The Spring Budget 2024: Three ways to reshape public services in the UK

Following a period of intense pressure posed by the COVID-19 pandemic, the UK public sector stands at yet another turning point. Many services have been stretched beyond their original capacity and design. At the same time, the journey to net zero, alongside rapid advancements in technologies like artificial intelligence (AI), have further accelerated the need for change – and offered new opportunities for innovation.

While the outlook for major Government spending commitments in the short-term remains uncertain, the Spring Budget may indicate a clearer direction of travel for the upcoming election campaign.

Public sector leaders have a responsibility to make public services deliver better for the people whose lives they touch – from users to public sector employees and wider society. To do this, the sector needs to drive innovation and successfully apply new ideas that will lead to better long-term outcomes.

Bolder ideas, better results

Heading into the Spring Budget and a General Election campaign, what types of approaches can begin to reshape public services? Now is the time for the public sector to move the conversation beyond short-term spending commitments and incremental changes to longer-term reform across three priority areas:

1. Productivity: Innovate to unlock radical improvements

Public sector productivity plays a crucial role in supporting economic growth, and therefore the Government's ability to reinvest in public services. In 2023, the Chancellor revealed that public sector output was nearly six percent lower than it was pre-pandemic.

To improve productivity and deliver better outcomes, advances and investments in technology are important. But, for the UK to prosper from great ideas, innovation must be inspirational, inclusive, and iterative. In particular, there need to be better incentives for departments and delivery bodies to benefit from the productivity improvements they deliver through innovation, ensuring those efficiency savings can be redeployed to support vital improvements in services.

2. Place: Solve complex problems in localities through collaboration

Data from the Office for National Statistics suggests regional inequality is broadly the same today as it was in 1900. Politicians and policymakers across the spectrum recognise the need to grow local economies, as raising productivity represents a structural growth opportunity for the national economy of around £100 billion.

Different places need different things. Catalysing better collaboration across institutional boundaries within and between those places and central government is key, as demonstrated by the investments being made in regions like the West Midlands and Greater Manchester.

Further investment in strengthening devolved governance - including funding arrangements - is required to overcome central concerns about capability and capacity, as well as local concerns about responsiveness to their context and challenges. This includes sharing intelligence and insight, and enabling local partners to better understand and respond to what is happening on the ground. The financial benefit to the economy of locally responsive economic growth – supported by stable, forward-looking partnerships – will far outweigh any short-term savings.

3. Prevention: Shift spending from reaction to prevention

Prevention is about tackling problems before they become acute and expensive, and avoiding the multiplier effect that goes with that. But preventative strategies have been traditionally underinvested in across public services. Redesigning public services in a way that identifies and responds to needs earlier will maximise impact, improve outcomes, and reduce future costs.

From criminal justice and critical national infrastructure all the way through to health and social care, where innovative solutions can improve the prevention, management, and treatment of conditions, there are clear areas which could benefit from a preventative approach. Better data can identify needs earlier and flag the right interventions, drilling down into the root causes of challenges to address setbacks at source.

Kickstarting a decade of innovation

There is a real opportunity to maximise national growth by unlocking the potential of public services for years to come. Making the most out of investments and ensuring that innovation sticks will depend on looking ahead to what can be achieved over the next 10 years – rather than the current election or budget cycle.

Productivity is key to positive growth, combined with the creation of successful and thriving places. But investing more money without doing things differently will not deliver the impact needed to take on the challenges, or seize the opportunities, of an uncertain future.