Reinvent funding and delivery mechanisms - How we get there

Transforming how government works also means transforming how it funds and delivers work.

Across the Welsh public sector, the default model is still large, time-limited programmes that rely on cumbersome, multi-stage business cases. This process is slow, expensive and based on guesswork. It forces teams to commit upfront to fixed plans rather than testing risky assumptions or responding to real-world feedback.

Small projects face the same scrutiny as major programmes, making it harder to start small and scale what works. To bypass the rigidities of these larger programmes, Wales has increasingly relied on short-term grant funding pots. While intended to encourage innovation, these funds are often too brief to sustain successful initiatives or diverted to prop up failing projects, undermining their original purpose.

Combine this with the year-by-year operational settlements, organisations have no clear idea what their overall funding looks like. Continuous improvement is squeezed out by crisis-mode spending and an over-focus on “new” instead of maintaining what already exists.

The results? Ballooning costs, fragile systems, and failed delivery.

Instead of pouring money into one-off initiatives, the next Welsh Government should invest in continuous, outcome-driven delivery – supported by funding models that reward stability, learning and long-term value.

The next Welsh Government should:

A. Fund teams not projects

Modern services require continuous care, not stop-start projects.

Time-limited funding encourages short-term thinking and rewards outputs, not outcomes.

Services decay once projects end, and the systems left behind often become brittle, outdated and expensive to maintain.

Welsh Government should adopt a Product Operating Model, replacing project-based funding with long-lived, cross-functional product teams that own public outcomes.

These teams should:

be multidisciplinary, combining policy, operations, design, technology, delivery and user research
be empowered to make operational decisions within their budgets
work iteratively, with tight feedback loops and space to continuously improve

The next Welsh Government and the new Chief Digital Officer should start by establishing 4 or 5 high-impact product teams in year one – focused on cross-sector collaboration, and solving shared problems faced by local authorities, the NHS and central government.

B. Simplify and modernise procurement practice

To support better delivery, Wales needs more agile, modular and SME-friendly procurement systems.

Current procurement often assumes we can predict the future, locking government into rigid, long-term contracts with limited flexibility. This slows innovation and increases reliance on large vendors based outside of Wales.

Welsh Government should:

redesign procurement policy and culture to support smaller, outcome-driven contracts
lower barriers for small companies and create space for incremental delivery
break up large monolithic procurements and reduce dependency on “strategic suppliers”

This should be underpinned by a Technology Code of Practice, setting out red lines that:

limit maximum contract values and lengths
end automatic extensions and bundling of unrelated services
require the use of open standards and modern cloud infrastructure

In parallel, government should build strong market intelligence to inform buying decisions and stimulate local supply chains.

Smarter procurement isn’t just about efficiency. It’s about building a Welsh tech economy that serves the public good, maintains digital sovereignty, and reduces the reliance on large, extractive technology vendors.

C. Introduce radical transparency

Public trust in government depends on understanding not just what gets delivered, but how.

Traditional accountability tools like Senedd committees, audits, ministerial Q&A are important, but often retrospective and slow. Meanwhile, top-down communications like press releases and milestones rarely show the messy, iterative reality of delivery.

The Welsh Government should lead a culture shift toward radical transparency, where teams work openly and share real-time information about their progress, thinking and decision-making.

That means:

publishing service performance and delivery data in the open
sharing how user feedback shaped decisions
explaining challenges, trade-offs and learning as they happen
regularly publishing digital and technology procurement pipelines

This shift should start with the new product teams and be championed from the top by the First Minister, Minister for Digital, and Chief Digital Officer for Wales.

Understanding how government’s internal “plumbing” works and making that visible is critical for rebuilding public confidence and democratic accountability.