The Productivity Puzzle in Public Service Reform

You may remember a news story about a sex offender treatment programme in prisons being disbanded. The decision was taken not just because the programme was ineffective, but because it was actually counterproductive – it seemed to be increasing offending.

However, there was a bit more to it than that. Over the previous decade, senior clinical psychologists had designed and delivered a similar programme. It comprised intensive group therapy and was built around the importance of empathy, support networks, and acknowledgement of wrongdoing. It was evaluated as successful in improving control over impulses, maintaining positive relationships, making good choices, and reducing the likelihood of offending. However, Her Majesty’s Prison Service attempted to roll out the programme at speed, without the involvement of senior clinical psychologists or the sustained investment in resources required to make it succeed.

Perhaps predictably, when it came to evaluation, the positive results of the original were nowhere to be seen. But from this failure, we learnt the wrong lesson and decided the blame the programme itself. It’s a great shame that no intensive group therapy for sex offenders will now be commissioned at scale for a generation, especially when on- and offline sex offenders are growing at the highest rate in UK prisons.  

What does this have to with our national productivity puzzle?

Before I discuss GDP and our productivity puzzle further, some caveats are required. First, I am with Senator Bobby Kennedy when it comes to GDP. It measures everything apart from the important things: love, wisdom, compassion, and beauty.

Secondly, it’s notoriously hard to measure productivity and particularly hard to compare service economies with manufacturing economies. Moreover, deliberate macroeconomic policy since the 2008 crash has contributed to low productivity, keeping borrowing cheap, employment high, and wages low.

Nonetheless, the UK does appear to be less efficient and effective than its neighbours. Despite the recent realisation that the UK has been using the wrong measures for productivity, sluggish growth across all OECD countries remains a problem. The UK lags well behind Germany, Belgium, Denmark and Switzerland, achieving less in relation to how much work we do.

Striking similarities between productivity and public service reform

One explanation given by central bankers is as follows. The UK has some of the most impressive and innovative companies, working in tandem with the best universities, leading the world in life sciences, engineering, and artificial intelligence. The breakthroughs they make – in speeding up processes to convert heat to power, or to automate high volume, predictable, processes – are taking decades to trickle down and become the norm. We have a long tail of ‘zombie’ companies, slow to adopt improved practices.

Anyone who has worked in public policy and public service reform will immediately recognise a comparable context. In the UK we have some of the most astounding schools, effective programmes to reduce crime and reoffending, fantastic family interventions to change children’s life chances. Social work, child welfare, and criminology in the UK are vibrant and respected disciplines. Our academics promote a strong ‘what works’ knowledge base around the world, and in pockets we have impressive results and institutions (such as Grendon therapeutic prison and Leeds children’s services, to name just two). Our voluntary sector, trusts and foundations are well-funded and active in comparison to many other countries.

Yet we also have massive policy failure. Many institutions have been deemed inadequate by independent inspectors year after year. Sandwell is a notorious children’s service, and HMP Bedford is in the news this month. Why are the private and public sectors so slow to share best practice? The resources are often there, but online repositories of evidence are not being used.

We are prioritising research over development, and it isn’t working

The truth is, a constant emphasis on innovation and creativity may be having a detrimental impact.  The phrase ‘R&D’ (research and development) is always conjoined, but perhaps the UK’s problem is that we prioritise the R over the D. We can invent new processes, practices and products, but we stop at understanding what it is about them that needs to be replicated in order to adopt them across a whole system. Ministers don’t give speeches or publish strategy papers detailing the careful and methodical investment in training or retraining workforces.

There are interesting lessons from the commercial sector here, as much of their research into the correlation between innovation, R&D and productivity is applicable to public service improvement.

To summarise, productivity is associated with:

1. A focus on process innovation not product innovation. Helping people do their jobs better, and work better with others is more successful than changing the job or restructuring the team.  
2. Any participation in R&D or innovation. Where public service leaders and managers place a value on learning from the best and rewarding those who do this, a culture of ambition and high expectations is set which is correlated with measurable improvement.
3. Sustained investment. Productivity through innovation is mutually reninforcing and improves over time. For example Invisible Walls at Parc prison in Bridgend is successful for many reasons, not least its sustained, high quality, leadership over eight years. Success breeds success.
4. Fixed R&D or innovation costs, which are smaller than repeated ‘sunk costs’ (necessary and irrecoverable upfront spend).
5. Once you have set up your outward-facing, self-improving, innovating team, maintaining it is cheaper than a series of discrete initiatives.
6. Partnerships. Large and complex entities seem to get more productivity return from innovation and R&D than small ones.  

This last finding on ‘partnerships’ is a call to action to local or regional leaders to join forces and pool resources in order to focus on the ‘how’ and not the ‘what’. When policymaking fails, it’s usually because it has tried to solve a complex social problem using a positive, evidence-based innovation as a ‘what’, instead of a ‘how’. Innovations are not miracle vaccines to be administered without paying close attention to developing processes to ensure they work at scale.