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Evaluation of the Invest to Save Budget:
Executive Summary of Findings

Executive Summary | Report | Projects

Introduction

This is an executive summary of the findings, conclusions and recommendations from the initial evaluation of the Invest to Save Budget (ISB) conducted by Segal Quince Wicksteed Limited (SQW) for HM Treasury and the Cabinet Office.  The evaluation focusses on the projects funded in the first ISB bidding round. It draws on the main evaluation work to address four key issues, namely:

1.      Whether ISB should be continued;

2.      How ISB could be improved;

3.      Lessons from successful cross-cutting work;

4.      Factors influencing success and failure.

1.   Should ISB be continued?

To answer this question SQW took, as a starting point, the objectives of ISB and assessed how far they are being met by Round 1 projects. Thus, the evaluation has explored:

• How far ISB has brought about joint working between government departments and agencies
  
  
• Whether projects funded through ISB represent innovative forms of public service delivery
  
  
• The extent to which ISB projects have led, or will lead, to reductions in the cost of public service delivery and/or improvements in the quality and effectiveness of services.

More joint working?

In many cases ISB projects have cut across existing policy hierarchies and customer-contractual arrangements. They have often brought together organisations with different strategic objectives and focused their expertise and responsibilities on activities which still fit, strategically, with their own priorities.

In the majority of cases the organisations concerned are working successfully together and would not have done so to the same extent, or as effectively, without the policy and funding impetus provided by ISB.

More innovative?

A good number of the projects funded in Round 1 have tried something which partners consider is new in their policy area.  Given the rapid advances in information and communications technology in the last decade SQW could not say that the projects necessarily represent technical state-of-the-art. However, in the application of technological possibilities to the delivery of services from the public sector, many of the projects represent a major step-change from the way things have been done in the past.

The fact that so many of the projects involve....

exchange of data or common databases, often preciously guarded in the past, or where potential was restricted for data incompatibility reasons . . .and/or

electronic access, when internet and call centre technology has only recently been widely used by the private sector  . . . and/or

simply working together, when funding streams and accountability issues presented apparent difficulties in doing so . . . 

Y. is a clear sign that ISB has encouraged more innovative activity.

More effective and/or cost-effective?

It is still too early to assess this quantitatively because the majority of the projects are still being implemented and some have still to get to that stage.  Nevertheless, the signs are very encouraging indeed.  Projects across a variety of policy areas are already beginning to yield, or to promise, cost-savings (or more effective deployment of scarce resources). Some have demonstrably enhanced the quality of services to the public, and others are generating, or will lead to, a wide range of high level benefits, including swifter and surer justice and lower levels of tax or benefit fraud.  The consistent feedback from lead organisations and partners is that the additionality of ISB funding has also been generally high B i.e. the projects would not have proceeded in the same form or at all without ISB funding.  Moreover, even where projects have yet to be fully successful, the partners have typically acknowledged the more positive attitudes and behaviour that the ISB funding has encouraged. 

So, should ISB be continued?

On the basis of the Round 1 projects, ISB should be continued with the same strategic objectives.  It is contributing successfully to the aims and objectives of the White Paper on Modernising Public Services for Britain.  Many of the Round 1 projects show great potential for, or are already beginning to deliver, real improvements in public services across a wide range of policy areas and project types.  ISB is also adding value B both as a policy of encouraging innovative thinking and joint working, as well as funding projects which could not otherwise have proceeded on the same scale, at the same time, or at all.

Treasury Ministers decided in the 2000 Spending Review that the ISB should be extended for a further two years.

2.   How could ISB be improved?

As with all new programmes there is scope for tightening bidding guidance, selection criteria and monitoring arrangements. SQW identified four areas for improvement:

Clarification of the responsibilities of HMT and spending departments so that the latter are more clearly required to exercise their role in monitoring expenditure and achievement and in disseminating key lessons and embedding the ISB ethos within their organisations and the public sector more generally;

Further development of the well-regarded bidding guidance, to clarify the minimum stage of development which projects must have achieved before they are considered for funding, and to set a maximum stage of development beyond which a more stringent additionality test would be applied for ISB funding.  The seed funding, available to date, to help projects test their ideas before proceeding to implementation is necessary.  It should be retained and its use extended (without any necessary guarantee that further ISB funding will be available for, say, prototype development).

As an "invest to save ethos" takes hold, a tightening of eligibility criteria would be justified to focus future ISB resources at the margin where there is greatest scope to secure additional joint working, where more partners may be required and/or where innovative activity is most risky. 

Clearer and more rigorously enforced monitoring requirements are required, in association with the first point about clearer roles and responsibilities.  This is needed to encourage more explicit accounting of actual against projected expenditure and outcomes, and to ensure that clearly defined targets for both are in place even where the project takes the form of a feasibility study, or where the attainment of the outcomes can only be assessed qualitatively ahead of evaluation.

3. Lessons from successful cross-cutting work

and

4. Factors influencing success and failure

These issues are addressed more fully in the main report in conjunction with the ten case-study projects.  In this summary SQW draw attention to three key factors which have influenced success or failure in achieving joint working and/or innovative action:

Clear project objectives and allocated responsibilities between partners, defined sufficiently tightly to provide the essential focus for projects and partner actions, but broad enough to secure the active involvement of key organisations. 

