A new how: what new types of state capacity do we need?

From the polycrisis to the pace of technological change, our old ways of governing are struggling. But a new ‘how’ is taking shape. It combines missions, relational practices, and internet-era methods to create a new type of state. One that is both more technically adept and more human.

If we’re going to do a better job navigating the twenty-first century, it feels clear we’ll need new types of governing capacity. We also know that the ways in which we govern run deep, reaching down into compressed layers of theory, mentality, and practice. So ultimately I think it will prove right to say that we entered the second quarter of the century needing a new governing paradigm.

Still, one thing we’re not light on is essays declaring an end to New Public Management. So maybe it’s time to be more specific. What is the question a new ‘how’ needs to answer? And can we describe the new types of capacity we need with any precision?

Getting clear on the problem

It seems to me we’re interested in the ‘how’ of government again for four main reasons. Together these describe a problem statement; the question a new ‘how’ must answer.

First, there’s the polycrisis, with its many textures and rhythms. The cymbal crash of the Great Financial Crisis with its long, tremulous fade-out; the rising drumroll of climate change; and Britain’s own janky rhythm of standalone crises: Grenfell, sewage spills, Horizon.

The polycrisis partly just makes the question of ‘how’ feel urgent. But its constituent crises also have something in common; they each reveal a hubris in our underlying economic assumptions.

From the banks that shunned the state like a swaggering teenager until they fell and came crying; to the environmental externalities that turned out to be existential; to the way, time and again, we thought we were driving efficiencies when really we were skimping on sewer capacity or fireproof cladding. Our economic premises seem to keep resulting in fragility and short-termism.

So the first thing we need from a new ‘how’ is the ability to pursue a broader conception of value. One that is more sustainable, resilient, and aligned with human wellbeing.

Second, we’re talking about ‘how’ again because of where we are in the political cycle. A Conservative Party that, according to polling, may not be long in office, and a Labour Party tentatively preparing for power, with a slowly growing confidence.

Wise heads in and around Labour have used this last period to reflect, asking once more of their time in office from 1997 to 2010: what worked and what didn’t?

What feels striking about that question is that the answer today differs so much from the answer back in 2010. So much of the Labour legacy – the things that got better – has since been reversed. Most starkly, Labour’s two flagship agendas, child poverty and NHS performance, have slid back toward their mid-1990s levels. As Gordon Brown said recently, what stands out now about 1997-2010, viewed from a distance, isn’t just the progress that was made but the stunning speed and totality of its subsequent reversals.^[1]

For Labour, this should focus the mind. And what it should focus the mind onis the question: how do you make change last?

This in turn draws our attention to the progress that did last, and even flourish, since Labour last left office.

Think, for example, of the inner-city schools that still bloom every summer in glorious exam results, tended by diligent teachers and local school leaders. Or the National Minimum Wage, which took root and grew healthily after 2010, planted firmly in the Low Pay Commission. Or quieter successes like household recycling, which have grown via local tendrils like ivy, out of the light of attention. Or the Equality Act, so hardy in spite of the frosty weather.

Contrast these successes with Tax Credits, Labour’s main tool for tackling poverty. Tax Credits have been improved in some respects by Universal Credit yet their value has been pared back to a stump. Little wonder, perhaps, when the Tax Credit policy was peak technocracy. This was change done by Treasury fiat, via a system so complicated even its recipients didn’t understand it. A policy that, if we’re honest, was optimised for the distributional chart the morning after the Budget.

So, a hypothesis. Maybe New Labour’s legacy was at its most enduring when at its least narrowly technocratic. When progress was sought by more systemic means, wiser to political economy. And when goals were pursued not directly – a finger placed on the needle – but obliquely, by investing in capabilities and institutions, especially local ones. And so maybe a new ‘how’ should be a deeper, more architectural science than 1990s deliverology.

Third, we’re interested in ‘how’ again because of the ever-accelerating pace of technological change.

Right now we’re being disrupted by Artificial Intelligence, but if this new wave teaches us anything it’s that we haven’t made use of the last one. Thirty years since Netscape’s famous browser sent the internet mainstream, our governing institutions still run to an industrial logic.

That’s not to say we haven’t made progress. Transactional public services from passport applications to tax payments are easier, quicker, more efficient. There are pockets of exemplary digital practice in central and local government. And in places transformation has gone deeper. Tools like the Service Standard, and new capabilities in design, are helping to put user-needs first in the development of public services and policy.^[2] And there are rarities like Notify, a shared platform used by over 1500 public institutions to stay in touch with the public.^[3] These are glimpses at what a twenty-first century state would look like.

