Yeah but…how can we invest in continuous improvement when there’s no more money?
[First published here on November 6, 2022]
The Government’s Infrastructure and Projects Authority tracks 89 projects that between them cost £128bn for a promised £326bn of expected monetised benefits.
Successful government service transformation is a big prize. Redesigning services, and escaping tech renewal cycles where you replace an entire digital programme every few years, by moving to continuous improvement, is challenging but absolutely worthwhile and a really strong invest-to-save case.
But you’re right — there isn’t the money (at least not with this government’s economic and fiscal policy) to adopt this approach for every government service.
Having read a stack of NAO, IPA and select committee reports, I know there’s massive room for improvement on the cost efficiency of the programmes, products and services we do prioritise.
Nonetheless, in order to find the money for the things that matter most — the services most broken, or for the most in need, or used by millions, or that deliver manifesto commitments — whichever measure you use — you have to proactively and strategically prioritise your investment.
I know it sounds wild to say that this isn’t done everywhere in government — but yeah.
Why not?
Well, for a number of reasons:
(1) senior leadership fiefdoms — they don’t exist everywhere but, where it exists, an unspoken agreement not to tread on each others’ toes limits cross-silo prioritisation in departments;
(2) political incentives — Ministers get their legitimacy from making and keeping promises to the electorate, and can lose support quickly for turning services off. As a result it you’ll often find them pushing extremely hard for the things they care about, and refuse to give permission to deprioritise or turn off the things they don’t;
(3) opacity —they don’t know what all the services are. Some services, products and systems have been around 50+ years and it would require some sophisticated archaeology to understand a department’s full service estate (remember, not all have service lists). Some products are tiny and hidden in a budget line somewhere, with no real responsible owner — there’s definitely a size below which a service isn’t actively managed or funded but continues nonetheless. And central departments who might want a view of the “whole” are usually only interested in services over a certain size, though I’ve no doubt there’s a lot of money in that long tail.
What should we be doing to release some of that funding?
Senior leaders need to know what they’re spending money on, how much they’re spending, and why — what outcomes each service is intended to deliver.
Then, simplifying this terribly, they need to ask themselves:
Are these high priority outcomes — relative to other outcomes they could invest in?
Does this give a high return on investment in terms of outcomes—so a good cost-benefit ratio relative to other services? Ignoring money already spent so far (“sunk costs”), does the business case stack up?
What is my risk appetite for potential service failure here — can you gauge the impact and probability of service failure, and is it acceptable?
They can use the answers to these questions to proactively decide their strategic intent for each service.
Strategic intent
If the outcomes are no longer desirable or relevant, or the cost-benefit analysis doesn’t justify maintaining the service, then it should be decommissioned.
If the outcomes are high priority and the service is or will deliver a solid return on investment, then the service should be continuously improved for as long as that is the case.
If the product or service isn’t a strategic priority, and the risks of service failure are not too dire for you to stomach, then a strategy of managed decline could free up some cash to spend on your priorities. You would fund essential maintenance but not invest in continuous improvement, and so you might reasonably expect gradual obsolescence ahead of eventual replacement or decommissioning. Of course, what was “essential maintenance” is only truly knowable in hindsight —so you’ll likely also need contingency planning, a budget that allows you to respond whenever the sh*t does hit the fan, and your fingers crossed that it doesn’t happen too often.
Each of these approaches will come with a different funding profile. Prioritisation — and the release of funds for investment in continuous improvement of high priority services — depends on the spread across these strategies.
There is one final category to mention: unmanaged decline. This is effectively the default strategy taken where there is no strategic intent. Among the very long tail of smaller products and services, there are some for which the organisation has no strategic intent. For instance, there are the things that run reliably for years and no-one notices until they go wrong: plenty of organisations now have train ticket kiosks, or digital signage in their lobbies, that were bought at some point in the past but don’t have a responsible owner, a maintenance budget or a decommissioning plan. Very occasionally you’ll also see more significant services fall into a chaotic form of unmanaged decline — where a service is poor VfM, unaffordable, a low Ministerial priority but its closure is politically unfeasible, and its leaders are absent, incapable or or unscrupulous.
Yeah but…how can we invest in continuous improvement when there’s no more money?
Irrespective of efficiency savings that might be achievable, we must proactively and strategically prioritise investment in the first place.
We simply cannot do everything and so we need to decide what won’t be done (not just what will).
A services strategy requires leaders to make conscious decisions about their strategic intent for their service portfolio. This has to be the starting point for responsible stewardship and good use of public money.