Welsh Government ran a successful loan fund called ‘Invest to Save’ but were keen to see more innovation and risk in the applications to the fund.

Y Lab designed a three-phase programme that would enable organisations delivering public services to test an idea that would be deemed too risky or uncertain for immediate funding. By offering tailored non-financial support, we were able to build capacity for innovation in the applicants, ensuring that skills and knowledge were embedded in the organisations undertaking the programme.

Over three years, we supported 15 projects to do research and development work into their idea. We offered small cash grants of between £15,000 and £30,000 so that teams from organisations delivering public services could design and test their idea and determine whether it was likely to improve services and generate cashable savings.

Alongside the cash grants, we offered tailored support through programme management, coaching and expertise at several ‘bootcamps’ and support to develop a business case for interest-free loan funding.

In all, four projects were approved for £2.8million of loan funding to improve public services in Wales.

• Small amounts of grant funding are effective in engaging organisations with an idea to improve services
• A cohort approach to learning can provide benefits even when the innovations look different - the commonalities of the process of innovating can enable peer learning and support.
• Buy-in from senior leaders is a crucial barrier and/or enablers to innovation in public services. Projects that maintained this throughout the programme were more likely to reach a successful outcome.

We have published an ‘Innovate to Save Playbook’ to bring together our learning and enable others to design and run a programme using repayable finance for innovation.