Still, the main thing we see when we look at the UK government in 2024 is industrial, not digital in nature.

We see policy being treated as separate from, and prior to, delivery; we ‘make’ policies like widgets to be ‘rolled out’. We tie accountability to output-based projects and programmes, not to outcome-based products and services. We see linear decision-making so that feedback loops are slow or non-existent, which makes the way we govern wildly risky. And we see information used in ways that belong in the 1950s – briefings, consultations, periodic data releases – with decisions escalated up the hierarchy to a committee.

Most telling of all, we see stasis in the institutional forms of government. So that while the world’s leading firms have transformed – or rather have been replaced by companies with new forms – the state seems sealed in aspic.

Internet-era organisations are a new species, adapted to a new environment. Cellular in form, they make the mixed-discipline product team the unit of delivery. And they work iteratively, making changes daily, even hourly, and scaling successful changes rapidly via platforms.

The state meanwhile lumbers on, a creature out of time, still formed of the hierarchical, functional silos of government departments. It says it all that, thirty years into the internet-age, we still call it ‘the machinery of government’.

So a new ‘how’ must get us finally beyond a few pockets of good digital practice. It’s high time the state internalised internet-era operating models and mentalities.

Fourth, we’re talking about ‘how’ again because our old methods of government are struggling to gain traction on a new class of problems.

We have ageing societies with endemic chronic physical conditions, we’re driving mass extinctions and warming our climate, and we’re weighed down by mental illness, from depression to anxiety, as millions suffer a quiet crisis of loneliness.

It’s often said that today’s challenges are distinguished by their wicked complexity. And it does feel true that today’s work is somehow knottier than the tasks of an industrial age, from laying sewers to prescribing antibiotics.

Still, I wonder if a better word than complexity is humanity. Or maybe, in the context of climate, ecology. Today’s problems seem complex because they arise from the hidden order – or disorder – of living systems. This makes them hard for our governing institutions to work with, and even to see.^[4]

Our public institutions also struggle to see solutions to these problems, since solutions are so often to be found in the same hidden material. A friendship that helps someone live joyfully despite painful arthritis; a community project that fosters dignity and agency; a city that proves resilient – like an ecosystem – because of its messy diversity.^[5]

The problem isn’t that our old ‘how’ of government overlooks these hidden capacities and wastes them. The problem is that our old ‘how’ is so blind to these capacities that it actively severs or depletes them, often even when we think we’re helping.

We solve problems by isolating them, which works well for bacterial infections but badly for depression. We build silos and specialisms to dock into these isolated problems, which works well for administering taxes but badly for helping a homeless person gripped by addiction. We meet people one-to-one, which can work well for cancer treatment but is bad for helping a lonely elderly person. And we sort people into boxes – the old into care homes, the young into universities – reducing resilience by severing social connections.

Behind all this, we aspire in public policy to a medical paradigm of evidence: a world of control groups, trials, effect sizes, and policy ‘interventions’ that are scaled by replication. That paradigm works well – breathtakingly so – when we use it to make medicines, and for some types of policy problem. But it falters for problems like loneliness, when the best answers are often context-dependent – a local person turns some wasteland into a bustling community garden.

So a new ‘how’ must be less technocratic and more relational. We need to get better at doing things not to people and for people but with people, and at equipping people to do things with other people.

Describing the solution

That gives us a sense of the problem. So what’s the solution? Are we ready to name a new ‘how’? And, more importantly, are we ready to practise a new ‘how’, and to equip ourselves with the necessary tools, capabilities, and institutions?

Here’s the reason I think the answer is yes. The last ten to fifteen years haven’t just been a time of accumulating crises. They’ve also been – and I know this will sound contrarian – a time of unusual intellectual vitality in and around policymaking. A whole suite of new theories, technologies, and techniques have been developed that respond to the problems I’ve described and these approaches haven’t yet been mainstreamed into the way we govern. So we’ve got a lot of fresh material to work with.

I suspect this vitality partly reflects an oddity of our information environment. That on the one hand we’ve never been so swamped in misinformation, but on the other hand we’ve never had such easy access to so much deep thinking, from slow journalism to discursive formats like podcasts.

This is feeding something of an intellectual renaissance, especially in ideas that probe the weaknesses of our old intellectual settlement. There is renewed interest in philosophies from outside the Western analytical canon, from phenomenology to the wisdom traditions.^[6] There is energy in movements like radical ecology and long-termism, and there is a vibrant debate at the intersection of politics and technology, for example around pluralist and collective ways of governing the digital commons.^[7] There is even talk of a new structure of feeling, meta-modernism.^[8]

Don’t get me wrong; there is weirdness here as well as wisdom. But still, these are the kind of upstream ideas that will flow into tomorrow’s common sense.

