Executive summary
Since gaining power in 2024, the Labour government has made no secret of its desire to promote innovation. Yet even with an overt licence to innovate, those charged with driving change are finding the route to transformation challenging.
In March 2025, RedRock Consulting held a roundtable discussion with eight innovation leaders who have a close insight into governmental processes. The goal: identify solutions to the blockers holding up government-led innovation.
The discussion was wide-ranging, with concerns and solutions that can be distilled into six essential areas:
- People and culture
- Security and risk
- Public-private collaboration
- Planning and procurement
- The infrastructure of innovation
- Shared learning
The following paper delves deeper into the obstacles in these areas, and the solutions that could unlock transformation in the public sector.
Why does innovation matter?
The Conservative government in 2021 defined innovation as ‘the creation and application of new knowledge to improve the world’. That remains a powerful statement because it identifies not only the ‘what’ – innovation – but also ‘why’ a government should take on this role: ‘to improve the world’. It may have been the previous administration’s definition, but it is clear the current government takes it just as seriously.
It is increasingly obvious to those in government – and to those who vote for them – that innovation is vital not only to the improvement of public services, and to national and global economic growth, but to nothing less important than the survival of the human species and life on this planet.
From Prime Minister Keir Starmer’s blueprint to turbocharge AI to the ambitious Invest 2035 industrial strategy green paper, the administration sees innovation as the key to all five of its stated missions – economic growth, clean power, halving serious crime, reform of education and childcare, and an NHS that is fit for the future.
The establishment in 2024 of the Regulatory Innovation Office (RIO), chaired by former Tory science minister Lord Willets, is a landmark policy for the Department for Science, Innovation and Technology (DSIT), designed “to bring high-growth innovations from AI in healthcare to engineering biology to market quickly and safely”.
And Peter Kyle, Secretary of State for Science, Innovation and Technology, has been proactive in trying to create an industrial environment that welcomes innovation rather than blocks it. In his speech to the TechUK Conference on 10 March 2025, he praised many recent and upcoming innovations within British industry, and promised to rip up the regulations that block advancement. He also highlighted his AI Action Plan to ramp up AI adoption across the UK.
Removing obstacles to innovation
Yet while the race for innovation is on in British industry, the rate of innovation within the civil service itself has historically been slow. And without identifying and tackling the systemic obstacles to innovation, there is a risk that, with all its good intentions, this government will be no more able to galvanise change than the previous one, with its 2021 Innovation Strategy.
With the Prime Minister placing a renewed focus on innovation both within the public and private sectors, we brought together eight innovation leaders, each with a unique insight into innovation within government and the civil service, to a roundtable discussion and asked them: how can we better enable innovation, cultivate it, and set the foundations for it to flourish?
The answers, inevitably, were varied and complex, ranging from small nudges and tactics to systemic cultural shifts. But we can sum up the obstacles to innovation – and the solutions to these problems – under six segments: People and Culture, Planning and Procurement, Security and Risk, Public-Private Collaboration, Infrastructure, and Shared Learning.
NB The following findings are based on the outcomes of the roundtable discussion but are not assigned to any specific contributors.
1. People and Culture
While so much of the discussion in innovation is around technology, AI, and automation, it is impossible to make progress without the right people and the right skills in place, and a culture of growth and encouragement.
This means that any change programme must start with the people involved. The backing, buy-in, and skills base of the personnel, in alignment with the goals of the programme, add up to make the foundations upon which the funding, processes, ambitions, and successes will be built, according to our panel.
“Everything else is manageable, whether it’s funding, process, willingness to change or break a strategy or a system, but it starts and ends with the people who want it.”
Roundtable panellist
When innovation is expected at speed, skills and capability are crucial right across the civil service, and in the contractors and consultants they replace. But it is at senior level that a greater understanding of technology and innovation can be most valuable. Risk aversion is often rooted in ignorance or misunderstanding – and it can be used to hide a lack of knowledge when decision-making, cutting off valid programmes that could drive transformations.
