1. Stop doing what doesn't work

Laura Bunt - 25.10.2010

Last week’s Comprehensive Spending Review has made the challenge critically clear: how can we save money in public services without significant harm to society?

Govt receipts and expenditure graph [original]

The full impact of decisions made will continue to unfold over the next weeks and months. The Spending Review has announced the top line; now service leaders and managers will have to translate these figures into real savings in how services are delivered locally.

Spending decisions made now will define how services operate for years to come. So it is important to stop and think about want we want services to look like in the future: how do we protect society in the best and most efficient way? How could services be more effective at meeting people’s needs for less money?

Approached as an innovation challenge, the debate should not only be about how reductions will be achieved, but also about how the resources that are available can be spent most effectively. We’ve argued before that too much money is spent on reacting to problems, instead of on services that prevent and solve them. When making cuts, you can afford to reflect on the sustainability of existing investments and force some bold thinking about what could work better for service users.

Innovation will always involve difficult decisions. Too often we only focus on part of the process – the generation of new ideas. But innovation is as much about stopping doing something as it is starting or developing something else. For public services, this means changing or decommissioning existing services to reinvest in a different, better approach and means confronting fundamental questions about the ‘right’ way to deliver what the public need. Remember, both cuts and investments are a choice; what you cut now will start to define where you are going to end up.

Look at how Texas reformed its criminal justice system. Faced with reduced budgets and an escalating prison population, Texas reinvested $500 million they would have spent on new prisons into community-based initiatives that tackled the root causes of crime: more education projects, rehab support, drug and alcohol advice services. It had a transformative effect, and drastically reduced crime rates whilst saving money. This was a major project, and had both the right political will and local support. Given significant reductions in prison capital spending put forward in the Spending Review, new approaches to justice and prison services are an urgent innovation challenge.

Examples such as Justice Reinvestment should prompt thinking about how and where you can steer investment to determine your future. In health care for example, decommissioning hospital beds and acute care provision might feel politically infeasible, but could you reinvest some of that money towards services that you know prevent problems arising in the first place? Are there ways that better support at home could save money on residential care services? Don’t put aside your ambition for better services. Indeed, it is the route to saving money.

(Above image courtesy of HM Treasury)