Meanwhile, back on the ground in policymaking, this last period has seen a host of more practical advances. Behavioural science has matured beyond the narrow but powerful idea of nudges to give us a whole new lens on public policy – a way to understand and shape human systems.^[9] And there have been complementary advances in systems theory and a revival in cybernetics, giving us more sophisticated ways to work in complex systems.^[10]

AI is now turbocharging all of this, just as digital platforms are proving newly useful thanks to the way the pandemic normalised technologies like Zoom. It’s no longer a leap to imagine bringing thousands of frontline workers or patients into a conversation, opening the way to deliberative and participatory democracy. And it’s now easy to draw insights from vast swathes of text and images and other smart data to create new forms of collective intelligence.^[11]

As well as new methods and technologies, we also now have a bank of contemporary practice to learn from. People have spent years, even decades, running relational services; leading outcome-based teams; doing asset-based work in communities; and practising techniques like participatory budgeting, mass deliberation, and collective intelligence.^[12] These methods are now well codified and evidenced in a mature literature, often delivering improved outcomes at far lower cost than traditional methods.

So when it comes to describing a new ‘how’, we don’t need to invent a new paradigm. Our task is to find a good enough way to describe an existing frontier of practice and to embed these practices into the way we govern.

Mission-driven government

How can we best describe this new way of governing? I think the idea of ‘mission-driven government’ is a good place to start.^[13] It already has currency as a contemporary answer to the question: how should we govern?^[14] And so although it doesn’t cover everything, it’s worth asking: how far do missions get us?

The idea of mission-driven government has been pioneered by public intellectuals like Mariana Mazzucato and Carlota Perez. It offers a new middle way, different to Third Way Blairism. With missions we still reject old-school state planning but government is no longer agnostic about the shape of growth. The state’s role is directional, going beyond a transactional state-market relationship that is limited to minimalist regulation and contractual mechanisms like outsourcing. The repertoire of government is extended so that we can engage in other modes: galvanising, enabling, catalysing.

Missions open the way to a broader conception of value. They mean we can pursue outcomes like sustainability or resilience not as afterthoughts but upfront, because they’re important.

Missions also free us to think long-term. They thereby help to correct that great oddity of the modern technocracy – that we argue over every detail of the policy engine without anyone really knowing where we’re going. Missions can therefore help us regain confidence. As liberal democracies we no longer have to leave the work of future-building to single-party states like Singapore or autocracies like China.

These are not just aspirations; they require new capacities in the state. If we want the state to be directional without being directive, we need to get better at using tools like challenge prizes, venture-building, advance market commitments, and mission-aligned regulatory sandboxes. And if we want to cultivate innovation towards a mission, we need to get better at doing enabling work. For example, we can build a data ecosystem to support a mission like home decarbonisation or preventative healthcare.

If we want a more intentional, collaborative relationship between the state and the market, we need to get better at convening people, and that doesn’t mean having some meetings. It means getting serious about the science of facilitation and supporting conversations across sectors with new tools for collective intelligence – curating and sharing rich, live, and granular evidence on what’s working.

If we want to act long-term, we need to correct our jittery instincts in ways that retain democratic legitimacy. We can do this by going beyond GDP to use baskets of metrics for goals related to sustainability, resilience, living standards, and the built environment. And we can add other tools for long-termism: bringing future generations into decisions, running deliberative exercises on challenges like climate change, and pinning our sights on the future with long-term insight briefings.^[15]

That’s a lot already. But when missions go beyond industrial policy into social policy, they also require a new operating model for government. That’s because missions focus on outcomes, not outputs, and especially complex outcomes that we don’t yet know how to achieve.

This makes learning essential to missions. We embark on a mission because we don’t know how to do it – and trying is the only way we’ll learn how. This means we need to practise iterative policymaking. And this in turn means moving away from our traditional model – a world of linear projects, hierarchical silos, and policy as separate from delivery. In its place, we need to empower outcome-based teams to be the unit of delivery.

Iterative policymaking only works if we also have other new capacities too. We need a legal regime that tolerates adaptive management; protocols to experiment ethically; evaluation methods that work for complexity, such as theory-based evaluation; and new skills, like a cadre of ‘policy managers’ – akin to product managers – who can lead blended teams of policy and delivery.^[16]

Finally, if we really mean it, we need to go deeper than this, resetting the bones of the system itself. We need to tie accountability to outcomes, rather than working through the output lens of the audit. We need to align budgets to outcomes, not to functions. And we need our political culture to change too. We need politicians to stop thinking about policies as things to announce in a speech. Which means we need our political leaders to catch up with leadership as practised in the wider contemporary economy: acknowledging complexity, not always claiming credit, learning openly from mistakes.

