The UK’s stretched public finances and weak productivity are well-known facts, but what can be done to improve this picture? At the NAO, we have long argued that embracing public sector innovation, while not a silver bullet, is one of the key ways in which government can make public money work harder and improve outcomes for people.
It is a view shared by government too – and, to its credit, it is putting its words into action. Take the Department for Transport: by 2030, it plans to invest approximately £1.1bn in innovation activities that tackle future as well as present challenges, and span not just the usual planes, trains and automobiles, but future transport systems and the use of drones.
As our new report finds, DfT has made encouraging progress in how it supports the development and adoption of new technology in the transport sector. But more importantly, by looking at real-world examples of innovative transport projects, we have identified several areas of learning that government departments of all shapes and sizes will find useful.
Managing high-risk activity and learning quickly
Here’s a simple concept, but one that’s sometimes uncomfortable to put into practice: innovation means taking risks, since the path to achieving desired outcomes is not necessarily clear or known. But how much risk? And in what circumstances? And how do you communicate that to the people making decisions?
Effective innovation involves departments actively managing risks by clearly setting out their risk appetite when deciding where to invest in innovation activities. This can empower them to take a bold bet when the circumstances are right and to quickly put a stop to projects that aren’t working.
Although we found that DfT has not yet established a clear risk appetite to guide its own investment decisions, there is evidence that it is at least making positive strides in managing high-risk activity and in learning quickly what does and does not work.
For example, after including a high-risk project involving hydrogen power within its broader programme to support the rollout of zero emission HGVs, DfT monitored progress carefully and withdrew funding once it became apparent that the project was not delivering the intended benefits.
Similarly, HS2 Ltd trialled the use of a construction robot that was intended to improve productivity and reduce the risk of human injury during manual labour. By setting up staged decision points, it was able to promptly shut down the trial after the robot was less suitable than expected for HS2’s needs.
Using a range of interventions
Another cornerstone of successful innovation is using a range of interventions together to achieve an outcome. Unlike relying solely on grant funding, a combination of multiple levers ensures that government’s collective effort to achieve positive outcomes through innovation is greater than the sum of its parts.
DfT acknowledges that it could make better and more systematic use of the interventions at its disposal across the department to influence innovation activity.
But it has been made good progress in this space, and has set out the key types of interventions it expects staff to think about using, and how they can be used in combination. By triggering a range of regulatory, specialist, legislative and funding-based interventions, DfT has supported the uptake of sustainable aviation fuel, which is produced from a range of sustainable waste materials and can be blended with standard jet fuel for use in existing jet engines, leading to lower greenhouse gas emissions.
Making good use of evidence and working together
Innovation rarely happens in isolation. It depends on collaboration across government, industry and academia, and making good use of evidence and evaluation.
One example of strong collaboration we found is the work being done to accelerate the use of low‑carbon materials such as calcined clay, which has brought together DfT, HS2 Ltd and wider partners to set out a plan to speed up its adoption in the construction sector.
Being able to demonstrate what is working in a programme and what outcomes it has achieved can also bring about further investment. DfT has a large programme of work on cutting maritime emissions and supporting the development of clean maritime technologies. Evaluating initial activity in this area has not only helped it secure additional funding but has also informed the next phase of its decarbonisation programme.
Although our report focuses on transport, many of the challenges that DfT is attempting to overcome – and the key lessons it has learned from supporting the uptake of new technology – are equally as applicable across the public sector. You might not have much use for sustainable concrete or a construction robot in your day-to-day work – but what these examples reveal about the building blocks of successful innovation is valuable to us all.
Jonny Mood is a director at the National Audit Office and the author of its new report on innovation in transport