the kind of situation they are reporting from a list, locate the problem on an interactive
map and fill in a short e-form. The system automatically sends the problem report to the
correct authority based on where it is located on the map. The map also shows existing
reports of the same nature at the same location, which avoids duplication. The system
can be accessed by telephone or in person, since call centres and council workers have
access to the system.
A clear benefit of the system is the simplicity for the user. It also facilitates a faster
response to problems raised, since reports are directed automatically to the right person.
It has resulted in a reduction in costs for local authorities, not least because one system
is shared by all boroughs, rather than systems being duplicated. The cost of developing
ReportIT was £50,000, which is equivalent to the average cost of establishing its own
system for a single London borough. This has yielded savings of £600,000 across twelve
boroughs. Maintenance costs for ReportIT come to £13,750 annually. This also generates
savings for boroughs who might otherwise have incurred the cost of running their own
system. Additionally, the greater ease of use of the new system has resulted in increased
engagement between citizens and their local authorities.
At the start of the project, the ReportIT manager established a team of six London
boroughs who agreed to pilot the scheme, with a further six boroughs adopting it soon
after. Funding came from subscribing boroughs. Obtaining the support of all 33 boroughs
was a significant challenge, which was achieved through pro-active promotion by the
manager and her individual engagement with boroughs. Other factors in the project’s
success include a good ‘technology partner’ who had a history of working well with local
authorities, and central government support, since the project was set up in response to
a national e-government policy. It is suggested that lessons to be learned from ReportIT
mainly concern promotion of the project at an early stage, as well as planning out its
practical implications (costs, sustainability and so on) from the start.
Although the system is currently only used for reporting street problems, the model has
clear potential for replication in other areas, and boroughs are looking to extend its uses
to cover a range of services, such as registration of births and changes of address.

Ministry of Defence: Joint Personnel Administration Programme

This programme is designed to transform the military human resources administration
from 250 disparate and bespoke systems into one centralised, standardised system,
incorporating staff from across all three branches of the Services. A Joint Personnel
Administration Centre will be established to provide technical support to all personnel
and answer any queries they may have. Staff will be given responsibility for their own
administration and will be granted access to their own personnel records.
This programme has been developed in response to the problems encountered by the
use of existing personnel administration systems which were inflexible, incoherent and
fragmented. The Strategic Defence Review White Paper laid down a ten year plan for
transforming personnel administration within the military, and this programme aims to
meet some of those objectives.
Around 140 Ministry of Defence staff, plus another 120 seconded or contracted from
other organisations, are involved in the implementation of the system, which is expected
to cost around £150 million. It is projected to save around £100 million per year, partly
through the reduction of approximately 1,400 administrative jobs. It is also hoped to
improve service delivery, giving staff online access to their personnel records, as well as
increasing efficiency by reducing the amount of form filling currently required.
National Institute for Health and Clinical Excellence: Technology Appraisal Process
This initiative is concerned with the ways in which the National Institute for Health and
Clinical Excellence (NICE) evaluates the health costs and benefits of technologies
(such as drugs, types of operation, medical services) and produces guidelines on their
use to the NHS. It is intended to acquire maximum possible input from a wide range
of consultees and stakeholders, and well as enabling maximum understanding among
those people. NICE believe the system to be unique in the world among public health
organisations, and it is designed to be an open and transparent process leading to robust
guidance.
The process was developed in response to new priorities set out in a government
manifesto combined with a shift in Ministerial priorities. Ministers working closely with
central government set up NICE, and designed the appraisal process. Hundreds of staff
from partner organisations were involved, as well as seven NICE senior managers and

fifty other NICE staff. It has resulted in significant advances in delivering services to end
users, creating new resources, and improving the way in which organisation performance
is evaluated.
Salford Primary Care Trust: Patient-Oriented Education System for Diabetes

This service innovation is the result of a collaboration between the Salford Primary
Care Trust (PCT) Diabetes Education Unit and a group of education specialists from
Manchester Metropolitan University (MMU). It is a novel, patient-centred programme of
education for patients with type 2 diabetes, which reflects a shift away from traditional,
paternalistic models of health care provision and towards a focus on the individual
patient’s needs. This approach is of particular value in the case of type 2 diabetes, which
can be managed through a combination of diet, exercise and medication, as active
patient participation is needed if treatment is to be successful.
Several factors drove the development of this innovation. The first of these is the
increasing prevalence of chronic illnesses such as type 2 diabetes in the UK, and the
resultant strain put on NHS resources by treating conditions associated with them. This
prompted a significant rethink about the ways in which chronic illnesses are managed
in by the NHS, as well as a push towards increased standardisation of care. Leading
this drive towards greater standardisation were guidelines laid down by the National
Institute for Health and Clinical Excellence (NICE), and the creation of a National Service
Framework (NSF) for the treatment of diabetes. These guidelines aimed to achieve
more cost effective, higher quality, and standardised care and management for diabetes
sufferers. Previously diabetes education tended to be highly unstructured and varied
enormously depending on the skills, expertise and workloads of staff at different hospitals.
Another significant factor in the development of the system is an organisational reform

affecting the location of diabetes management which occurred in the NHS in 2002.
Responsibility for care of type 2 diabetes patients transferred from secondary care
institutions, ie hospitals, to primary care institutions, ie GP practices and community
health services. This change has placed a huge burden on the primary care institutions,
particularly as there has not been a transfer of additional money and resources to deal
with this extra workload. As well as this shortfall in financial resources, another difficulty
arising from this transferral of responsibility is that many GP practices do not have the
necessary knowledge, skills or experience to effectively manage type 2 diabetes. This

means that in addition to educating patients as to how best to manage their condition,
additional training is needed by many primary care medical practitioners. This lack of
expertise, compounded by a lack of willingness evidenced by some GPs to take on the
responsibility for diabetes treatment, has serious implications for the quality of patient
care.
Current NICE guidelines and NSF standards are vague about the form and content
diabetes education should take, stating only that it should be on-going and patient-
centred, aiming to empower people living with the conditions and reduce costs to the
NHS by reducing diabetes-related health complications. These loose requirements give
PCTs a degree of flexibility in their education programmes. Salford PCT is exceptional in
the UK in that there exists a specialist Community Diabetes Team, which arose not as a
response to widespread organisational reforms that have taken place within the NHS, but
originated from the activities of individual, local ‘champions’. A diabetes expert at Salford
Hope Hospital, Dr Robert Young, came up with the idea of pooling all the short-term
payments made to GPs for taking on diabetes patients, and using it to set up a dedicated
education unit. The team’s future has now been secured following a successful bid for
long-term funding to the Department of Health.
A further factor critical to the development of the education programme was the funding of
a project enabling a team of education specialists from MMU to work with the Community
Diabetes team. Together they designed a practical and effective patient-oriented
education programme that would be viable within the financial and other resource
constraints of Salford PCT.
Pension Service: State Pension Forecast e-service

This is an initiative designed to enable citizens to get an online state pension forecast
in real time, via the Department of Work and Pensions and HM Revenue and Customs
computer systems. Through the Pension Service website, citizens can receive predictions
on the basis of NIRS2 data and calculations made by Department for Work and Pensions
software.
The innovation came about as a response to new Ministerial priorities and government
initiatives, related to the e-government strategy and the joining up government aims.
Around thirty staff are involved in the project, ten from the Pension Service and twenty

from partner organisations. Including operating and running costs for a five year period,
its total cost is £18.2 million.
This innovation has offered new services to citizens, and up to the end of March 2006,
over 130,000 forecasts have been delivered. Whereas previously a forecast would take
up to 40 days to arrive in the post, calculations can now be delivered online to the user in
30-45 seconds.
Rotherham Metropolitan Borough Council: e-Benefits

The eBenefits initiative piloted in Rotherham is a web-based system enabling users
to make enquiries and apply for benefits online, and allowing Benefits Agency staff to
follow claims and store records. The project started in Rotherham in 2001, and following
success there is to be put into action across the country. The system includes Housing
Benefit, Council Tax Benefit and Free School Meals, and applicants can use the system
to apply for these online by completing a single e-form. They can also utilise the system
to find out their eligibility for 61 other benefits. Applicants can make claims via the
internet, public kiosks or through digital television. Completed e-forms and information
potentially affecting a claim are stored electronically, making it easier for the Benefits
Agency to monitor and assess claims.
The increased efficiency of the eBenefits system has advantages both for claimants
and benefits agencies. A new claim under the e-benefits system typically takes 1 hour
25 minutes to complete, compared with 2 hours 10 minutes under the old system. This
makes the application process far less daunting to claimants, and many are encouraged
to apply for the benefits to which they are entitled. Benefits agency staff meanwhile are
able to use the time they save for offering wider welfare advice and investigating benefit
fraud. The e-system is also more efficient in detecting fraud and overpayments. The
Benefits Agency has noticed a ‘drastic reduction in costs’ as a result of implementing
the system, and savings for the council of around £250,000 a year are anticipated. This
money will be used for improving welfare advice and support systems. It is calculated
that, should eBenefits be taken up be every council in the country, around £36 million
could be saved across England.
The pilot scheme was facilitated through partnerships with BT, who helped devise
the eBenefits package involving the use of internet and digital television, and with the

software company Northgate IS, who were the main technology provider. The project has
faced some challenges; it was funded for the first three years, but there were concerns
about how it might be sustained at the end of that period. This was solved through
collaboration with the private sector, which took on the ‘intellectual asset’ and with it the
commercial risks. More cohesion within central government would be required for the
project to be fully realised as a unified service covering locally and centrally administered
benefits. As things stand, a fully integrated service is some way off.
Vehicle and Operator Services Agency: E-service for commercial vehicles

There are currently 110,000 businesses and 450,000 vehicles which comprise the
commercial vehicle operator industry. This initiative is designed to enable these users to
carry out a major part of their licensing business with the government on a self-service
basis, giving them access to their data and the ability to amend it at any time. It has also
brought about a transformation in the way that enforcement partners check data and
detect offenders, as well as enabling local residents to view details of licence applications.
This system has replaced an outdated 1980s infrastructure, and entailed the building of
an entirely new business system, new internet sites and content, and integration with a
finance system.
The innovation was driven by the need for greater efficiency as well as the availability
of new technology to perform these functions. The total cost of the system, including
infrastructure, is £9.5 million. It has had a significant impact in many areas, and in
particular has enabled the reduction of 40 staff posts as a result of customers undertaking
transactions themselves. Initial data has been positive, showing that over 50 per cent of
all vehicle transactions are done online, exceeding the target figure of 25 per cent.
Our review of practical public service innovations associated with the knowledge
economy suggests there is much activity, creativity and experimentation. Yet, if the study
of innovative practice is to deliver real and generalisable insights into the processes of
innovation, it must be more detailed. It is for this reason that our progressive focusing on
innovative practice now turns to primary research in the form specific case studies.

3. Case studies
This section presents a series of in-depth case studies of innovative practice. They offer
greater detail on the processes of innovation in the knowledge economy, and thus enable
a deeper analysis of its conditions, drivers and prospects.
Methodology In order to identify appropriate case studies, an initial set of 60+ organisations engaged in
some aspect of public service provision were contacted with a view to participating in this
study.
They were asked to nominate innovations that were:
• New to the organisation.