What missions leave out

For me the takeaway is that missions will get you pretty far – if you govern like you mean it. But even if missions are taken seriously, they won’t cover everything that’s needed from a new ‘how’. So what do they leave out?

I think missions underplay two reform agendas that require dedicated treatment.

The first is a new push on digital transformation, where it’s clear we need a new moment of reckoning. A jolt of energy of the kind that came from Martha Lane Fox’s 2009 review, which led to the original creation of the UK Government Digital Service.^[17] Along with that other vital ingredient: backing from a minister who gets it and has a powerful mandate.

This time, of course, the substance of digital work will be different. Since 2009, the work has fractured into a kaleidoscope of specialisms, so the drive must now come from multiple fronts, but still with unwavering support from the centre.

Some of today’s digital work is still about fixing the plumbing: digital identity, a common core of shared platforms, data architecture and standards, collaboration mechanisms for local digital work. But new challenges also demand our attention: wise uses of AI; work to build civic technologies, such as platforms for reuse and neighbourliness; tools for collective intelligence and deliberation. We also need to focus more on digital’s hostile surroundings – the outmoded rules and mentalities in finance, governance, and leadership that inhibit contemporary practice.

Second, and even bigger than the digital agenda, we need a generational push to increase the state’s relational capacity.

Relational capacity is about the quality of human relationships fostered by our public institutions. It speaks to the capacity of those institutions to do things with people, or to enable people to do things with other people, and is distinct from the state’s technocratic capacity to do things to people or forpeople.^[18]

This work starts from the insight that most of our capacity to overcome societal challenges – especially human challenges, like loneliness – sits in the hidden material of relationships and community agency. Yet our governing institutions are largely blind to this material and often actively deplete it. By focusing on relational capacity, as opposed to technocratic capacity, we ask: how can we build institutions that enhance these human capacities?

I think work to increase the relational capacity of the state has as much potential to improve the human condition as the work we did in the nineteenth and twentieth centuries to increase the state’s technocratic capacity, namely by creating modern administrative bureaucracy.

The goal of this work, to be clear, is not to replace technocracy – many problems still demand it. The goal is to go beyond technocracy; to build a broader settlement that is both more technically adept and more human.

It seems to me relational capacity is the one aspect of the new ‘how’ that is sufficiently important and historically significant to merit a Royal Commission. A cross-party group of experts with authority and time to tackle this biggest of questions.

Building a new ‘how’

It’s time to move beyond New Public Management to focus on building its replacement. This is a point of some significance. It means there is a lot of shovel-ready work to be done and it also says something about the character of the progressive project as it will run from 2025 to 2050 – a phase I think of as ‘second quarter progressivism’.

People sometimes say progressives in 2024 lack a reform agenda. But when it comes to the ‘how’ of governing, it seems to me the opposite is true: the reform agenda is daunting. It is clear and codifiable, it is derived from a mature bank of practice, it is coherent in theory and spirit, and it is well-evidenced. Which is more, dare I say it, than was on offer in 1997.

The devil will be in the delivery. Will missions be pursued wholeheartedly, or will they just mean setting up some new committees? Will digital reform be given a new jolt of energy, and will it have strong enough backing from Number 10 and hard enough levers? Will relational capacity get enough attention, or will it be crowded out by more immediate pressures?

Second quarter progressives should care a lot about these questions, and they can approach them with a spirit of hopeful, self-confident diligence. That’s because the work starts from the premise that we’re operating farbelow our potential capacities – we’re not making good use of today’s best theories, technologies, and talents. This is unsustainable but it’s also simply unnecessary. It requires that we renew some outmoded institutions and build some new ones.

Why do we know this is doable? In part because the diagnosis is similar to the one progressives made a century ago, in the 1920s, as they embarked on work to build the social democratic settlement.

Second quarter progressivism is, in this sense, a fresh chapter in a successful tradition. It’s not a project to make the best of a bad situation, or to regain some yards lost in the 1980s, or to defend or repair an old settlement. It’s a project to develop new forms of collective capacity that are up to the task of governing in the twenty-first century.

James Plunkett is the author of End State: 9 Ways Society is Broken and How We Can Fix It. He is Chief Practices Officer at Nesta and the Behavioural Insights Team.

Notes

^[1] Mance, H.,‘Gordon Brown: “I really didn’t think we could go as far backwards as we’ve gone”’, Financial Times, 14 April 2024. Available at: https://www.ft.com/content/7c0fb9cf-737c-4e43-99c2-4ccae461bc63

^[2] Government Service Standard, GOV.UK. Available at: https://www.gov.uk/service-manual/service-standard .See in particular the emerging discipline of public policy design. Public Policy Design blog, GOV.UK. Available at: https://publicpolicydesign.blog.gov.uk/.

