Given the tight fiscal position that the UK now finds itself in we expect to see greater use of innovative financing methods to underpin public expenditure over the next few years. The 2010 Spending Review has asked Departments specifically to consider alternatives to state funding, and whether non-state providers can be paid to carry out public sector activity according to the results they achieve.

One innovation, invest to save, has been applied on a small scale for over 10 years now.  However, investing now to generate future savings in public expenditure on a bigger scale has proven harder to deliver.  In the first of A4e Insight’s Blue Touch Papers, we review the application of invest to save in the welfare sector and explore the barriers to its wider implementation.  In the next Blue Touch Paper in the series, we will review the application of invest to save across further areas of public spending and different financial models designed to overcome the barriers.