• Large enough or general enough to appreciably effect the operations or character
of the organisation.
• Sustainable.
• Representative of a change that is of a qualitatively different order to that which
occurs in the course of ‘continuous improvement’.
In focussing on knowledge economy related activities, organisations were offered a

deliberately broad framework within which to identify appropriate innovative practice.
Specifically, they were asked to identify:
‘solutions in process and delivery contexts that make effective use of (or add value
through) knowledge and technology and the knowledge economy ‘intangibles’ that
add value to products and services…Innovations can address questions of strategy
or policy, services or products They can be related to performance improvement,
joined up government or the end-user/customer. They can be based in administrative
systems, IS systems and ICT, web or internet, technology, or human resources.’
While the majority of organisations approached were asked to nominate their own
examples of innovative practice, these were supplemented with additional requests to a
further ten organisations to discuss a specific innovation had been already been identified
in the course of our preliminary research for this study.
In response to our requests, 15 organisations offered to participate in the case study

research undertaken here. Of these, 12 provided details of innovations that met the broad
criteria set out above.

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In order to solicit in-depth qualitative data from participants, semi-structured interviews

were seen as being the most appropriate tool. This method provides a depth of
information through the use of open-ended questions. It allows the respondent to talk
freely about issues and does not constrain their responses. Within the list of topic or
subject areas, the interviewer is free to pursue certain questions in greater depth, to ask
supplementary questions, for clarification and elaboration and to gather data across a
broad spectrum of issues.
The further advantage of the semi-structured interview approach, based on predefined

topic and subject areas, is that it makes interviewing of individuals more systematic and
comprehensive by delimiting the issues to be taken up in the interview. Logical gaps in
the data can be anticipated and closed, while the interviews remain conversational and
situational.
In order to delimit the subject areas to be covered in the course of the interviews, an
interview guide was developed that lists a pre-determined set of questions and issues to
be explored during each interview.
Key questions and topics covered in the guide include:
• Description of innovation
• Timescales, staffing numbers and costs (including unforeseen costs)
• Drivers and origins
• Enablers (internal, external and critical) of the innovation
• Barriers to the success of the innovation
• Impacts
• Dissemination work.
The resulting information from the 12 interviews undertaken in line with the above
methods are incorporated into the case studies below.
Case studies
3.1 Department for Innovation, Universities and Skills
3.2 Microsoft and the Black Country Consortium
3.3 BBC Vision
3.4 South East of England Development Agency

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3.5 H.M. Land Registry

3.6 Competition Commission
3.7 London Connects
3.9 Lancashire Constabulary
3.10 Croydon Primary Care Trust
3.11 Information Commissioner’s Office
3.12 University of Warwick.
3.1 Student Loans Company transformation: The Customer First Programme

Department
for Innovation, Description
Universities The ‘Customer First Programme’ is designed to change the delivery of student finance
and Skills in England. The current system was reviewed in 2005, leading to proposals for major
changes in structure and delivery, based on the findings of the review and other
consultations. One of the main changes is that the Student Loans Company (SLC) will
become solely responsible for assessing and administering grants and loans. Currently,
eligibility is assessed by the 150 local authorities who then pass responsibility for
payment to the SLC. Another major change is that students will apply for financial support
primarily online, making the whole process simpler and faster. The reformed system
will be phased in from next year and by September 2008, applicants for academic year
2009/10 will be able to use an integrated system to apply for financial support.
The main features and advantages of the transformed system include:
• a straightforward, individualised application and assessment process, where the

steps the applicant needs to take are determined through their individual profile;
• a parallel application process for UCAS and student finance, meaning students
can apply for funding alongside applying for a course, and receive earlier
decisions on financial entitlement;
• integration of these two systems to provide data sharing between the two
application processes;
• an online calculator giving individualised information on entitlement and on the
bursaries offered by various Higher Education institutions (to be implemented in
April 2009).

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Furthermore, during the life of the programme better data sharing with the Identity and
Passport Service, will reduce the need for applicants to provide documents; and a
stronger partnership with H.M. Revenue and Customs will improve the process of paying
back loans.
Although the service will be mainly delivered online, it will be supplemented with national
telephone support giving extra guidance to applicants, sponsors, parents and advisers on
using the online system, and dealing with more complex enquiries. Support will also be
available in person for applicants and sponsors who particularly need it.
Timescale
The July 2005 review recommended changes to the existing system. A full report was
delivered in January 2006, with ministerial approval being granted in July 2006. A detailed
plan of implementation was set out during the latter part of 2006.
Currently, the plan is on schedule, with the phased transfer of responsibility from local
authorities to the Student Loans Company due to take place from September 2008. The
transformation is expected to be complete in 2011-2012, after which there will be year on
year continuous improvement
Staff numbers
The project involves 3-4 senior managers and 25 internal or departmental staff. The
number of SLC staff involved is not known at this time.
In addition, an independent consultancy company assisted with establishing a sound

implementation programme.
Costs
The projected total cost of the programme is £40 million. At present, no unforeseen
expenditures have been required. It is anticipated that the transition of authority from local
authorities to the SLC may incur some extra costs, but these will not hinder the success
of the project.

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Drivers
The main driver behind the innovation was the evidence that the service from different
local authorities was unavoidably patchy or inconsistent. Students could not be
guaranteed a uniform, national and reliable service.
Previously, the SLC had provided a central IT system to process the applications received
by local authorities. Building on that, and taking advantage of the increasing propensity
of young people and others to use on-line services (applications to UCAS are almost
completely on-line), the plan is to develop an innovative on-line and integrated approach
to university and student finance application systems. In addition, the innovation will
provide many young people with a positive and accessible first encounter with public
service bureaucracies.
Finally, the innovation has potential to reduce cost. It is expected that approximately £20
million a year (Net Present Value) may be saved.
Origins
This innovation resulted from an internal decision made by the departmental senior staff
that reform was needed. The decision was drawn from the realisation that the existing
service was not working effectively and that, with the SLC (a public body) coming up for a
regular review, there was a clear and timely opportunity for reform and innovation.
Enablers and success factors

Internally, the most important factor was the internal review process and the careful
investigation of students’ and others’ needs which arose from the review.
Externally, there was an opportunity, through the development of on-line services in the
public sector, to apply these to student finance which then called into question the relative
contribution of the local authorities and the SLC. Finally, there was the contribution made
by independent consultants who carried out a commissioned feasibility study.
The critical success factor is likely to be the changes to be achieved by the SLC which
currently provides computer services and makes payments to students. Although these
processes will change considerably, there will be a larger and more substantial change
for the SLC staff who will be required both to manage the entire process and be far more

Case studies
customer-oriented. A radical organisational development of the SLC will be required, as it

will be the main point of enquiry for student.
Effectively, this will call for stakeholder management during the period of the transfer of
work from the local authorities to the SLC and the development of effective ownership of
the process by the SLC.
Barriers
Initially, the single biggest issue was gaining agreement to transfer the budget used by
local authorities to undertake their part of the processing to central government.
There has been some understandable reluctance among local authority finance
managers to agree to the change as it will mean work being taken away from them.
However, many local authority senior managers have taken the view that student finance
is not part of their core business.
A further risk concerns the comparatively long transition period. There will be a gradual
reduction of work for local authorities, so the fear is that skilled and experienced people
may leave before the work has diminished, with the potential for significant reduction of
capacity in local authorities before the end of the transition in 2011-12. To mitigate this
risk, all local authorities have been requested to submit a transition plan and these are
currently being reviewed.
Dissemination
This innovation has been widely publicised among the stakeholders/ practitioners,
specifically the Higher Education institutions and local authorities. However, it has not
yet been publicised to end users. The aim is to avoid confusing applicants who will use
the present systems up to the end of the cycle leading to admission to higher education
in the autumn of 2008. It is envisaged that information can be made available to end
users (students) from August 2008 when the processing for the next cycle will begin, six
months earlier than usual to coincide with the UCAS application cycle. Responsibility for
dissemination rests largely with the SLC, who have sent out consultation groups to talk
with the stakeholders.

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So far, responses from higher education institutions have largely been fairly neutral.
Their major concern is to have tuition fees paid effectively, so from their point of view, any
changes to the system which improve performance is welcomed.
Impacts and achievements

Overall, this innovation will provide a faster, improved and more customer friendly
service to students. It promises concrete improvements in the delivery of services and
the integration of currently disparate processes of delivery. Moreover, it is envisaged that
costs will be reduced by approximately £20 million a year (Net Present Value).
3.2 Partnership with the Black Country Consortium

Microsoft
and the Description
Black Country The Black Country Consortium covers four local authorities and has a 30-year plan for the
Consortium regeneration of the area. The social problems the area currently faces include poverty of
aspiration, poor skills base, poor housing stock, population decline, and a large number of
brownfield sites.
The partnership with Microsoft aims to identify areas where technology could assist in
solving these problems, and has identified three workstreams:
Small business growth – this focuses on specific programmes aimed at engendering

change and awareness. An example is the ‘Netbus’. One reason small businesses give
for lack of growth and IT use is the lack of time for staff training and development. The
Netbus is a bus equipped with technology which tours business parks and industry,
encouraging taster sessions and training, and demonstrating the kinds of technology
available and their uses.
Education – The Consortium has funds of approximately £28 million with which to review
education programmes across the region. This is a less well developed area for Microsoft,
as the projects will go out for tender and so they will have to compete. However, projects
being discussed include an innovative teachers’ program where teachers are trained in
ways to use IT in the classroom. Another project is investigating the ways in which IT can
change the school experience, for example, by giving parents access to technology so

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that by schools using online systems, parents can check their children’s attendance at
school.
Digital Inclusion – This involves working with 130 community centres to encourage
basic IT skills. Over the next three years, the partnership will introduce flagship ICT
programmes designed to improve access to digital technology, drive and training
for all learners in the region. Their initial focus will be on creating a quality learning
environment that opens doors for learners to new social and economic opportunities to
help individuals, communities and businesses achieve their full potential. Outline plans
envisage the creation of personalised learning space for every learner, tailored to meet
the area’s diverse cultural and community needs; monitoring systems to help learning
providers target those most in need of support; ensuring information about health, leisure,
police and other services are made available to more people; and designing a ‘learning
offer’ to encourage take-up.
Microsoft has developed a digital curriculum which consists of a five module basic
training course, which if completed culminates in a qualification. Generally, this is aimed
at the unemployed and low-skilled people. Another project which is currently still under
discussion is the Apprenticeship programme. Eventually, the aim is to integrate the Digital
Inclusion and the Apprenticeship programmes, so that those who learn IT skills can then
be taken on as technology apprentices in small businesses. This is being discussed with
the Learning and Skills Council who would fund the initial costs of the apprenticeship until
the business’s profits increased, at which point the costs would then be transferred to the
business.
It is hoped that the IT training centres will provide people in each of the region’s four
local authority areas with access to technology, as well as training and advice. The new
centres and academies will offer training to around 35,000 people and help improve
employment prospects in the area.
Timescale
Microsoft has been working with the Black Country Consortium for 18 months. The
partnership was formally announced in September 2006, and was initially intended to be
a three-year plan. However, it will in reality be three years from implementation, which
is being rolled out in the next month. It is envisaged that the programs will be rolled out
quickly.

