Public service productivity, quarterly, UK: April to June 2023

• Public service productivity has remained relatively stable since Quarter 2 (Apr to June) 2021. 

• Public service productivity fell by 0.6% in Quarter 2 2023 compared with Quarter 1 (Jan to Mar) 2023, following an increase of 0.3%. 

• Public service productivity fell by 1.1% in Quarter 2 2023 compared with the same quarter a year ago. 

• Experimental annual estimates suggest that public service productivity rose by 3.2% in 2022 following an increase of 9.1% in 2021, representing a "bounce-back" from the coronavirus (COVID-19) pandemic; however, this did not return UK public service productivity to its pre-pandemic peak.

This release presents experimental estimates for total public service productivity, inputs and output. This provides a short-term, timely indicator of the future path for the annual National Statistics estimates of total public service productivity, which apply quality adjustments to output data and are produced with a two-year lag. See our Public service productivity article for more information. 

This release contains data that are consistent with our Quarterly national accounts bulletin. Therefore, in line with the National Account Revisions Policy, this release now includes revisions to 2022 and 2023 as a result of Blue Book 2023 methodological changes, improved source data and additional updated data. 

The public service productivity estimates show revisions in the following service areas:  

• social protection: improved measurement of adult social care included in our Improvements to non-market adult social care output methodology 

• healthcare: our Improvements to healthcare volume output in the quarterly national accounts methodology now includes community, mental health and ambulance services, and an update to the annual healthcare benchmark which uses more detailed and comprehensive data 

• education: estimates of pupil absence from Quarter 2 (Apr to June) 2020 have been revised down, leading to higher volume estimates of final consumption expenditure since this quarter; following National Account revisions policy, figures have been updated from Quarter 1 (Jan to Mar) 2022 onwards, while estimates for Quarter 2 2020 to Quarter 4 (Oct to Dec) 2021 will be updated at the earliest opportunity  

This bulletin is the first publication on public service productivity since the beginning of the National Statistician's Public services productivity review. The review is being undertaken following a commission from the Chancellor of the Exchequer asking the National Statistician to review and improve how public service productivity is measured.  

We are now working to improve both our data sources and our methods, to ensure we capture changes in productivity across the public sector in a better and more consistent way. Our first findings will be prepared for the autumn statement, with the project expected to run over two years.   

Details on data and methods are described in Section 8: Measuring the data. 

In reading the following statistics, please consider that unless stated otherwise, all growth rates reported in this article are indexed to the base year 1997.

As seen in our previous Public service productivity bulletin, public service productivity has remained relatively stable since Quarter 2 (Apr to June) 2021. Inputs have grown 0.5% over this period, while output has grown 1.7%, and productivity has increased by 1.1%.

This, however, masks a degree of short-term volatility. For example, productivity fell by 0.6% in Quarter 2 2023 compared with the previous quarter. This is because of inputs increasing by a proportionately larger amount than output (2.2%, compared with 1.6%).  

Both inputs and output increased for: 

• healthcare 

• social protection 

• military defence 

• central government 

• justice and fire (output flat 0.0%) 

Education saw a fall in inputs and a growth in output, while local government saw a fall in both inputs and output. 

Military defence, central and local government service areas all adopt an "output-equals-inputs" convention. For more information, see our Sources and methods for public service productivity estimates methodology. The "output-equals-inputs" convention states that output volume is assumed to be equal to the volume of inputs used to create them. This is applied where direct observation of output is not possible. In this case, productivity is constant. 

Quarterly estimates should be interpreted with caution because of the volatile nature of quarterly inputs estimation.

Productivity for total public services was 1.1% lower in Quarter 2 (Apr to June) 2023 compared with the same quarter a year ago. Over this period, inputs increased by 2.4% while output increased by 1.3%. 

The main services causing the increase in this quarter's inputs were: 

• healthcare 

• social protection 

• military defence 

• central government

Please note that our Public service productivity estimates are subject to revisions because of improvements to source data and methodology.  

In general, because changes in productivity represent long-term structural trends, we advise looking at changes over a longer time period. This helps to smooth any short-term fluctuations. Comparing quarters with the same quarters a year ago provides a rolling annual estimate of productivity and is, therefore, a good indication of the future path of the National Statistics annual estimates. These estimates include additional data sources that are less timely than those used for quarterly estimates. 

