Civil servants are not to blame for Britain’s poor productivity

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If you were one of 66,000 patients forced to wait more than two months for your first cancer treatment after being referred last year, you don’t need the Office for National Statistics to tell you that our public services are in crisis. Despite record funding levels, public sector productivity has fallen 6% since before the pandemic.

There are obvious culprits to inefficiency, such as a bureaucratic culture that stifles innovation. Oncologist Pat Price spoke in this article about a colleague who fought for years to persuade NHS officials to spend around £3,000 on a software package that obviated the need for an entire member of staff. Unfortunately, a short-term approach to spending too often seems to hamper future productivity gains. A headmistress told me how, in trying to cut the cost of her school’s new gymnasium, the Education and Skills Funding Agency chose to shut down the solar panels, an investment that would have permanently reduced energy costs.

And public sector organizations are increasingly pursuing wasteful activities unrelated to their goals. While waiting for a hospital appointment, a friend overheard an old man being asked by a nurse if he might be pregnant. Laughable, perhaps, but public sector diversity programs are estimated to cost billions of pounds a year.

There are no easy solutions to any of this. For the most critical issues, such as cancer care, we should seek to replicate our successful Covid vaccine procurement strategy by creating external task forces that bypass bureaucracy and procedures. Providers should also be rewarded for results rather than activity, as my colleague Danny Kruger has proposed.

We certainly need to question certain aspects of working in the public sector. In light of so many backlogs, it’s hard to defend the continuation of work-from-home mandates and four-day-week trials. And it’s infuriating for the self-employed to lose work due to strikes by public sector workers, when it’s the same business owners whose profits are essential to pay their wages.

But if there are clear structural flaws in our public sector, are its workers really that different? We all share the same human nature; we work best when there is a direct relationship between effort and reward. But, for many officials, this relationship has become very strained. I’m not just talking about the financial reward, but also the emotional reward that comes from doing achievable and meaningful work.

For many frontline workers, morale is at rock bottom. Teachers are witnessing an unimaginable level of need in their schools, with seven-year-olds still in diapers and many children so emotionally unstable they need full-time support. And GPs seeing record numbers of seriously ill patients are leaving the profession, tired of constant public attacks. People do better when encouraged; few remain motivated in the face of relentless criticism.

The right wants more goals and the left wants more money. But the targets breed corruption and despite exorbitant taxation, there is no more money. The immediate cause of public sector paralysis is the sheer volume of complex demand generated by an overweight, aging, anxious, post-lockdown population with one of the highest family breakdown rates in the OECD. We must reduce the demand on the state by restoring the protective effect of families and communities and improving personal health.

All Western countries are increasingly unable to meet their age-related spending commitments. This is why the low productivity of the private sector should also be of concern. Our current economic model, financed by debt, regionally unbalanced and with an alarming trade deficit, is at the end of its tether. Mass migration has stifled per capita growth, discouraging investment in capital and skills, essential ingredients of productivity. If we want world-class public services, we need world-class economic growth. This means extending tax relief schemes for R&D, fostering a culture of venture capital and creating viable industrial strategies for productive industries in which Britain can excel.

We must resist the temptation to demonize or canonize public servants. Every system is designed to produce certain results, and it is the system that is responsible for dismal productivity. Our interdependent public and private sectors both need urgent reform.

Miriam Cates is MP for Penistone and Stocksbridge

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