Public sector productivity flat from 1997

Tim Wallace
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THE ENORMOUS rise in government spending from 1997 was not matched with any gains in efficiency in the public sector, official figures revealed yesterday.

In all of Labour’s 13 years in power, state-sector productivity stayed flat according to the Office for National Statistics. In the period state spending rose almost 50 per cent.

There were some variations from year to year – productivity grew at its fastest in 1998 at 0.7 per cent, and fell most in 2002 at 1.3 per cent – but average productivity growth was flat.

The ONS uses spending as a proxy for inputs, which covers labour, goods and services and capital used in the state sector. Outputs include activities performed and services delivered, as well as quality adjustments in healthcare and education.

Those two departments account for 55.5 per cent of spending in total.

Productivity in healthcare increased by an average of 0.5 per cent per year over the period, while education saw an increase of 0.3 per cent annually.

Falls came in adult social care at 1.7 per cent, children’s social care at 0.9 per cent and public order and safety at 2.3 per cent.

However, around one-third of spending is locked in at a set level of productivity – output in areas like defence and policing is measured as the same level as inputs, meaning no change is ever recorded in productivity and so dragging the overall figure closer to zero.