^[3] Notify, Performance dashboard features’ (n.d.) GOV.UK. Available at: https://www.notifications.service.gov.uk/features/performance

^[4] Scott, J.C., 1998, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed, New Haven, CT: Yale University Press.

^[5] Jacobs, J., 1961, The Death and Life of Great American Cities, New York: Random House.  Cottam, H., 2018, Radical Help: How We Can Remake the Relationships Between Us and Revolutionise the Welfare State, London: Virago.

^[6] Nixon, D., 2020, ‘The phenomenology of Merleau-Ponty and embodiment in the world’, Aeon. [online] Available at: https://aeon.co/essays/the-phenomenology-of-merleau-ponty-and-embodiment-in-the-world

^[7] Collective Intelligence Project, ‘Collective Intelligence Project’, [online] Available at: https://cip.org/ . Plurality, 2024. Plurality: The Future of Collaborative Technology and Democracy. [online] Available at: https://www.plurality.net/.

^[8] Vermeulen, T., & van den Akker, R, ‘Notes on metamodernism’, Journal of Aesthetics and Culture, 2, 2010.

^[9] Hallsworth, M., 2023. A Manifesto for Applying Behavioral Science. [pdf] Behavioural Insights Team. Available at: https://www.bi.team/wp-content/uploads/2023/04/BIT_Manifesto.pdf .

^[10] Meadows, D.H., 2008, Thinking in Systems: A Primer, White River Junction, VT: Chelsea Green Publishing. Davies, D., 2024. The Unaccountability Machine: Why Big Systems Make Terrible Decisions – and How The World Lost its Mind. London: Profile Books.

^[11] Nesta, 2024. Centre for Collective Intelligence Design. [online] Available at:https://www.nesta.org.uk/project/centre-collective-intelligence-design/.

^[12] UK Government, 2024. Changing Futures. [online] Available at: https://www.gov.uk/government/collections/changing-futures ;Essex Recovery Foundation, 2024. Essex Recovery Foundation. [online] Available at: https://www.essexrecoveryfoundation.org/.

Public Life, 2024. A Proven Model. [online] Available at: https://www.publiclife.org.uk/a-proven-model.ABCD Institute, 2024. ABCD Institute. [online] Available at: https://resources.depaul.edu/abcd-institute/Pages/default.aspx. Capacity, 2024. Capacity: Making Public Services People Services. [online] Available at: https://thisiscapacity.co.uk/.

^[13] For seminal texts, see Mazzucato, M., 2013, The Entrepreneurial State: Debunking Public vs. Private Sector Myths, London: Anthem Press; and Perez, C., 2002, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, Cheltenham: Edward Elgar Publishing

^[14] For more on mission driven government, see: Plunkett, J., 2024, ‘The Radical How’, Medium. [online] Available at: https://medium.com/@jamestplunkett/the-radical-how-bd5d72ea6418 ; Vinnova, 2022. Mission-oriented innovation – a handbook from Vinnova. [online] Available at: https://www.vinnova.se ; Danish Design Centre, 2024. 8 Qualities of Mission-Driven Organisations. [online] Available at: https://www.ddc.dk .

^[15] See, for example, the way Aotearoa New Zealand has legislated to require long-term insight briefings, think pieces on the future, to encourage stewardship for future generations. Department of the Prime Minister and Cabinet (DPMC) (n.d.) Long-term Insights Briefings. Available at: https://www.dpmc.govt.nz/our-programmes/policy-project/long-term-insights-briefings.

^[16] Davies, J., & Goldie, M. (n.d.). ‘Navigating System Change: Evaluation. Social Finance’,  https://www.socialfinance.org.uk/insights/navigating-system-change-evaluation

See also a series of case studies at Social Finance. (n.d.). ‘Changing Lives, Changing Systems’. Social Finance,  https://www.socialfinance.org.uk/what-we-do/what-does-it-take-to-make-impact-at-scale/changing-lives-changing-systems

^[17] Lane Fox, M., 2010, Directgov 2010 and Beyond: Revolution Not Evolution. [pdf] Cabinet Office.

^[18] See, for example, a 5-year ERC Horizons research project led by Dan Honig. Honig, D., Krishnamurthy, M. & Sharma, K.R. Relational State Capacity: Conceiving of Relationships as a Core Component of Society’s Ability to Achieve Collective Ends. Working Paper for RSC Conference 2024.