27 July 2010
Public sector productivity fell throughout Labour’s time in government, official statistics show today.
The figures, released by the Office for National Statistics, show that inputs – based on the growth in the quantity of labour, materials and capital assets – grew at an average of 3.2% a year between 1997 and 2008. Outputs – which are measured by activities, with some quality adjustment – grew at a rate of 2.9%, higher than gross domestic product, which grew by 2.7%.
Initial estimates show that productivity in 2008 fell by 0.9%. Output grew by 1.9% while inputs grew by 2.8% during the period.
A spokeswoman for the ONS told Public Finance that the figures did not necessarily signify public sector inefficiency. ‘There are various factors in play,’ she said. ‘You have to look at each individual sector. But you cannot say this is necessarily wastage. There can be time lapses for inputs to translate into outputs, for example.
She said productivity in the Department for Work and Pensions was especially high because of its modernisation plan. After the department was established in 2001, productivity fell until 2003 because of the reorganisation. But, she added: ‘From 2003 to 2007, output was broadly steady while inputs fell substantially. This reflected a combination of the benefits materialising from the modernisation plan and the Gershon efficiency savings implemented by the DWP.