Not only do more knowledgeable senior leaders prevent blocking of innovation, but they understand the opportunities and what it takes to deliver them. That means that rather than working towards immediate and short-term goals, they are more likely to support funding permanent staff over multiple years for projects, with the right technology and ways of working, and mandate organisationally, with accountability based on outcomes rather than specific deliverables.
Most importantly, the right leaders will instil an organisational learning and growth culture around innovation.
Achieving that culture of innovation and learning is far from simple. After all, the civil service experiences very different pressures from those in the private sector.
So should innovation be enabled by comfort with – or even embrace of – failure, allowing greater risk-taking? Or should the parameters of budgets, reputational risk, and mission or purpose, be employed as factors to focus the mind? It’s a balance, the panel agreed, that requires comfort with both sides – and getting it right is essential.
“I think that the real beauty of innovation happens in the middle, with enough stress that people realise that they can’t just rest on their laurels, but enough of a culture of support and catching people when it goes wrong, that they’re able to take a risk.”
Roundtable panellist
2. Security and Risk
Perhaps that balance is so very hard to achieve because the risk itself is so great for governments. Entrusted with highly confidential data ranging from citizens’ health records to national defence intelligence, the stakes for governmental departments could not be higher. And that is certainly having a blocking effect on innovation, according to our roundtable.
It is not unknown for organisations in the public sector to work against themselves. A culture of risk minimisation, rather than risk management, can kill the energy and capacity for innovation, and when it comes from the top, the message is that there is no appetite for risk or desire for innovation.
This can extend not only through culture but to creating very specific limitations, such as blocking useful commercial software in governmental departments due to reputational risk and a lack of trust – a particular problem in departments led by tech-averse managers, who will always lean towards security over risk.
“We have this software which could revolutionise a lot of what we do across the whole division, make people’s lives so much easier, reduce the need of senior people to do admin – but we can’t go all in because we don’t yet trust it yet.”
Roundtable panellist
Given the serious responsibilities of government, it might seem that this is an intractable problem, but there are some possible solutions. One panel member suggested establishing a Chief Innovation Officer in every department to act as an informed and rational voice with the authority to rationalise risk, and to communicate the benefits within and beyond the team.
3. Public-Private Collaboration
With risk and security a major issue, it’s no wonder the private sector can struggle to find a place in governmental innovation. Yet the civil service relies on companies such as Microsoft for its digital infrastructure, as well as for the technologies upon which innovation teams are building their own solutions.
So how can the public sector leverage the relative freedom and risk appetite of the private sector to build solutions that can reach far beyond the short-term needs they are designed to meet?
The panel agreed that the onus is on the civil service to clearly signal its intentions around innovation, not just through words but through actions, tenders and clear KPIs.
With this clarity, the private sector can get behind innovation – for example, Venture Capital money will not flow towards innovating in a particular area unless there is a clear payout – in other words, the knowledge that if an innovation is successful, it will be bought.
Presenting government as effectively the largest customer for a particular innovation is a way to indicate a stable commitment to its development. An example of where this is already taking place is in AI, as demonstrated in DSIT’s AI Action Plan, which states that “government purchasing power can be a huge lever for improving public services, shaping new markets in AI, and boosting the domestic ecosystem. But doing this well is not easy – it will require real leadership and radical change, especially in procurement.”
An unlikely forerunner to this approach is HS2 – a project that has had a mixed reception. Yet its procurement rules meant that if contractors subcontracted, they were mandated to work with an SME and to innovate within the projects, and it recently announced its seventh Innovation Accelerator programme. The result has been a stream of transport innovations.
4. Planning and Procurement
Naturally, when discussing public-private collaboration, planning and procurement are part of the story, but this area also deserves its own scrutiny, affected as it is by every other factor, including culture, learning, infrastructure, and security.
Beyond the issues of security already discussed, the big concern around planning and procurement is the way that governmental departments remain at the mercy of policy changes, personnel changes, and administrational changes. Where one government may wish to focus on the benefits of AI, another might be more focused on countering the risks of new technologies.
