It’s much harder to quantifiably define productivity for public services than for a profit-making private firm (as Nigel Stanley and Andrew R note), but the ONS has had a go in a new report.
Just for argument’s sake I’ll accept its methods as flawless (though they certainly aren’t, as the report concedes).
The headline finding is that inputs and outputs have both risen, but the former more so: productivity in public services fell by 3.2% between 1997 and 2007. The biggest single contribution to this was from healthcare, which recorded a 4.3% fall in productivity.
George Osborne reacted thus:
These productivity figures tell the damning story of Labour’s wasted years of spending. Gordon Brown poured billions of pounds into public services but blocked any attempt to reform them. The taxpayer has been left with massive debts and little to show for it at the end of this wasted decade.
He doesn’t, to his credit, claim that there has been no improvement in services at all - just little to show, which we can compare with the damning, massive waste. So I thought I’d do that.
The blue line shows the rise in healthcare output, the gold line shows the rise in inputs (both based at 100 for 1997) and the widening gap between them indicates falling productivity:
Osborne thinks the bad news far outweighs the good; I respectfully take the opposite view. Productivity is down 4.3% but the actual output of the health service is up 52.5%.