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Staff numbers
The core team at Microsoft consists of a Virtual team of eight people. This partnership is
one of their core objectives; however there are no staff solely dedicated to this project,
all have other roles elsewhere in the company. These personnel in turn bring in different
departments, such as marketing, when necessary, but this is dependent on the needs of
the project.
Costs
The value of Microsoft’s investment in the Consortium is £14 million over three years.
This includes marketing, staff time, implementation and administrative costs, and the
commercial value of the skills training courses, which have a target of 35,000 learners in
the first year.
There have to date been no unforeseen costs to speak of. As the project has developed,
further ideas have been generated by both partners. If the budget is available, then the
ideas can be implemented, but if not then the idea has to be shelved. Generally, if both
partners are keen to carry out a project in addition to the core objectives, then the money
is made available from somewhere to finance it.
Drivers
Microsoft realised that it needed hard evidence for its argument that ICT creates value for,
and encourages the growth of, the knowledge economy. The Black Country Consortium
came to Microsoft with a very compelling economic strategy to develop the knowledge
economy which Microsoft could support, and this encouraged them to enter into the
partnership.
Origins
The project originated when the Black Country Consortium approached Microsoft with an
economic strategy to discuss their possible engagement.

The biggest internal factor, and at times problem, has been Microsoft’s ability to bring
resources and knowledge to bear on a small, grass-roots project. It is typically involved
in large-scale projects, and so it was difficult to get Microsoft to give the same value and
strategic thinking needed for a project that might affect 20 people as opposed to one

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that would reach 20 million. The vision that the Consortium offered assisted Microsoft
to overcome this problem, as it met Microsoft’s belief that technology can add value to
people’s lives.
The most important external factor has been the Consortium’s vision and willingness
to engage in change. Their acceptance of the private sector’s market-based approach,
competitiveness, pace and deadlines, has helped to overcome some of the problems
often faced by local authorities, particularly in relation to bureaucracy and the complexity
of stakeholders that has to be considered. It has allowed the pace to be led by Microsoft
rather than the local authorities, and the Consortium have welcomed this.
The critical factor driving the success of the partnership has been a meeting of minds
over what success looks like and what is needed to achieve it, both within Microsoft and
in the Consortium, including considerable agreement concerning practical solutions.
Barriers
The main obstacle faced was overcoming the organisational culture at Microsoft. This
has slowly been changing, to the extent that the Small Business Team has announced
that they will in future regionalise their marketing activities. This demonstrates that they
recognise the need to understand and target the differing needs of regions in order for
their innovations and projects to be more successful, and meet their users’ particular
demands.
A challenge was also presented by the fact that the different areas within the Consortium
have very different needs reflecting population characteristics, so this has had to be taken
into consideration when planning and implementing projects.
Dissemination
A major PR event took place in February 2007, when the Vice-President of the Unlimited
Potential programme – the umbrella programme which funds all of Microsoft’s community,
charity and corporate social responsibility investment – visited the Consortium to see the
investment in the Digital inclusion project. The project has also been publicised internally
through Microsoft’s internal news channels. Following implementation next year, they
will begin a national marketing campaign when the initial impacts of the projects become
apparent.

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As the project has not been fully implemented yet, it is difficult to assess its impacts.
However, when it is implemented, individuals involved in the projects will be tracked for
three years to see if the interventions have affected their economic activity.
For Microsoft, a key impact of the partnership has been the realisation that
organisationally it is not well equipped for this kind of small, grass-roots project, and so it
needs to rethink its approach to guarantee the success of similar future projects.
Although it has taken longer to implement than had been hoped for, there have been real
successes: in understanding and meeting the requirements of the partnership, bringing
about positive changes internally within Microsoft, and developing grass-roots projects in
response to the needs identified.
3.3 Digital Media Initiative

BBC Vision
Description
The Digital Media Initiative (DMI) is intended to integrate production processes to
facilitate cost effective and easy access to content on a variety of platforms. It is a BBC
wide initiative designed to prepare the organisation for an on-demand digital environment
and to take the BBC into end-to-end digital production. The aim of the DMI is to allow
a piece of original content to be created in a digital form that can be passed through a
production change in the same format. Currently there is enormous variation in workflows
and technologies used in production. Production currently operates as a discrete process
every time a programme is made.
Reflecting consumer desires to be able to access content at all times and places, this
initiative will allow information to be re-used, shared, published and distributed to any
form of media (video and audio). It also enables multiple user access for staff in the BBC
production chain with a view to delivering information on a variety of platforms for end-
users.
Funding for the DMI has been agreed for the mobilisation phase and involves staff from
BBC, Siemens and Deloitte.

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The workstreams of the DMI are:
• Tapeless and Multiplatform: Implementation of tapeless cameras, audio visual

desktop production tools and content management systems for multi platform
working; and exchanging digital content with independent production companies;
post production suppliers and audiences.
• Digital Libraries: Storage and archiving of digital content – both for use during
production (work in progress) and long term archive
• Asset Information Management: infrastructure around metadata (ie the ability to
identify, locate and retrieve content) and organisational restructuring involving
moves of Information and Archives function to Future Media and Technology.
• Business Transformation.
Timescale
The design phase started two years ago. The preparation of the business case began
in the summer of 2006 and was approved in March 2007, with the final design phase
running from then until September 2007. Currently, the developers are identifying
suppliers for key technology and deciding where it will first be deployed. The
implementation process will start in January 2008, and it will take five years to roll out
across all sectors of the BBC.
Staff numbers
The initiative involves three senior managers, one of whom is working on the project full-
time, and approximately 30 other internal staff. Additionally, 12 external staff have been
seconded from Deloitte for a period of one year.
Costs
The total cost of the project, including procurement and implementation, is projected to be
£50 million. However this does not include hidden costs, such as the time of existing staff
members. Some costs are covered by the existing production budget, and some have
been absorbed by the production base which was not initially foreseen. The project has
been steadily coming down in cost.

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Drivers
There were three main drivers for this initiative. Firstly, the project is motivated by a need
to lower costs. Second is the move towards multi-media production and the development
of new technologies, and the imperative to deliver to different devices and different
audiences. Finally, the BBC is under continuous pressure as a public service broadcaster
to maximise its assets for consumers. This initiative offers ease of storage and access to
raw material shot by the BBC (at the licence-payers’ expense), so it can be used again
rather than having to be re-shot from scratch.
Origins
The project emerged as a technological vision from the BBC technology group, Future
Media and Technology, whose recently expanded focus includes search, navigation, and
metadata, on-demand, mobile and the web, including the emerging i-player and web 2.0
initiatives, as well as the content archive.

Internally, the barriers to innovation within the BBC far outweigh the facilitating factors.
‘However, innovation tends to happen because too many creative people are employed
for some good ideas not to get through.’
The most important external factor was market competition which has forced the BBC
to innovate. Additional external factors include communication with the Department for
Culture, Media and Sport, which influences high-level strategy and indirectly impacts
on innovation. Market research and consultation with consumers also takes place, and
research is commissioned from independent policy consultants, although this is not
necessarily acted on. Finally, the development of new technology and media solutions by
private sector firms have a (reactive) impact on innovation strategies.
The factor most critical to the success of the DMI has been the ability to secure the
commitment of both creative and technology departments in the project. Without creative
engagement, the technology department was previously unsuccessful at getting their
ideas accepted and implemented.

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Barriers
Within the BBC, there are several important barriers to successfully implementing
innovations. Firstly, there is little spare money for innovation, as there is an ever-
increasing focus on output. Secondly, the need to work within policy guidelines ensures
a generalised aversion to risk taking (‘there are always more reasons not to do things
than to do them’). Thirdly, there is no real culture of collaboration in the BBC; it is a very
individually orientated, competitive environment. Finally, the organisation struggles to join
up the technological and creative communities.
In terms of this specific initiative, there were enormous barriers to design and
implementation. The largest has been the historic failure of previous production
modernisation projects in the BBC. In addition, it has been difficult to get the attention of
senior managers, and some very senior managers are now engaging with the project in
order to change the project specifications to suit their own strategic agendas.
There has also been reluctance to embrace new technologies, as much of this technology
comes from the consumer market, leading many broadcast media professionals to be
wary of adopting it. Similarly, the current work culture means that people have been
reluctant to embrace new ways of working. It has also been difficult to free up resources
from existing activities, as well as to get the right people with the right skills to develop the
project.
Implementation must take place in phases, both in order to avoid disruption and for cost
effectiveness. This means arguments are ongoing about which areas should benefit first,
and whether implementation should focus on a thin but broad approach, or a deep but
narrow one.
Dissemination
The initiative has largely been publicised by word of mouth within the organisation.
Presentations have been held internally, in addition to selective workshops for staff.
Response has generally been positive, although at times frustration has been expressed
over the long time period involved. There is some indication that there is a significant lack
of good communicators in the BBC at all levels of the organisation, but particularly at the
level of senior management.

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This project is expected to have a significant impact on reducing costs, and is anticipated
to bring about a direct cost saving of five per cent each year. The production base is
being targeted to reduce its costs by 25 per cent over the next five years, and this project
is critical to realising that ambition.
It is also expected to have a huge impact on work culture within the BBC, as it demands
a collaborative, multi-skilled approach. This represents a significant challenge to the
existing work culture, and as such is a potential barrier to the long-term success of the
project.
It is hoped that the scheme will improve the BBC’s responsiveness and flexibility, as
well as offering new services to customers and improving the way in which services are
delivered. The number of available services will increase, and they will be delivered more
simply and cheaply.
The project has so far been successful, and if it continues to be so will be a major
achievement, as the first successful roll out of a pan-BBC modernisation project.
3.4 SEEDA Enterprise Hub Networks

South East
of England Description
Development The Enterprise Hub Network, supported by SEEDA (South East of England Development
Agency Agency), was established in 2001 to help technology – and knowledge-based companies
develop innovative ideas. It is designed to help promote young businesses, and develop
raw ideas into sustainable business propositions. The Network provides links between
knowledge ‘hubs’, each with a specific area of expertise (eg Food Hub and Aerospace
Hub), and each run by directors with experience in the development of growing
entrepreneurial businesses. Each Hub can thus offer specialist advice on challenges
faced by developing businesses, together with sector-specific knowledge. They can also
channel companies to specialist business services operating in the area.
The Hubs operate in 20 locations in the South East and are joined up in a network, which
manages itself and is facilitated by SEEDA. There are 20 Hub directors who run the

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projects. Each Hub receives £85,000 a year from SEEDA, which covers the costs of the
office, the director’s salary, and all other costs relating to project implementation. SEEDA
effectively facilitates knowledge in the network needed to develop ideas, best practice
and expertise.
The Network offers support primarily to businesses in early stages. The criteria for
qualifying for support are that companies are aiming to market a technological or
knowledge-based innovation, and that they are potentially marketing it at least at the
national, but preferably international, level. Support is tailored to the individual company,
rather than having a fixed structure. Services provided by the Hubs include: business
planning; mentoring; assessment of readiness for investment or for a funding application;
access to finance; intellectual property advice; access to workspace and other service
providers; and opportunities to collaborate and share ideas with other members of the
Network. The Network has the advantage of being able to utilise expertise from a range
of sectors, and its services are currently used by over 1000 businesses in the South East.
Since it was established, the Enterprise Hub Network has helped client companies raise
over £18 million of growth funding.
The innovation has kept costs low and has developed good economies of scale. It is
much more cost effective than traditional incubation projects which are very expensive to
run and maintain. SEEDA contracts experts at a regional level who then operate across
the hubs as needed. This way of operating means that they have a significant degree of
intellectual property advice available at a reasonably low cost. This has, it is estimated,
cut such costs by at least 70%.
The project is run on a similar basis to an open source model: the Hub directors are
expected to meet targets, but the ways in which they do this are not uniform. They have
also set their own targets which differ somewhat from central government targets and
key performance indicators, and are focused on answering the question: how are we
developing wealth?
The Hub teams are non-hierarchical. There are no titles other than director, all receive the
same core funding, all results are published in a transparent fashion, and they engage in
yearly team-building exercises. The project considers the Hub directors to be sources of
innovation in themselves, through the knowledge and expertise that they offer.

