Government to 'embrace start-up mindset' to reform public services

The Government needs to adopt a “test and learn” mindset to reform public services, according to Cabinet Office Minister Pat McFadden, who will today unveil a £100 million innovation fund to support his plans.

Speaking later at University College London’s East Campus in Stratford, McFadden will call for a shift in the civil service’s approach to problem-solving, drawing inspiration from the iterative processes used by digital companies.

He will argue that “governing as usual” is no longer sufficient to meet the challenges facing the country.

The announcement follows direct criticism of Civil Service attitudes to delivery and innovation voiced by the Prime Minister in a keynote speech last week. 

The Chancellor of the Duchy of Lancaster is expected to say: "Test it. Fix the problems. Change the design. Test it again. Tweak it again. And so on, and so on, for as long as you provide the service. Suddenly, the most important question isn’t ‘How do we get this right the first time?’, it’s ‘How do we make this better by next Friday?’ That’s the test and learn mindset, and I’m keen to see where we can deploy it in Government. Where we can make the state a little bit more like a start-up."

At the heart of McFadden’s plan is a new £100 million innovation fund, which will deploy “test and learn teams” to tackle public service challenges. The test-and-learn approach, widely used in the private sector, involves trialling ideas on a small scale to assess their impact before rolling them out more broadly.

Two initial projects - focused on family support and temporary accommodation - will begin in January 2025, with teams deployed in Manchester, Sheffield, Essex, and Liverpool.

While acknowledging the limited scale of these initial efforts, McFadden will emphasise their potential: "Each of these projects is small, but they could rewire the state one test at a time."

In addition to the innovation fund, McFadden will call for greater collaboration between government and the tech sector by making the civil Service more attractive to private sector talent.

Acknowledging that current hiring practices are often seen as "mind-bogglingly bureaucratic and off-putting," he plans to overhaul these processes to create pathways for private sector innovators to join government and enact change from within.

The proposed six- to 12-month “tours of duty” are designed to inject fresh perspectives and skills into tackling complex public sector challenges.

This initiative is aimed at infusing government with fresh perspectives and skills, fostering a culture of experimentation and agility.

While the reforms have been praised as both necessary and forward-thinking, they have also drawn scepticism. Critics question whether the agility of start-ups can truly mesh with the longer timelines and regulatory demands of government operations.

Doubts have also been raised about whether short-term roles will allow external experts to navigate the entrenched structures of Whitehall effectively.

McFadden will position these reforms as a departure from the “pointless distractions” and “headline-grabbing gimmicks” of previous administrations. By focusing on practical, data-driven improvements, he hopes to set a new tone for public sector innovation.

McFadden’s proposals reflect a broader ambition to modernise the Civil Service and create a more responsive, efficient state. By embracing the principles of start-ups and leveraging the expertise of the tech community, the government aims to deliver more effective solutions for the challenges facing public services today.

These reforms, backed by the £100 million fund and the test-and-learn mindset, mark a significant step toward transforming the way government operates - one experiment at a time.