Don't blame public servants for Britain's woeful productivity

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

There are some obvious culprits for inefficiency, such as a bureaucratic culture that squashes innovation. Oncologist Pat Price told this paper about a colleague who fought for years to persuade NHS managers to spend about £3,000 on a software package that saved the need for a whole member of staff. Sadly, a short-term approach to spending too often seems to stymie future productivity gains. A headteacher told me how, when trying to reduce the cost of her school’s new gym, the Education and Skills Funding Agency chose to cut the solar panels, an investment that would have permanently reduced the energy costs.

And public-sector organisations increasingly pursue wasteful activities unrelated to their aims. Waiting for a hospital appointment, a friend overheard an old gentleman being asked by a nurse if he might be pregnant. Laughable, perhaps, but public-sector diversity programmes 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 be seeking to repeat our successful Covid vaccine-procurement strategy by creating external task forces that circumvent bureaucracy and procedure. Providers should also be rewarded for outcomes rather than activity, as my colleague Danny Kruger has proposed.

We certainly need to challenge some aspects of public-sector working. In the light of so many backlogs, it’s hard to defend continued work-from-home mandates and trials of a four-day week. And it’s galling for the self-employed to lose trade due to striking public-sector workers, when it is these very business owners whose profits are essential to pay their salaries.

But while there are clear structural failings in our public sector, are its workers really so different? We all share the same human nature; we work best when there is a direct relationship between effort and reward. But, for many public servants, this relationship has become severely strained. I don’t just mean financial reward, but also the emotional reward that comes from work that is achievable and meaningful.

For many frontline workers, “morale” has reached a nadir. Teachers testify to an unimaginable level of need in their schools, with seven-year-olds still in nappies and many children so emotionally unstable that they require full-time support. And GPs – seeing record numbers of very sick patients – are quitting the profession, fed up of constant public attacks. People perform better when they are cheered on; few remain motivated in the face of incessant criticism.

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

All Western nations are increasingly unable to meet their age-related spending commitments. This is why sluggish private-sector productivity should also cause concern. Our current economic model – debt-funded, regionally unbalanced and with an alarming trade deficit – has run out of road. Mass migration has choked per-capita growth, disincentivising investment in capital and skills, the core ingredients for productivity. If we want world-class public services, we need world-class economic growth. This means expanding R&D tax-relief schemes, fostering a culture of risk-taking venture capitalism, and creating viable industrial strategies for the productive industries in which Britain can excel.

We should resist the temptation either to demonise or canonise public servants. Every system is designed to produce certain results, and it is the system that is responsible for woeful productivity. Our interdependent public and private sectors both need urgent reform.

Miriam Cates is MP for Penistone and Stocksbridge