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Timescale
The Network took four years to establish, and has now been in operation for seven years.
After an investigation of best practice worldwide, it was recognised that hub practices
help businesses grow intensively but that they need to drive down the costs to suit their
own requirements and resources.
It took time to persuade SEEDA and the local partners of the efficacy of this project. As
well as this, the local partners had to be persuaded of the potential for local ownership
and that this would not be a ‘one size fits all’ approach, as they had expressed concerns
that it would not meet local needs. These partners now have a significant degree of local
ownership.
Staff numbers
There are six senior managers involved in the operation of the Network, as well as staff
in at least two other departments whose task it is to gather information to be fed into the
Hub project. 20 Hub directors are also permanently employed, one of whom is contracted
to manage the project, although has no line manager control over the other teams.
Costs
The Network costs approximately £2.5 million a year to run. Initially, there was no real
budget for implementing the project, and it had to be ‘scraped together’ from a range of
sources.
The project always comes in on budget every year. Beyond the initial £85,000, Hubs
have to solve their own financial problems if they encounter them, and will not be further
financed by SEEDA. This is an important principle in ensuring the long-term sustainability
of the project, as only a relatively small amount of funding is guaranteed every year by
SEEDA.
Drivers
Lack of money was the primary factor driving the project: the twin initial objectives were
to provide a large-scale incubation project at a relatively low cost. Funding resources to
support businesses and economic growth were scarce.

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Origins
The innovation originated from within the organisation, which understood the need for an
early stage service for entrepreneurs and so acted to develop this.

Crucially, SEEDA allowed those developing the Network the space and time to implement
it successfully, and allowed a degree of experimentation and trial and error development
to take place in order for the project to establish itself and expand. External factors that
were significant to the project’s success included the existence of a self-starting culture
and the presence of a skilled business base to draw upon. There is also some suggestion
that the limited finances available acted to assist innovation in this area, as too much
funding may at times stifle innovation and the development of novel ways of thinking
and working. Collaboration with a number of strategic partners was vital in this initiative,
including those with universities, the Patent Office, and Library House. The most critical
factors were identified as the individual actors operating the system, in particular the
Hub Directors, who are a source of knowledge, innovation and creativity, and the SEEDA
managers who facilitate their work.
Barriers
Obstacles faced in the implementation of this scheme include the initial reluctance within
the organisation and of local partners to embrace this project, as well as difficulties in
gaining access to funds.
Additionally, there were not enough human resources to implement it fully at the
beginning, so for example there was not always the right kind of project manager to
complete certain tasks. This has been an ongoing concern dealt with by consciously
looking for the right kinds of people able to implement the project in the most effective
and efficient way.
Dissemination
As well as being publicised on the SEEDA website, there is also a ‘Hub’ magazine. This
was initially intended to justify actions for managers, but it has now become a source
of information for partners, businesses, and managers. The Network is also involved in
the North American Incubation Association, a world forum for best practice. National and
regional audits have been conducted to understand and evaluate the work of the Network

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and the Hubs and what it is they aim to achieve. Fundamentally, their approach can be
described as interactive, in that they are willing to learn from others anywhere in the
world.

The main impact of the scheme is that it has enabled more effective use to be made of
resources, and helped achieve value for money.
It is too early to estimate the impact on economic growth in the region; they need to scale
up in terms of the numbers of businesses they work with, given the potential market of
7,000, and to work with a wider variety of business. However, the evidence suggests that
the project has successfully achieved its initial twin objectives: a large-scale incubation
project at a relatively low cost.
3.5 e-conveyancing Programme

H.M. Land
Registry Description
The Land Registry is responsible for recording transfers of legal title for leasehold or
freehold property from one owner to another. Its e-conveyancing programme is intended
to ‘make conveyancing easier for all’ and in particular, to develop an electronic system of
conveyancing that makes buying and selling houses easier, quicker and more transparent
for the general public, conveyancing professionals, and other parties involved in the
process.
Specific features of the programme are intended to:
• Allow authorised parties involved in a conveyancing transaction to exchange

information securely and reliably with each other and the Land Registry.
• Enable the electronic integration of the ownership registration and conveyancing
processes.
• Ensure that up-to-date and accurate information is available on the progress of
all linked conveyancing transactions.

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Practical examples of this programme include Chain Matrix TM which is currently being
piloted in three regions and which should be particularly beneficial for the public. It is
intended to remove some of the frustrations inherent in being in a chain of buyers, much
of which results from poor communication and the unavoidable consequences of all
transactions moving at the pace of the slowest in the chain. The feature is essentially a
secure electronic notice board, open to both lawyers and clients, which shows the key
stages each transaction has reached in a chain. The pilot began at the end of March and
will continue for approximately six months or longer if justified by demand. It will be rolled
out next year.
Another feature is the Electronic Funds Transfer. This is arguably one of the most
important features of the project. It will enable payments throughout a chain to be made
simultaneously and irrevocably, with greater efficiency and certainty than at present and
will enable buyers to know the date and time when the keys to their new home will be
released. The tender is currently in process for a service provider to deliver this service.
Timescale
This project has had a relatively long timescale, largely because the conveyancing
process is not owned by any one government agency or stakeholder in particular.
Instead, there are a number of stakeholders involved, and so there has had to be
extensive consultation with these in order to deliver a successful plan.
The consultation process began informally in 2000, and formally in 2002. The design
and implementation phase began in 2005. The complete roll-out of the project, of which
there are a number of features, will take place over the next few years, with completion
envisaged in 2010-11. While participation will initially be a voluntary process, it will then
be enacted in legislation to make it compulsory.
Staff numbers
Approximately 200 staff are currently involved in this scheme.
Costs
The projected costs for this initiative are approximately £300 million in total.

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There have been unforeseen costs, including the development of the new fees system,
which has proved to be much more complex than expected, requiring consultants and
outside experts to be brought in to help. In addition, the need to ensure that best practice
is followed at all times has increased the administrative costs at times.
Drivers
A consultation paper in 1998 raised the legal prospect of electronic conveyancing. From
this, the Land Registry recognised the problems inherent in the current process, and
it became part of the government’s agenda to improve the experiences of both home
buyers and sellers. This process will greatly benefit the public through its potential for
increased transparency and openness. The project has only been possible through the
availability of new technologies.
Origins
The scheme originated from a joint consultation paper by the Land Registry and the Law
Commission. It was then adopted by government, who put the Land Registry in the lead.

The Land Registry enjoys a significant degree of autonomy, which makes it easier to get
reform processes such as this one off the ground. In terms of financing the scheme, some
money has come from the Treasury to support this innovation, but most of the funding
comes directly from the Land Registry’s own budgets.
Externally, the support of government ministers was crucial to the success of the project.
The critical factor in accounting for its success is the ability to secure the support of
external stakeholders, particularly those who were reluctant to embrace the process.
Agreement has been reached with all major stakeholder representative bodies through
an extensive period of consultation. Government support, without the backing of external
stakeholders, would have been insufficient for successful delivery of the innovation.
Barriers
Initially there was a good deal of reluctance on the part of some stakeholders, notably
some in the legal profession, to support the process. There has also been some internal
reluctance to change a process which already works well. The time it takes to surmount
legal, financial and administrative obstacles has been frustrating at times. The legal

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elements are challenging because the legislation must be written in a way that accurately
interprets/predicts what the reality will be, and it is important it should not open up
unexpected possibilities/loopholes.
Dissemination
This innovation has been publicised in a number of ways. In addition to a recent formal
launch for the pilot Chain Matrix, the project has been disseminated through informal
and formal groups, such as business user groups and government departments, and
in the specialist press (especially those aimed at lawyers and lenders), and in national
newspaper reports.

Once fully implemented, the initiative is expected to reduce costs for all users. It is hoped
that it will introduce a less stressful and potentially faster process for citizens which is
more transparent than existing systems, as well as being more streamlined and efficient,
and thus bringing financial and other benefits to all users.
It is expected that it will highlight problems in relation to registration of ownership much

earlier than has previously been the case, so that any problems can be rectified prior to
receiving the final documentation.
In terms of the time it has taken to achieve this, there have been some frustrations, and
it would have been better if it could have been established faster. However, it has the
potential to be very successful, and it would be politically disastrous if the process were
implemented too quickly and was then to fail.
3.6 KnowledgePool Training Provision

Competition
Commission Description
The Competition Commission (CC) is an independent public body which conducts in-
depth inquiries into mergers, markets and the regulation of the major regulated industries.
The CC has appointed specialist training provider KnowledgePool to manage the majority
of its training activity. Services that the CC has acquired from KnowledgePool include:

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• A ‘micro-site’ connected to CC’s intranet covering all areas of administration of

training courses, including booking, authorisation and scheduling and completion
of (online) evaluations;
• Analysis of training needs within the organisation, leading to a tailored ‘Portfolio’
of courses, including IT, management skills and soft skills;
• An accredited Management Development Programme, designed by
KnowledgePool together with the CC;
• Online skills assessment, including self-assessment facilities, for use in both
recruitment and ongoing staff development;
• Development and delivery of specialist courses as they are required through
KnowledgePool’s associate trainers;
• A comprehensive system for evaluating courses through monthly reports which
take into account attendance, cost (including wastage), participant evaluations
and observed results.
KnowledgePool’s booking and training administration system is called LiveBooker which

offers an online learning account that manages the request, authorisation and evaluation
of training for individual staff. KnowledgePool currently has 360 contracted training
providers some of which have live feeds into LiveBooker. The Competition Commission
is provided with an online catalogue giving access to different suppliers of training
courses, a booking and confirmation facility, an electronic authorisation facility and
online evaluation forms. In addition, it has a preferment system for courses. This means
that information and requests can be managed effectively for the provision of in-house
training courses. It also means that when a staff member inputs a request for a particular
course, it lists first the courses which best meet the specific needs of the Competition
Commission.
LiveBooker can be used both for externally provided courses and internal events such as
training days. For the delegate booking a place, LiveBooker is easy to use and enables
them to access the courses most suited to their needs. CC staff use the online catalogue,
which links them to the LiveBooker micro-site. Their choice of course is assisted by
information on topic, location, price and a rating based on previous delegate evaluations.
Managers and the HR team can also use the system to propose particular courses to
staff that they consider best suit their needs by ‘inviting’ them via the system.