High-level commitment, from agwncies and departments involved.Those Round 1 projects that operated with its strategic steer demonstrated that it (a) provides the clearest possible commitment of an organisation and its resources to a project, especially when there are other priority initiatives, (b) clears the ground of significant policy or strategic issues and frees up project management for the essential tasks of design, implementation and monitoring, and (c) increases the likelihood that effective outcomes from the projects will be incorporated into the strategic and operational mainstream

Robust project management systems and high quality project management. s involved, their negotiation skills and their ability to see the wood for the trees. 

Recommendations

Based on their findings, and in addition to their principal recommendation that the ISB should continue with its current strategic objectives, SQW have made the following particular recommendations, designed to improve the effectiveness and cost-effectiveness of ISB funding. These are their full recommendations, as they appear in the main report, which build on the illustrative summary featured above.

Recommendation 1: That future ISB funding should be directed at the places that it has not so far reached – to avoid ISB dependency and to widen its demonstration effects – this to be accomplished whilst maintaining the “challenge funding” approach.  HM Treasury should work closely with Cabinet Office and spending departments and draw on existing service delivery consultative mechanisms such as Service Action Teams, the People’s Panel and departmental consumer champions to identify areas where ISB could be most effectively deployed.  The aim should be for a strategic framework for joint working and innovation which highlights areas where ISB bids are more likely to be supported.

Recommendation 2: That the respective roles of the HM Treasury/Cabinet Office and the spending departments in the ISB initiative should be clarified, and bidding and reporting procedures adjusted, to emphasise the role of the departments in:

a)delivering advice, commentary, and feedback on ISB expressions of interests and bids;

b)monitoring project expenditure and achievements against budgets and targets;

c)disseminating and demonstrating the advantages and effective procedures for innovative joint working; and

d)embedding the ethos of cross-cutting partnership work within their organisational structures and management procedures.

We recommend that the roles of HM Treasury (through the new ISB Unit) should be distinguished from those above (for partner organisations) and should be clearly communicated to spending departments, other agencies, and project managers.  We suggest that, in addition to its responsibility for managing the ISB bidding and selection process and overseeing the initiative, the ISB Unit should have at least three proactive functions:

• liaising with spending departments and agencies on the strategic direction of ISB (see Recommendation 1);
  
• providing advice and encouragement for spending departments and other agencies to exercise a more hands-on role with respect to project monitoring; and
  
• encouraging cross-fertilisation between (and within) departments and agencies to maximise the demonstration effect of ISB.

Recommendation 3: The bidding procedures in place for Round 1 should be amended to:

a)      give more time for the preparation of expressions of interest and bids for ISB funding;

b)      encourage partners with no or little previous experience of joint working to participate in ISB projects with their more experienced partners exercising a mentor role;

c)      include within the guidance a specification of the minimum stage of development that projects should have achieved before they are considered for funding (for example an Outline Business Case or Detailed Feasibility Study).  For projects at an early stage in development spending departments should be required to provide a clear account of the role they will play in guiding them through to implementation;

d)      emphasise the availability of seed-corn funding to help partners express and test their ideas in order to reach the minimum stage of development as defined above, without prejudice to decisions on the future allocation of ISB resources beyond that stage.

Recommendation 4: That ISB funding at lower rates than 75% of total project costs should be explicitly introduced for projects (perhaps on a tapered basis):

a)      that have already reached an advanced state of development;

b)      whose innovative content cannot adequately be demonstrated;

c)      involving single departments;

d)      previously in receipt of ISB funding in the same policy area; and/or

e)      involving department and agencies with well established cross-cutting partnership arrangements between each other.

The rate of support should be at the discretion of the ISB Committee and subject to negotiation between staff in the ISB unit and the spending departments on a project by project basis to ensure maximum additionality.  While we feel that the rate of support could be lower in some cases, we would also recommend the introduction of a minimum rate of support – perhaps 30-40% - to ensure that the initiative, with its emphasis on risk taking and innovation, is not devalued.

Recommendation 5: That project management and monitoring arrangements should be made more robust and transparent by:

a)      Strengthening guidance (at bidding and Implementation Plan stage) on the importance of establishing the respective roles and responsibilities of partners and introducing financial management and monitoring arrangements to minimise accountability problems between departments by rendering more transparent the flow of funds and the activities/outputs they are used to generate;

b)      Building on the widespread use of PRINCE 2 and other, recognised, formal project management system by requiring their use in all cases - promoting pragmatic rather than mechanistic use of these tools;

c)      Placing more emphasis in guidance material on the critical requirement for skilled and, where possible, dedicated project managers;

d)      Significantly strengthening the monitoring of ISB projects in two ways.  First, clarifying the overseeing role and responsibility of the ISB unit and ISB Committee and the role of spending departments in monitoring project expenditure, activities and achievements and reporting to the ISB unit.  Second, ensuring that monitoring at all levels – from project, to department, to ISB Committee - is fit for purpose, particularly in terms of expenditure flows and measurable targets for project activity and achievements;

e)      Using the resources of the new ISB unit to encourage and, if necessary, provide dissemination and networking support for those engaged in ISB projects (beyond monitoring), including the dissemination of Round 1 project evaluation material.

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