Cabinet secretary Sir Gus O'Donnell has urged civil servants to "think about new ways of approaching policy questions", avoiding traditional solutions that depend on regulation, legislation or public spending.

 Speaking in an interview with Civil Service World, O'Donnell said: “I think there is a tendency in the civil service, because we sit here a stone’s throw away from Parliament, to think about legislation as being the first possibility, or to think about taxes or regulations.”

Prime minister David Cameron last week told the Times newspaper’s ‘CEO summit’ that he was considering revising the ‘one in, one out’ rule to insist that ministers must remove two pieces of regulation for each new piece they introduce.

“‘One in, one out’ has been working well, but it’s not enough,” O’Donnell told CSW, adding that the prime minister has asked him to take a particular interest in the ‘Red Tape Challenge’, which runs from April 2011 until 2013.

The challenge invites members of the public to give feedback on regulations surrounding particular sectors or themes, such as health and safety. After each such thematic consultation, relevant ministers have three months to explain why any justifiable regulations should remain.

Sir Gus, working with Cabinet Office minister Oliver Letwin, has been watching the challenge – part of a wider initiative to cut regulations – “very closely”, he said.

He hopes the challenge will not only identify and remove outdated rules, but also help civil servants to design more innovative solutions to the problems previously addressed with regulations. “The creativity is about hearing those voices that we don’t normally hear,” he said, adding that it’s particularly important that officials make an effort to engage with smaller companies.

“The big companies understand how to lobby; they get across their message well,” he said – but government rarely hears from tiny firms: “It’s the individual bed and breakfast owners who I think are going to come up with good things.”

O’Donnell also urged civil servants to take advantage of the networking opportunities presented by Civil Service Live: the event hosted by Civil Service World in London next week. It is, he said, a “unique occasion where we have all different grades from different departments across the country” and people can learn and share ideas. The event will include an innovation zone hosting more than 20 small and medium-sized enterprises (SMEs) from a number of sectors, as well as sessions on engaging with SMEs.

Written by Suzannah Brecknell