“IF YOU don’t have to innovate in the public sector, you usually don’t,” says Geoff Mulgan, director of the Young Foundation, a centre for social innovation.

Research out today from his organisation and the National Endowment for Science, Technology and the Arts (Nesta) looks at innovation in local government and local areas across the UK and internationally. “It’s striking how much the will to change is important and in the UK context that often comes from external pressure,” says Mulgan, and a damning inspection report from the Audit Commission is an example of one such pressure.

Just chucking money at an area won’t kick-start innovation. In fact, it will probably help the area to avoid having to change. What does work is pressure to change, combined with the right leadership and organisational culture, plus money. “Without the right people, it’s pretty hopeless,” Mulgan says.

He adds that innovation in the public sector is an immature field, just as natural science was in 1900. “Science in those days was done by enthusiastic amateurs who had a great idea and tried to make it happen, often in their shed in the back garden. And in the 20th century, science became organised.” Ask the Treasury how to fund public sector innovation and “they wouldn’t have a clue”, whereas the way to fund innovation in science is quite well developed.

The UK is being held back by what Mulgan calls “the two vices of government”. First, that when it does have an idea, it tries it out on the whole population, which is inefficient. Better to try things out on a small scale first, as in medicine or science, and show how they work. “It’s still the case that Whitehall every week will issue a new plan, which may be a good idea, but it will try it out on a huge scale, and it will almost certainly have major flaws, which will be flaws on a huge scale as well.”

Secondly, the Government needs to be more creative in experimenting with new ideas that could be the mainstream ones in five years’ time. Take the criminal justice system, which is “failing by every measure”, Mulgan says. “You’d have thought that the Government would have been experimenting wildly with ways of cutting reoffending rates, trying out 50 [or] 60 things, measuring which ones work. Then when it was clear that some of them were successful, spreading them out, scaling them up. That’s just common sense, how an intelligent government would work, but that’s not how it does work.”

In healthcare, too, ideas need to be tested out, he says. Chronic conditions are likely to be the dominant issue of the next 20 years, yet there is no institution deliberately experimenting with ways of putting people with diabetes and other conditions in charge of designing services. Experimenting needs to take into account the level of risk – “you probably shouldn’t be too creative with traffic light systems” – and, for some areas such as schooling and healthcare, choice.

Areas that are crying out for experimentation, says Mulgan, include chronic illness, carbon reduction for cities, young people not in education, employment or training – “since the numbers are as bad as they were ten years ago, clearly things aren’t working” – and offending.

But don’t the guinea-pigs need to agree? “If the choice is someone being in a prison or being part of an experiment, they’d probably rather be a bit of an experiment. Where things are really not working well, I think it’s OK to take a few risks.”

Transformers: How Local Areas Innovate to Address Changing Social Needs is available at www.youngfoundation.org

Born: August 28, 1961, in London.

Career: Various government roles between 1997 and 2004 including director of the Government’s strategy unit and head of policy in the Prime Minister’s office; before that he was the founder and director of the think-tank Demos, an adviser to Gordon Brown, and a journalist; he has been director of the Young Foundation since 2004.

What he says: “There are many people in the public sector who greatly overestimate how good the private sector is at some things. And exactly the opposite as well – some who are just terrified of it contaminating their purity.”

Little-known fact: Trained as a Buddhist monk in Sri Lanka.

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