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Working in partnership with the CC, KnowledgePool has developed specific tools for
their organisation which can then be rolled-out to other clients. The programme has
advantages for the organisation since they will receive one monthly itemised bill from
KnowledgePool rather than around five invoices per day from various training providers.
This is both simpler to keep track of and more cost-efficient, resulting in savings across
the organisation. The new system will also mean that managers and staff have fuller
and more tailored information about training than previously. KnowledgePool’s associate
trainers provide the added benefit of a flexible service available as and when required
and with a broad range of expertise.
KnowledgePool provides both learning consultancy and supplier management, giving us

access to a wide range of expertise. When the CC develops in-house training courses,
specialist trainers from KnowledgePool aid in both the development and delivery of
material so there is a good balance between the important content and method of delivery
to maximise learning.
The aim of the innovation is to contract out a large amount of the CC’s learning and
development function in a way that uses an integrated learning and online technology
approach – to develop a ‘managed service’. It is also intended to generate efficiency
savings for HR.
Timescale
It has taken one year to develop the project and start the delivery of services. From
autumn of 2005, it took a period of six months to develop the tender, and the contract was
awarded to KnowledgePool in April 2006.
Staff numbers
One senior manager and three other internal staff members are involved in the
implementation of the scheme. A greater number of KnowledgePool staff have been
involved – up to 12 at different times.
Costs
The introduction of this initiative has cost an additional £7,000, so that the total cost of
the project, including the training which would have taken place anyway, was £141,000.
This figure does not include the costs of existing staff. Some costs arose from unforeseen

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eventualities concerning continuing work with existing suppliers, and were responded to
‘appropriately as they occurred’.
Drivers
This project began as part of an efficiency project in the procurement area and also
resulted from a mismatch between the number of HR staff and the high demand for
Learning and Development after a reduction in the HR team..
Origins
The foundations of the project were largely in-house, as it originated with the Learning
and Development team (on the suggestion of a new senior manager), and through
conversations with the training industry about what was available in the market.

Internally, this project dovetailed with other agendas, notably, the efficiency agenda.
The organisation funded extra support for the development of the tender by bringing in
a consultant to assist the then Head of L&D with this process. Additionally, supportive
leadership played an important role in the development of the initiative. Employees were
given the trust in their competence to make relevant decisions for the organisation and to
develop this project in the way they thought most effective, and there was also evidence
of a commitment amongst senior managers to make this innovation happen. Externally,
the most important factor behind the project’s success was the development of solutions
with industry training suppliers.
Barriers
There were several external constraints on innovation in this case. First was the
existence of a ‘flooded’ market, evidenced by the fact the CC received 27 expressions of
interest prior to the full tendering. Procurement rules also acted to constrain innovation,
as the project tender was subject to, for example, OJEU (Official Journal of the European
Union) tender guidelines.
There were also significant difficulties in getting private sector organisations to

understand the concept and nature of ‘partnership’. More used to customer/client
relationships, many organisations struggled to understand the partnership relationship
wanted by the CC. There was a feeling among some CC staff that the programme as

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developed represented a missed opportunity for not working with other public sector
organisations.
There has been some impatience with the innovation among staff, partly because it gives
them another business system to work with, but also because of teething problems with
its implementation. So far, there has not been significant understanding or adoption of the
system. Neither has it achieved a big shift in getting people to take responsibility for their
own learning, which was one of its aims; this may, in part, reflect a resistive work culture.
Dissemination
As well as issuing a press release about the project, KnowledgePool have also made
presentations to staff at all levels. There is also an internal CC weekly bulletin containing
relevant information.

The LiveBooker initiative has significantly streamlined processes. It has enabled far more
effective use to be made of resources, as well as developing new resources for training
provision and information management. It has also triggered a rethink in the philosophy
behind Learning and Development provision offered to staff.
Now that the system is up and running, it is expected that there will be a much higher
quality information management, allowing targeted delivery of services. It has delivered
benefits to other teams within the organisation (eg procurement) as well as achieving a
quicker response to request to deliver training. It has also made efficiency savings for
HR, for example reducing the number of invoices received and reducing the number of
suppliers and contacts the team routinely have contact with and brief on the CC’s work.
The ability to move from request to delivery of training provision is significantly improved.

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3.7 London Public Services Network (LPSN)

London
Connects Description
The London Public Services Network (LPSN), led by London Connects with support from
the London Centre of Excellence, aims to provide a common ICT infrastructure for public
services in Greater London It seeks to establish a data network for the specific use of
London Boroughs, with gateways to health and to the Government Connect network. Its
longer-term aim is to provide a framework for the delivery of ‘shared services’ including
front and back office services and the provision of data centres.
LPSN operates through an extranet that has been added to the London Grid for Learning,
an already proven means by which the majority of boroughs are networked. Plans for the
project began two years ago and 15 boroughs are now connected to the LPSN, with a
further 11 committed to joining in the near future. As well as connecting the boroughs to
each other, LPSN will provide access to the Government Connect network, GCSx and to
the NHS data network, N3. The boroughs of Barking and Dagenham and Greenwich are
soon to complete their connection to N3, paving the way for all 33 London boroughs to do
the same.
LPSN has a number of benefits for Local Authorities as well as for citizens. Shared
services will mean substantial savings for boroughs and will enable collaboration
between authorities and with the NHS and Central Government. The connections
with N3, in particular, will make it easier for social care staff to share information with
primary care service providers, such as GP services and clinics. Importantly, this should
improve information sharing in the area of children’s service, addressing one of the key
failings identified by the Laming Report in the death of Victoria Climbie. The improved
connections facilitated by the Network will assist boroughs in meeting a number of
policy objectives, such as: the Transformational Government agenda; Local Area
Agreements; Single Assessments for Residents; Shared Services. It will also deliver
improved resilience in network provision and enable more secure and efficient sharing of
information between public service organisations.
Timescale
A great deal of preparation time was needed for this innovation prior to its launch. This
involved a two-year long effort to establish a viable gateway design, including governance

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and code of connection, with NHS’ N3 network. However, the origins of a co-ordinated
shared service provision lie in efforts by London Boroughs to get the e-Government
agenda off the ground in the late 1990s.
The infrastructure on which the LPSN is delivered is that established through earlier
collaborative effort involving all 33 London Boroughs in the London Grid for Learning
which, since 2004, has provided a filtered broadband connection, network services, a
common learning platform, online content and support communities for all schools across
London.
Staff numbers
Two part-time staff perform central co-ordination, development and project management
functions. There are additional staffing resources required from stakeholders for project
boards, advisory boards and for running the proof of concept pilots.
Other staff resources are drawn from Synetrix, the commercial supplier of the London
Grid for Learning and security consultants.
Costs
The total cost of the scheme is approximately £1.5 million. Included in this sum are the
subscribing costs payable by individual boroughs for access to LPSN and setting up the
N3 and GCSx gateways.
Unforeseen costs may include newly-generated expectations of more innovations in the

future, as well as a long-term expectation that LPSN will deliver a platform for shared
services.
Drivers
The drivers of the LPSN have changed over time.
Initially, pressure for joined up health and social care provision for adults came in the form
of the Single Assessment Process (SAP). The aim of the SAP is to ensure that adults who
have care needs are assessed thoroughly and accurately, but without procedures being
needlessly duplicated by different agencies.

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While initial pressures emanating from the SAP framework have dissipated somewhat,
further pressure has arisen from the need for improved sharing of information about
children. In particular, the Common Assessment Framework (CAF) is a key part of
delivering frontline services that are integrated and focused around the needs of children
and young people.
Other drivers included the potential to derive efficiencies from shared services, and cost
and risk sharing that the LPSN allows.
Origins
There is an established history of discussions amongst Local Authorities in West
London, with six authorities combining to form the West London Alliance. Similarly, a
North East London partnership comprising seven authorities has explored the potential
of collaborative ventures. These authorities acted as ‘champions’ for the further
development of a pan-London collaboration in the form of LPSN.

Internally, success was helped by the fact that London Connects is a small and agile
organisation that is supported by the boroughs who are active stakeholders. Stakeholders
such as Sir Steve Bullock (Mayor of Lewisham and Chair of London Connects), London
Borough Chief Executives, Heads of IT, and representatives from other organisations
including Greater London Authority all acted as ‘champions’ for the LPSN innovation,
assisting its development and implementation. Externally, co-operation with central
government, particularly the Department of Communities and Local Government, via
Government Connect, was helpful in securing the project’s success. The critical factor
however was the active engagement and backing of the individual boroughs.
Barriers
Having to deal with 33 independent boroughs represented a challenge, as gaining
agreement from this diverse set of partner organisations requires the long-term building of
trust.
Dissemination
Publicity for this innovation has been low-key, and has been conducted largely through
public service organisations and stakeholders. Additionally, an annual conference

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attended by 500 representatives from interested and partner organisations provides

additional information and dissemination opportunities. .
More work is needed by London Connect to disseminate information on the innovation to

third sector organisations involved in social and health care, such as providers of social
care and housing associations. There is also the question of how widely the information
should be disseminated, given government commitments to expanding voluntary sector
involvement in social and health care provision.

Initial estimates of financial benefits suggest that the N3 gateway will provide London-
wide savings of £160,000 over a three year period. For each London borough, the
benefits from the use of LPSN for shared service provision in the administration of
housing benefits alone are estimated to be £95,000 (cashable) and £15,000 (non-
cashable).
In terms of delivery milestones, the project is on time; the initial targets for getting
boroughs to commit to joining have been met, and the N3 gateway is now operational.
The intention is to have the Government Connect gateway (GCSx) operational later this
year.

Liverpool
City Council Description
and BT Liverpool Direct Limited (LDL) is the joint venture company formed in 2001 through a
partnership between Liverpool City Council and BT. Prior to this innovation, Liverpool was
seen as one of Britain’s worst performing local authorities in terms of service quality, yet
it charged the highest council tax in the country. It was stated that factors contributing to
this poor service provision included ‘silo-ed’ thinking, reliance outdated technology and
a lack of investment and capacity. The council’s solution was to enter into a partnership
with BT to form Liverpool Direct, a joint venture company which is 80.1 per cent owned
by BT and 19.9 per cent owned by the city council. A total of around 800 personnel were
seconded from the two organisations to the newly formed LDL.

