Public services face an unprecedented set of challenges. But by involving individuals and users in the design ande delivery of public services through co-production, services can be more effective, efficient and sustainable.

There is no doubt that the idea of co-production’ has arrived in the UK. Policymakers are using the term in their speeches, and it is increasingly appearing in Whitehall strategy documents and think-tank reports.

This is important and exciting for those of us who have been trying to shape a new conversation along these lines, arguing that the key to reforming public services is to encourage users to design and deliver services in equal partnership with professionals. The time seems to have arrived for the idea that the users of public services are an immense hidden resource which can be used to transform services – and to strengthen their neighbourhoods at the same time.

The reason for this interest is simple. While policymakers might not always be able to acknowledge it, previous approaches to the reform and improvement of public services have largely run their course. In some areas, they have produced important improvements, certainly. But our public services face an unprecedented set of challenges: increasing demand, rising expectations, seemingly intractable social problems and, in many cases, reduced budgets. Reform can’t confront these challenges effectively; radical innovation in public services now needs to move from the margins to the mainstream. The question is what analysis and principles should inform this radical innovation.

As we argue in this paper, co-production as a new way of thinking about public services has the potential to deliver a major shift in the way we provide health, education, policing and other services, in ways that make them much more effective, more efficient, and so more sustainable.

There is an emerging co-production sector in the UK which is enormously vital and innovative, even if it is not yet quite aware of itself. It is a crucial aspect of the emerging debate on localism and mutualism in public services.

The difficulty is that, as always with new ideas, coproduction is often used loosely to cover a range of related concepts. There is no agreed definition, nor are many people yet clear about where the idea came from or its full implications. We are in the early stages of understanding how co-production can transform mainstream public services – and yet there is an understandable urgency amongst policymakers to find new approaches that work. This is then a potentially creative moment for public services, as well as a dangerous one.

This is the challenge of co-production – it provides a strong critique of existing approaches to reform, but it requires a stronger agreed understanding and evidence base in order to make a real impact in policy and in mainstream public services.

This paper provides the basis for both a better understanding and a stronger evidence base for co-production. Given the current diversity of uses of the term, this paper also explains what coproduction isn’t. It demonstrates why, properly understood, co-production looks set to create the most important revolution in public services since the Beveridge Report in 1942. It diagnoses why public service reform is stalled, and why a radically new approach – sharing the design and delivery of services with users – can break this logjam and make services more effective for the public, more cost-effective for policymakers, and more sustainable for all of us.

One paper doesn’t provide all of the answers we need. In the spirit of co-production, further progress in this area needs to be based on the ideas and experiences of public service professionals and the communities they work with. This publication marks the beginning of a partnership between the nef (new economics foundation) and NESTA to develop the evidence base on co-production – working with and learning from frontline practitioners in particular – and from this to develop proposals to promote a more positive environment for co-production in our public services and in policymaking.