Opinion – The Productivity Puzzle – Under the bonnet | The Economist

This outstanding, must-read, article from the Economist looks at explaining Britain’s poor productivity record. Check it out!

Under the bonnet | The Economist.

Whilst I recommend the Economist article for some excellent insights into key sectors, it sadly misses the most obvious reason for poor productivity, compared to both other countries and Britain before the 2008 financial crash.

The Economist fails to identify just how bad Britain’s public sector productivity is compares poorly to international competitors. Despite George Osborne‘s bacon-slicer austerity program, UK public sector productivity is still the black sheep of UK productivity. Before I retired from mainstream activities, I was once very close to this sector. In my view, ministers and the Cabinet Office in the previous government seriously botched effective reform. But if you look at the professional background of the latest ministerial team at the Cabinet Office, the simple conclusion is more bacon-slicer austerity and little genuine reform.

Given the weakness in leadership in Britain’s public sector, the meddling of politicians and other powerful stakeholders, like unions, outsource and technology providers, plus the consulting sector, the best way to improve public sector productivity is:

  • Massive consolidation across both local and central government, eliminating vast layers of bureaucracy
  • Investment in national vanilla front and back-office service centers
  • Outsourcing  and possibly offshoring ALL non-strategic activities.

It makes sense to retain policy activities in the public sector, otherwise the case is overwhelming for transferring the rest of Britain’s public sector to the private sector.


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