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The joint venture company is an innovative way of bringing communications skills

and investment from the private sector to a local authority. The council, BT and LDL
developed plans for dramatic service improvement and significant cost savings together.
LDL accepts the commercial risks of implementation, cost of sales and any under
performing businesses and therefore the city council is not liable if the company incurs
any future financial losses. Profits are also shared between BT and the council.
The main functions carried out by LDL fall within four main areas of service provision;
Information and Communications Technology infrastructure. This been overhauled,
bringing together previously separate teams into a single, central service. In revenues
and benefits, a new software system has been deployed and any new document
management system and workflow introduced significantly. Customer contact has
benefited from the formation of a new customer contact centre, designed to be the first
port of call for service inquiries, dealing with around 200,000 calls a month and aiming to
handle 80 per cent of the council’s front-line services. And finally, the human resources
and payroll system has been revolutionised with the new ICT system, ways of working,
self service (eg by the introduction of a staff intranet to deal with employee queries and
problems).
LDL is now exploiting its economies of scale and the intellectual assets it has generated
to sell-on platform services to third parties. The ‘shared platform’ strategy seeks to
widen applicability of existing platforms ((eg ICT systems, business systems, contact
centre, technologies, services and staff) to customers with similar requirement in the
commercial marketplace. Potential customers already include social enterprises,
voluntary organisation, schools/academies as well as other local authorities and central
government departments and agencies.
Recent shared platform projects include:
• DEFRA’S Avian flu helpline, providing a day-to-day contact centre (Helpline), but
also with increased capacity available at times of emergency such as the recent
Avian Flu outbreak in January 2007. Also the Defra ‘Passport for Pets’ Helpline.
• Provision of managed high speed ICT network for Stockport Schools.
• Website development, traffic management and hosting for the Amateur Boxing
Association of England.

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• End to end service delivery of a licensing and permission business for the Home
Office.
Timescale
1999, Liverpool City Council identified requirements for significant business
improvements and substantial financial investment in order to support the radical
transformation of its businesses.
To facilitate this vision, in July 2001, Liverpool City Council formed a joint venture with
British Telecom and created Liverpool Direct Limited (LDL). Essentially, it was envisaged
that the partnership would provide a vehicle for regenerating identified council services,
transforming them from old, outdated business processes and systems into a 21st century
customer-focused operation. First phase included ICT and Contact Centre.
The whole HR and Payroll function was migrated to Liverpool Direct Limited in November
2001. In December 2001 the Revenue and Benefits Service followed.
Now that Liverpool Direct is well-established, the new opportunities to exploit existing
infrastructure and IP involves a constant, ongoing search for new opportunities.
Staff numbers
20 people now work directly on developing business opportunities for exploitation
of shared platforms. Up to 50 more are involved in work related to shared platforms
including senior managers and heads of service..
Costs
£50 million has been invested in the business over six years. This relates the introduction
of a number ICT platforms and change management. This work has also allowed the
expansion of platforms to other services and users. This investment formed part of the
original contract. The organisation has ensured that it developed a scaleability solution
beyond its immediate requirement at the time of any particular project. This is an ongoing
process that requires continuing investment.

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Drivers
The main drivers were threefold. Firstly, there was a need to exploit the commercial
potential of platforms already created. Secondly was the requirement to develop a
sustainable business in LDL. And finally, there was a need to protect and grow existing
employment opportunities in the face of rapid and constant technological change. Here,
LDL’s is increasingly focussed on business growth as a motor for expanding employment
opportunities in the city and wider region.
Origins
LDL developed as a business partnership between Liverpool City Council and BT.

The most important internal factors to the success of this initiative are the people. ‘There
is a culture of innovation, ownership, and performance excellence’ – without which such
innovation could not take place. The capability of BT in terms of supplier management,
resources and specialist capability cannot be under estimated.
Externally, cooperation with central government departments and other local authorities
has played a vital role. The drive for efficiency in the marketplace, as well as the potential
to exploit commercial opportunities were also important. Cross-sector collaboration
was crucial in enabling the development of successful solutions with private, public and
voluntary sector bodies.
Barriers
Once the contract for LDL was secured, significant organisational consolidation was
enacted requiring the integration of a large number of individual business units (eg 12 ICT
services, 11 HR services) each with its own operating procedures, processes and supplier
relationships. Culturally the ability to join services/share knowledge presented a challenge
to the organisation. This was managed through a corporate change management process
and supported by an effective 360 degree communication strategy.
In respect of the ‘shared service agenda’, although the logic of the business model
is strong, there seems to be some resistance to it in the wider marketplace. Public
authorities are often very keen on the idea of shared service provision using common
platforms but are much more inclined to want to provide those platforms themselves (for

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others to share) rather than receiving them from others. This is perhaps both a political
and a managerial issue, partly emerging from cultures in organisations that perhaps
prefer a degree of control over infrastructure, strategy, and organisation of service
provision.
Dissemination
This innovative approach has been nominated and received many awards. It is profiled
on the internet. Business reputation is enhanced through face-to-face contact and visits.
These organised visits take place every week with companies/organisations visiting
Liverpool Direct from all over the world. Additionally, a variety of business to business
sales channels are utilised.

The overhaul of information and communications technology infrastructure has enabled
better information sharing, and allowed for efficiency and modernisation programmes to
be successfully implemented. Each service area has improved dramatically since 2001.
For example:
• Revenues and Benefits is now CPA 4.

• Contact Centre meets and exceeds all Varney Recommendation and is CCA
Accredited.
• HRP has a fully managed self service operation and benefited from a 50%
reduction in headcount 2000 -2007.
• ICT has a fully deployed disaster recovery model, full business continuity (eg
dual data centres) and recent winner of the ‘Presidents Award’ by the B.C.S.
• Payroll giving (Silver) is about to be audited for ISO9000, ISO14000 and ISO
27000.
• Other accreditations include; c2e (Gold), IIP, Investors in Excellence, IIP
(Recruitment and Selection), CRE Level 4, IIP (Investors in Leadership).
In the first five years of its contracted period of provision, Liverpool Direct Limited has
supported and enabled a reduction in the council’s cost base of more than £100 million,
and helped to reduce its staff numbers from 19,500 to less than 13,500. The council’s
performance has significantly improved and levels of service provision have increased,
and according to Audit Commission performance indicators, 70 per cent of Liverpool’s key
services are now in the upper quartile of the industry standard.

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3.9 Technology for Policing

Lancashire
Constabulary Description
In 2006 Lancashire Constabulary piloted a new technology project enabling officers
to spend an additional hour of each shift out of the station and in the community. 330
officers were supplied with PDAs and in-vehicle computers linked to local police systems,
the Police National Computer (PNC) and Automatic Number Plate Recognition (ANPC).
Making use of dynamic data systems, officers can enter data, access information
including photographic records, and conduct automatic PNC vehicle checks.
Prior to the introduction of the scheme, officers had to return to their station to undertake
this research and to log information using desktop computers. Concern was raised that
the completion of these tasks was encroaching on police time, restricting the hours
available for community work. As well as increasing the time police officers can spend
on the streets by an extra hour, this immediate inputting of data ensures that the central
system is continually kept up-to-date, and so it allows better monitoring, responses and
tasking by supervising officers. As a result of the success of the pilot scheme, the system
has since been more widely implemented, with over 1500 officers now having access to
it.
The innovation uses a combination of two networks which are fully integrated. The GPRS
network is used for the hand-held devices (PDAs) for officers on the beat which allows
input and access to data. The Airwave network is used for the in-vehicle system and is a
dedicated police radio network. This system allows deployment of officers in response to
a situation via the in-vehicle screen without the need for voice communication and can
provide fuller, more accurate information for officers. The two networks effectively provide
different routes of access to a main storage database. They also offer a better quality
of information inputted, as there is less room for the mistakes of verbal communication
(‘Chinese whispers’). The rapid transferral of data also means that alerts can go out more
quickly and with more information than is the case if the police officers have to return to
the station first to file reports.
The innovation addresses two core needs for the police force: increased visibility and
increased effectiveness of officers on the streets. One direct benefit of the project is
that increased police presence in the community engenders greater feelings of safety

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and security among the general public, and improves relations between the force and
the community. Moreover, there are significant benefits for police access to information.
The new system means that officers have access to more up-to-date data which can
be retrieved instantaneously. This, along with the speed at which the system responds
(7 seconds for data and 15 seconds for photographs), has increased efficiency and
improved the process of identity checking.
This has been particularly useful for ‘Missing From Homes’ calls. Another scheme
recently piloted by Lancashire police allows children’s homes to enter data and
photographs of missing children directly and securely into police systems, with mobile
technology enabling alerts to be sent to all officers in the given area within seconds, an
exchange of information that previously would have taken hours. The mobility of access
to information also means that more senior officers can get out of the station and become
more active, both in terms of their own policing, but also in terms of supervising and
teaching younger, more inexperienced officers.
Timescale
This initiative has taken approximately two and a half years to develop. The technical
testing process took two to three months; the concept was then redesigned with
commercial partners once the technical testing had revealed flaws in design and delivery.
After a further two to three months spent on re-testing the system, it was piloted in one
division comprising 400 – 500 officers, and is now being rolled out across the force, which
will be complete in approximately two months.
Staff numbers
A core team of six staff, plus another six operational police officers are actively involved in
the implementation of this project.
Costs
The scheme cost a total of £800,000 to design and implement these first stages. There
have been a number of unforeseen costs, mostly concerning technical devices and
the cost of using networks. There was no initial clear pathway to an end product, as it
required a significant degree of trailing and testing. However, no issues have been raised
in respect of this from senior management, who have been supportive of the innovation
and continued to resource it.

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Drivers
A key factor driving this initiative were the possibilities offered by the development of new
technologies. In addition to this, there was increasing demand by the public for greater
visibility and effectiveness of police, and this system enables this to be realised without
employing more officers, which cannot be done due to budgetary restrictions.
Origins
The initial drive for this project came from the ICT team in the Lancashire Constabulary,
which was then developed in partnership with suppliers for technical solutions.

Internally, the Lancashire Constabulary ICT team had already developed and
implemented new voice systems, and so the move to data systems was effectively a spin-
off from the existing voice devices. There is a very strong ICT development team which
enabled this innovation, and they have very good relationships with working officers in
the force which meant that they had a good understanding of the practical demands and
criteria for success. Importantly, funds were made available for the development of the
project.
Externally, the collaboration with the suppliers of the Airwave network has been very
important. They have worked to develop this system which has since been offered up to
other forces.
The critical factor behind the project’s successful implementation was the sheer
determination to manage and overcome the complexity of competing requirements.
It has required consultation with suppliers, with police officers, as well as having to
meet stringent requirements for security. (One innovative way of managing the security
demands of the project has been to ensure that no data is stored on PDAs. Once a data
transaction has been completed, there is no record of it, in case of loss or damage to the
device).
Barriers
During the technical testing period, some officers experienced a degree of frustration
when the devices did not work reliably. This led to delays in getting the testing
information, as the unpredictability of the devices discouraged officers from using them.