Additionally, the ‘churn’ of a department’s personnel could affect planning for innovation. For example, in a young department – one with a fast turnaround of people who are keen and hungry to achieve – the benefits of energy and ambition can be cancelled out by a lack of continuity for innovation programmes.
Short-term planning and KPIs can also block the commitment to a project that would yield stronger results. The panel suggested that because permanent secretaries move between departments over relatively short periods – unlike, say, successful CEOs or CTOs. Politicisation of innovation funding – and the risks of poor press coverage when it goes wrong – is a clear issue with long-term commitments to innovation.
“Unless the Prime Minister mandates each permanent secretary to do something, nothing’s going to change.”
Roundtable panellist
5. Infrastructure
It seems, then, that even with the right mindsets, the right people, the right public-private partnerships, and the right approach to security and risk, it is necessary to write innovation into the very heart of departments, with the necessary infrastructure and effective frameworks to make it not only possible, but a no-brainer. And the key to that, said several experts, is productising innovation.
At its simplest, putting product managers in place to support a new piece of technology, or other innovation, is a simple strategy that could make a huge difference to outcome.
In some departments that is already happening, with strategic direction for people within the organisation to productise their services – though there remains a gap between innovation and delivery.
One solution is something that crosses over into the People & Culture function, and Planning & Procurement: employ the right people in permanent or long-term roles, rather than relying on contractors. For example, building an in-house team – product manager, delivery manager, user research, UX, architecture, DevOps – can be less costly in the long term than using contractors, while empowering them to continuously improve and innovate.
Upstream of product teams, though, is the challenge of offering the physical and cultural space to enable innovation to happen, whether that’s an incubator, or mission-led innovation.
In an AI incubator, there is an assumption of failure with most products, something that drives innovation through an ability to absorb and learn from mistakes. The question, though, is whether incubators produce usable innovations – or risks ignoring need in search of newness.
“In the incubator for AI, you might have had 57 things that you’ve tried, and nine of them have reached alpha/beta. That’s actively encouraged. We’re not expecting everything to scale. And you do get innovation through those methods.”
Roundtable panellist
The alternative approach is mission-led, in which one of the government’s missions is a forming function for innovation goals, with the strategy working its way back from the mission to work out the innovations needed to get there. The focus of mission-led innovation is a clear advantage, but there is a risk that the language can be retrofitted to a funding application, even on projects that are not truly aligned.
6. Shared Learning
With the huge diversity of approaches, challenges and technologies in use, and experiences of trying to put innovation into action, there’s one thing that everyone on the panel agreed on: the need to share learnings and frameworks.
The civil service is clearly full of people who are engaged and passionate about improving government, improving lives and improving processes, but without a way for them to share notes and align paths, enormous amounts of time and energy will be wasted.
How can governmental departments share their experiences, build repeatability and scalability into their learnings, and reduce silos?
One solution has been implemented by Microsoft, with its Innovation and Collaboration Forums, which offer a space for public sector organisations with similar goals to learn best practices from other successful projects, to ask questions, and to streamline approaches across departments, councils and local government.
In the field of AI, within government, there are various initiatives in progress, including the publication this year of the AI Playbook, which lays down guidelines and considerations. A future step might be to create a set of case studies of the most impactful AI projects across departments and reusable components to help build robust infrastructure.
“This is what we want to build. To have all the case studies of what everyone is doing across AI in all the departments where it can be shared, for citizens, industry, and other civil servants to view.”
Roundtable panellist
Simplifying the complex
The civil service is an unimaginably complex entity, and it’s no surprise that there are elements, among the brilliance, that are lost when it comes to innovation.
Is it really possible to simplify and streamline the frameworks and working practices needed for a radically innovative workforce? Certainly it will be hard, but it is an imperative, not only for the sake of innovation but for the sake of the people working in government, and the country they serve.
One of the most crucial areas to explore is cross-governmental collaboration. RedRock is committed to running more roundtables and meetings, creating a platform for civil and public servants to share, learn and upskill.
If you are interested in taking part, get in touch with Edward Pikett by emailing Edward.pikett@redrockconsulting.co.uk.