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There were also scalability problems at first, as well as concerns over the security
demands. All of these problems have been resolved satisfactorily and officers report
being very happy with the systems now in use.
Dissemination
This innovation won a Guardian Public Sector Award, and was featured in the Police
Review. There have been a significant number of visitors expressing interest in the
project, with other forces adopting similar practices. Responses from all involved with the
scheme have been largely positive.

Although this initiative has not reduced the costs of business, it was never intended to do
so, and there was no pressure to make this innovation a cost-cutting one.
It has created new ways of carrying out police duties in areas relating to information
inputting, access, management and police response mechanisms. It has also led to a
number of spin-off projects which would not have happened otherwise. These include
ways of managing information in partnership with third parties, such as children’s homes
and action taken to find missing children, action in relation to suspicious vehicles, and
national monitoring functions for car registration.
The speed of data transferral means that alerts can be sent out far more rapidly and with
more detailed information than before; data transmission can take seconds, compared
to processes which previously might have taken hours. As a result, it has improved the
responsiveness and flexibility of the police force in providing a service to the public, and
improved the work life of officers by giving them more effective ways to manage their
responsibilities.
There has been a definite increase in the visibility and effectiveness of police officers as a
result. Although it takes a great deal of time and many surveys to get any clear indication
of success, there is already a high degree of confidence that the project will positively
impact on community perceptions.
It has also meant a better and more effective provision of services to the public and a
higher quality of information management.

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3.10 Croydon’s virtual wards

Croydon
Primary Description
Care Trust In early 2006 Croydon Primary Care Trust (PCT) piloted the ‘virtual wards’ scheme,
aimed at reducing emergency hospital admissions and improving community care for high
risk patients. Virtual wards are modelled on hospital wards, but patients receive care in
their own homes. Each virtual ward has a capacity to care for 100 patients, and has its
own staff team that meets daily for an office-based ‘ward round’ and to share information.
These teams each have a community matron who conducts initial assessments of
patients, meets their GPs, and generally manages care, as well as a ward clerk,
pharmacist, physiotherapist, specialist nurses and district nurses etc.
At the time of admission to a virtual ward, a set of electronic notes is created, starting with
the matron’s assessment and a summary from the patient’s GP records. The staff team
discusses the five highest-risk patients daily, 35 patients weekly, and the remaining 60
monthly. Staff can also use teleconferencing to participate in the ward round.
The community matron can move individual patients between these groups, and after
they have been in the lowest-risk ‘monthly review’ section of the ward for several months,
patients are discharged back to the care of their GP. An automatic email is sent each
night to local hospitals, NHS Direct and out-of-hours GPs containing each virtual ward’s
current list of patients, and this information is uploaded onto the organisation’s system.
If a patient then contacts one of these services, staff can obtain up-to-date details on the
patient through the ward administrator, and can discharge them back to the virtual ward.
GPs are also kept informed of any significant changes in patients’ care, since each virtual
ward has permanent links with a small group of GP practices.
The Department of Health bought the intellectual property rights to a predictive risk
modelling piece of software, enabling PCTs to predict who is at high risk of unplanned
admission in the next 12 months. Admissions to virtual wards are made according to
the predictions of this software, ie to patients at the highest predicted risk of hospital
admission in the following year. The predictive software makes its predictions based
on four sources of data: in-patient data, out-patient data, Accident and Emergency
data, and GP records. It uses this information to give every individual within the PCT
a risk score. All data are encrypted to preserve confidentiality of individuals, and only

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GPs have access to the identity of the patient relating to the risk score generated. It is
acknowledged that the system may make mistakes, but that it is still a far more accurate
assessment process than that offered by current, more subjective, human processes.
The virtual ward thus pre-empts emergency hospital admissions, reducing the need for
acute care by improving preventative care, and allowing patients to be looked after in
their own homes. Croydon PCT piloted two virtual wards and is planning a network of ten
to care for the thousand highest risk patients in the borough. This would give each ward
an average catchment population of 34,000, or around one ward per fifteen GPs. Each of
these wards is linked permanently to 2-3 GP practices in order to build up good working
relationships. Another innovation is that the catchment areas of the wards set according
to the level of need of patients. In other words, if there are a high number of at-risk
patients in one area, the catchment area is set at less than 34,000 and vice versa. This
ensures equal access to a virtual ward for people with equal need, regardless of where
they live.
Timescale
The intellectual property rights to the predictive modelling software were secured by the
Department of Health in April 2004, and the first two virtual wards were opened in April
2006. A further eight are planned to open by summer 2007. There are also plans to create
a children’s ward and a virtual hospice. In addition, other PCTs are planning on rolling out
this system.
Croydon PCT is currently applying for funding to run a randomised control trial to evaluate
the cost-effectiveness of the system in improving care and reducing unplanned hospital
admissions.
Staff numbers
There is a core team of two people per virtual ward, as well as 10 personnel who spend
part of their working day staffing the virtual ward.
Costs
In the year beginning 21 July 2006, the project received £544,000 in funding.

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There no significant unforeseen costs to speak of, in part because there was no budget
allocated for the project in the first place. The only new money required for the project
was for financing the post of ward clerk, as this role was considered central to the
success of the scheme and the communication it was intended to facilitate.
It was necessary to use and adapt existing resources for this initiative. Additional funding
would have been beneficial for the purchasing of laptop computers for staff to enter data,
patient monitoring systems (‘tele-health’), and other IT devices.
Drivers
The need to improve communication between teams of professionals was a major driver
for this project. This was important in order to avoid duplication and to prevent patients
‘falling through the gap’, as well as to rationalise care for patients.
One attempt at improving communication is the secure email that is sent out every night
to all key NHS services, such as GPs and Accident and Emergency units, notifying them
as to the identity of the virtual ward patients so that if they these patients then present
themselves for treatment, the virtual ward information is accessible on their systems.
Origins
This project was dependent on an in-house ‘champion’ of innovation, who perceived
the potential value of such a system from his hospital experiences as well as his
understanding of the problems which exist in community nursing.

Several internal factors were important to this innovation’s success. Listening to the
perspectives of clinicians was crucial to successfully designing and implementing the
scheme, as was the fact that those developing it were given the space and freedom to
experiment. Presentations were delivered to dozens of groups to explain the project’s
objectives and how it would work. Technological advances were vital, especially the
availability of new predictive software meant that such a scheme was now feasible.
The input and assistance of several key actors was significant, including interested GPs,
and a consortium involving and academic institution and private and voluntary sector

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organisations. This raises the possibility of future collaborations, with private sector
organisations developing virtual wards and providing this service to GPs.
The critical factors to the innovation’s success were the commitment and motivation of
key actors to see the project through to its completion, as well as the prestige gained by
winning awards for the project and the modelling software.
Barriers
The main barriers inhibiting this innovation were lack of funding and relative lack of official
support from central government. The scheme required a complete change of working
practice, and as a result there is a danger that the initial radical view may become diluted
through inertia.
There was some initial reluctance on the part of GPs to experiment with this new
technology, as they wanted to secure personal admitting rights to the wards. However
they were much more receptive once they were persuaded of the increased accuracy and
impartiality of the software, and had witnessed its results for their own named high-risk
patients.
There were additional difficulties in coordinating work with Social Services and Mental
Health services. This was partly because these agencies were concerned that caring
for their patients outside of hospitals would raise their own costs, and partly because
their structures were too inflexible. This highlights a more general problem within the
NHS which acts to inhibit innovation – the need to overcome the rigidity of its working
structures.
Dissemination
The innovation won four categories in the Health Service Journal Awards, which are
the biggest awards of their kind in the UK. Information about the project has been
disseminated through word of mouth, as well as via articles in specialist journals and the
press; for example, it has featured in Nursing Management and on the website for the
Public Sector Reform Conference 2007.
As a result of lack of support from the Department of Health, the scheme has largely been
a grassroots initiative.

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This innovation has been successful in developing a preventative approach to care,
moving away from the traditional NHS model of acute care provision. It makes use of
existing personnel and expertise, so staff and patients report satisfaction with the system
because it is familiar. However, it is innovative in that it offers the patient substantially
better coordinated services.
It has encouraged a shift towards building primary care provision around wards with one
central telephone number, connecting the entire multi-disciplinary team and addressing
problems of poor communication.
3.11 Freedom of Information Policy Knowledge Base

Information
Commissioner’s Description
Office This project involves the development of a knowledge base for the Freedom of
Information (FOI) Policy team, which resides within the Information Commissioner’s
Office (ICO). The team identified a need for a searchable database on the ICO’s intranet
which covers all FOI internal policy lines. It includes issues such as the latest policy line
on deleted electronic information, late compliance with an FOI request, and access to the
medical records of the deceased.
The knowledge base is used primarily by the FOI Policy team who develop internal
policy on these issues, but it is accessible to all teams within the ICO, who can access
the database to check what the current policy line is. This ensures consistency, effective
management and storage of knowledge, transparency, and standardised responses. All
teams which liaise with external stakeholders, including national and local government
bodies, industry, public sector and civil society bodies have access to the latest policy
line. For example, the Good Practice team, which discusses FOI issues with national and
local government bodies, and the data protection team have up-to-date access to the
information held on the knowledge base.
Timescale
This project took approximately six months from design to implementation, from May
2006 to November 2006.

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Staff numbers
Five middle management staff were involved in the development of the knowledge base,
co-ordinated by the ICO’s Knowledge Manager
Costs
As the majority of the work in building the system was carried out by the ICO’s in-house
IT team, a detailed breakdown of costs is not available. However, it is known that there
were no unforeseen expenditures from this project, as it made use of the existing IT
infrastructure.
Drivers
The main driver of the project was the recognition by the FOI Policy team that the
previous system was not meeting the needs of its users. It was outdated, was not
searchable, and was based on Frequently Asked Questions that were not continually
updated. In order to be updatable, and to ensure consistency, it was recognised that the
knowledge base needed to be accessible to teams across the ICO.
Origins
The innovation originated with the Freedom of Information policy team.

The most important internal factor behind the success of this initiative was the recognition
of a high level of tacit knowledge in the organisation, and the need for this knowledge and
experience to be shared effectively. The recruitment of a Knowledge Manager within the
ICO has also helped to harness the tacit knowledge by working with teams across the
organisation.
The main reason that this project has been so successful is that it made use of and
developed existing resources within the organisation. There was only a ‘shoe-string’
budget for the innovation and so the necessary technological solutions were developed
in-house, rather than looking externally for expensive database or search engine
technologies.

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Barriers
The most significant barrier to this project’s implementation was the lack of dedicated
budget for its design and introduction. In addition, the FOI team faced difficulties in
relation to identifying specific search criteria that would be sufficient to meet all relevant
enquiries. Because information on these issues is based on individual cases rather than
generic, overarching issues, developing search criteria which can respond to these needs
initially posed difficulties.
Dissemination
This innovation was introduced with a launch event, to which all managers were invited,
and where a demonstration took place in how the knowledge base is to operate.
Additionally, it has been publicised through internal communications, and reaction to the
project has generally been very positive.

The innovation has improved the organisation’s ability to respond and act flexibly to
changes in policy and new issues arising as a result of the FOI Act. Due to the project’s
success, other teams have expressed an interest in utilizing similar knowledge base
systems, and so systems based on the model developed by the FOI policy team are now
being rolled out for other purposes within the organization.
Initial reports indicate that the project has been successful. There is concern as to
whether it will be able to cope with and carry out the searches needed as more and more
policy lines are added to the system; in other words, there is a scalability issue which
might need addressing in the future. This raises the possibility that a more sophisticated
and comprehensive database system may be needed in the future.

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3.12 www.warwickexcellence.co.uk (Research Portal)

University
of Warwick Description
This project was initiated in response to the problems the University of Warwick
was having in dealing with queries from internal and external bodies about potential
opportunities for research collaboration. There was insufficient clarity on what research
was being conducted within the University, even at a departmental level.
There are currently two stages to this innovation, with a third envisaged. Internally,
research profiles of individual academic staff were collated and inputted into an internal
system which allows searches by keywords or themes. Various methods are used to
encourage staff to maintain their research profiles such as the reuse of data to produce
staff profiles for display on departmental web pages and the use of data in the Annual
Review process to encourage University staff to update their profiles.
The external portal represents the front for the system for external users, who may
include potential research sponsors, postgraduates, and businesses. It is updated
daily and includes a business funding database, information on technology transfer
opportunities, departmental information, news and events, and featured areas of research
interest. It also provides podcasts and the innovative Warwick iCasts, weekly video
bulletins of around 10-15 minutes in duration covering various aspects of research,
thereby incorporating new media into the portal. The main content of the portal is
made up of research profiles of academics, and significantly, enables a move from a
department-based to a topic-based approach through keyword searches. Registered
users can set alerts for updated information on particular topics or individuals and can
also register to receive newsletters.
The portal represents a pilot project for the expertise concept in the West Midlands and
is planned in time be expanded to include other institutions developing a resource for the
whole region.
The West Midlands Higher Education Association (WMHEA) Research Strategy Group
has identified major shortcomings in the information available to support the development
of research and transfer of knowledge within the region. There are twelve Higher
Education Institutions (HEIs) in the West Midlands region, which entails a wealth of

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knowledge and expertise, yet it is difficult for this information to be quickly accessed and
marketed in ways that will benefit the region. The only way a prospective customer can
collect all the information needed is to contact each HEI individually.
Similarly, the HEIs themselves face challenges in putting together consortia to bid for
lucrative grants or to develop solutions to complex interdisciplinary problems. There is
a perception that in the fast moving, global economy, personal networks are not fast
enough, and that in the time required to make a telephone call a business opportunity
may be lost to another region or nation which makes better use of its capacity to manage
organisational knowledge. Therefore, it is felt that the introduction of a new shared
portal will help to improve the attractiveness of the West Midlands to inward investment,
businesses, and to EU and other international research consortia.
Timescale
From the development of the internal system to the delivery of the Warwick portal,
which went live in May 2007, took approximately four years. However the portal itself
was designed and implemented in a period of six to eight months. The especially time-
consuming elements of the process were the collection of content and data-inputting, as
well as selling the project to the academic community.
Staff numbers
This project involved two members of staff to develop and manage the project and
six temporary staff tasked with inputting data. In addition, The Pro Vice Chancellor
for Research and four senior academics sat on the project board. Staff from Warwick
Ventures, the Communications Office, Postgraduate Admissions, and individual
departments were all involved at various stages throughout the initiative’s development.
Costs
The cost of the development of the portal, excluding salary costs, came in at under
£100,000. The internal system already existed, as it was part of the software suite used
by Research Support Services at Warwick, who then further developed it for this project.
Drivers
There were several drivers behind the development of the portal. First was the desire to
help increase internal understanding about what Warwick does, what its strengths are
and what research groupings exist cross-departmentally within the University. Secondly,

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the University’s preparation for the Research Assessment Exercise highlighted the need
to centrally collect research outputs and publications. A third driver was the desire to
showcase Warwick’s research expertise to a wider external audience.
Origins
The innovation originated with one member of staff within the university, and then was
taken up more widely within the University.

The presence of senior support for university-wide projects was very important for this
innovation’s success, as was the presence of strong management who had the ability
to persuade and negotiate with others. The project started at the individual level and
then worked its way up to university-wide research groupings. The potential for ‘wider
markets’, both in terms of potential users and other deliverable benefits to staff and the
university, was realised among senior staff as the project developed.
A combination of Higher Education Innovation Fund (HEIF) money, and internal financing,
were made available for the realisation of this project. HEIF provided funds for the
external portal, while the University developed the internal system.
In developing the portal, discussion took place with other HEIs with similar systems,
and focus groups were commissioned by the Communications Office with businesses to
assess their needs. The technology needed for the project was developed in collaboration
with a private sector firm. The critical factor driving the portal’s design and implementation
was the belief among University personnel that it was an important initiative that required
ongoing institutional support.
Barriers
One serious obstacle to this project’s development was a general lack of time and money
to be devoted to it. There were also a few initial concerns over access to data for some
people, but this was addressed by ensuring that it is individuals who control who sees the
data kept on them, whether it is only viewable internally, can be accessed externally, or
whether they wish to opt out.

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Dissemination
The portal was launched at a special event in May 2007. It has been extensively
advertised in though internal communications and been showcased through University
programme such as e-learning. In addition, extensive training in its use has been carried
out through workshops across the University, and expert users have gone into faculties
and departments to talk to staff about it.

It is hoped that the portal will enable more effective use to be made of existing resources,
and will assist in streamlining processes. It will offer greater access to data, especially
research outputs which were previously unavailable, leading to greater information and
knowledge sharing.
The internal system has proved invaluable and has many benefits both for individuals,
and for the university more broadly. As it has only been live since May 2007, it is difficult
to assess the impacts of the external portal, but initial evidence suggests it is proving
beneficial, offering real potential for research collaboration and far easier access to
individual academics. However the regionalisation process is not yet as far ahead as had
been hoped.

Conclusion
‘Innovations are not random: innovation occurs in relation to the past and present
conditions of the organisation’ (Hall 1996: 201). This statement is a truism, but it is also,
in one sense, misleading. It is true because all change emerges from, and is shaped by,
existing conditions. This is true of all systems. However. it is misleading to suggest that all
change can be controlled. Innovation can be catalysed through a combination of practices
and policies which range through all levels of an organisation and also encompass its
boundary relationships. The public sector, in contrast to the private sector, faces unique
challenges when engaging in this task, but there remains a solid body of literature which
proposes strategies that management might apply in this area. However, innovation is as
likely, or more likely, to emerge through the everyday work of middle managers and staff,
or through serendipity, or informal communication. Innovation may emerge in spite of
management strategies, not because of them. This cautions against attempts to micro-
manage the conditions that give rise to innovative practice.
Nevertheless, innovation is now seen to be critical to public services’ ability to respond

effectively to the challenges posed by social and technological change and rising
public expectations that come with it. Here, policy drivers are increasingly focussed on
finding opportunities to make step changes in the way in which services are conceived,
organised and/or delivered. The great demand that public services serve users rather
than the providers has meant that most of the efforts to develop innovative practice in the
public services have been oriented to issues focussed on service delivery. As a result,
we see much less innovation being undertaken at policy level – both here and in most
other studies of public service innovation. One consequence of this tendency to focus
on delivery is that it encourages a view of innovation as a set of discrete and singular
moments of change rather than a culture or process in which drivers of change are
embedded in and facilitated by the strategic outlook of the organisation.
Of course, this raises wider questions about aversion to risk within the public services.
As long as the costs of failure in the public services remain so high – both politically
and professionally – public managers are likely to shy away from innovation as a
feature of everyday practice. We have seen throughout this study that where public
service innovations have happened, they have invariably featured a commitment from
senior managers to assume responsibility for the risk of failure. The pressure to commit
organisational resources in this way will be driven by a mix of, amongst other things,
political and policy priorities, ongoing demands for greater efficiency and the specific

Conclusion
commitments and incentives of managers and workers to deliver more effective public
services (ie ‘ethos’). While the particular balance between these elements may be unique
to each instance of innovation, it is the fact that they enable an organisation to open up
a dedicated space within which to take risks (and indeed, to contemplate failure) that
presents public services with opportunities to be innovative in the face of contemporary
change.

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Public Service Innovation

A Research Report for The Work Foundation’s Knowledge Economy

Rohit Lekhi, Research Republic LLP

Research Republic LLP

tel/fax: +44 (0)161 286 6964

2 Public Service Innovation’

1. Innovation and public services: Issues and themes 6

2. Public service innovation in the knowledge economy 22

Public Service Innovation’’ 3

The report has the following three aims:

1. To examine current debates, issues and themes around innovation in public

4 Public Service Innovation’

Section 3 presents a series of in-depth empirical case studies of innovative practice.

With the study of public service innovation now emerging as an activity to be

Public Service Innovation’’ 5

1.1. The general case for innovation

Amongst other things, innovation is considered essential to:

6 Public Service Innovation’

Why innovate in the public sector?

Public Service Innovation’’ 7

8 Public Service Innovation’

1.2 Complexities of definition

Public Service Innovation’’ 9

10 Public Service Innovation’

Table 1: Types of innovation

Type Description Public sector example

Source: Hartley (2005)

Individual instances of innovation may exhibit all seven of these characteristics to a

Public Service Innovation’’ 11

Scale, permanence and success

12 Public Service Innovation’

• incremental innovations (which shade close to ‘continuous improvement’, and are

Moore et al (1996, p. 276) suggest that an innovation, whether successful or not,

In summary, innovation is an elusive term. A universal or agreed definition of what makes

Public Service Innovation’’ 13

The adoption of an instrumental view of innovation, as something of key importance

Damanpour (1991), through a meta-analysis of 23 other studies, proposed that the

14 Public Service Innovation’

• greater technical knowledge, professional knowledge, and resources

Table 2: Competencies and skills for innovation

Stage Competencies required Examples

• innovation demands a variety of competencies at every stage of the process

Public Service Innovation’’ 15

Figure 1: A framework for fostering innovation

Source: Mulgan and Albury (2003)

16 Public Service Innovation’

of neighbourhood warden schemes led to the creation of community support officers in

Nevertheless, political and bureaucratic ‘gatekeepers’ continue to play a major role in

These building blocks included:

• generally, a ‘systems approach’ to management, which:

Public Service Innovation’’ 17

• secure support from senior management; have a champion, if possible

Finally Borins drew up the following list of recommendations:

18 Public Service Innovation’

• ensure staff have diverse backgrounds (giving them a variety of perspectives on

This attitude, however, often runs counter to governmental tendencies towards

Public Service Innovation’’ 19

Finally, ‘hyperchange’ can result in ‘overlapping’ innovations (Christensen 1997). A new

20 Public Service Innovation’

Public Service Innovation’’ 21

22 Public Service Innovation’

Public Service Innovation’’ 23

Following the Gershon efficiency review, the UK government is working to an overall