Figure 4 places the inputs, output, and productivity in an annual context over a longer time series, combining our annual estimates from our Public service productivity article between 1997 to 2020 with experimental data from 2021 onwards.  

Experimental estimates suggest that annual total public service productivity rose by 3.2% in 2022, reflected by an increase of output by 2.8% compared with a decrease in inputs of 0.4%. This followed an increase of 9.1% in 2021.  

The coronavirus (COVID-19) pandemic had a strong impact on public services. In 2020, inputs rose, reflecting the extra resources provided to public services to deal with the pandemic. Conversely, output fell in 2020, as many services were delivered in a different way than in 2019, with additional costs and mandatory restrictions present for certain services.  

It is worth noting that the pandemic caused widespread cost pressures and disruption to public service outputs, including: 

• new safety measures 

• urgent healthcare treatments taking priority 

• remote consultations 

• remote learning within education 

• support for care homes 

• restrictions to courts and tribunals 

In 2021 and 2022, output grew faster than inputs, as fewer restrictions were present and new services such as test, trace and vaccinations were introduced. 

Therefore, comparing pre- and post-pandemic productivity is difficult and estimates of this nature should be treated with caution.

Output estimates use data on changes in the quantity of various services delivered, but do not include data on changes in the relative quality of these services. Data including quality adjustment for 2021 will be published with a two-year lag, as many of these quality factors require data collected with a lag. 

These experimental estimates for 2021 and 2022 should be treated with caution until our total public service productivity annual estimates are available for these years.

In line with the National Accounts revisions policy, all time periods in the dataset are open for revision.

Figure 5 shows the estimates published in the previous bulletin, and the revised estimates on Public service productivity, following the changes mentioned in Section 2. About these estimates.

For more detailed information on revisions to inputs, output and productivity for quarter-on-quarter and quarter-on-same-quarter a year ago growth rates, please see Table 4 in our accompanying dataset.

Public services 

These are services delivered by or paid for by government (central or local). If paid for by the government, they may be delivered by a private body – for example, the provision of nursery places by the private sector, where these places were funded by the government. 

Direct output measurement 

Using a cost-weighted activity index to estimate the non-quality adjusted output of a service provided, such as the number of students in state schools, adjusted for attendance to produce an estimate of total hours of schooling delivered each year. Differs from indirect output measurement, where output is assumed equal to inputs. 

Quality adjustment 

A statistical estimate of the change in the quality of a public service, using an appropriate metric, such as safety in prisons as part of the public order and safety adjustment.  

Classification of the functions of government 

The Classification of the functions of government (COFOG) is the structure used to classify government activities. It is defined by the United Nations Statistics Division. 

Service area 

The way we refer to the breakdown of public services into nine areas, closely following COFOG. 

Intermediate inputs 

Also referred to as "goods and services", or "intermediate consumption" (the UK National Accounts term). Intermediate inputs include goods and services used up in the provision of a public service, such as utilities, energy, professional services and medical supplies, among others. 

Deflator 

A price index used to remove inflation effects from current price estimates of expenditure to provide a volume estimate.

Data sources 

Different sources and methods are used to produce the experimental quarterly statistics and the National Statistics. 

This release uses expenditure data from quarterly UK National Accounts, split into seven categories: 

• health 

• education 

• social protection 

• justice and fire 

• military defence 

• central government services 

• local government services 

Data sources and methods differ from the annual publication, depending on data availability and appropriateness on a quarterly or annual basis. For example, some inputs measures that are available on an annual basis as direct measures are not available on a quarterly basis. These missing quarterly direct input measures may only be obtainable using indirect measures (deflated expenditure). 

The National Statistic also uses different deflators to those used in this release to estimate those volumes of inputs. As such, estimates are not directly comparable between the quarterly and annual publications. 

This release does not provide adjustments for the quality in public service output whereas the National Statistic does for some public output. 

Estimates of productivity, inputs and output up to 2020, are reported on an annual basis and use data from our Public service productivity, total, UK, 2020 article. Further information about the annual National Statistics release can be found in our Public service productivity: total, UK Quality and Methodology Information (QMI). 

Experimental estimates differ from the annual estimates, as described in Section 9 of our Sources and methods for public service productivity estimates methodology. Importantly, experimental estimates do not apply quality adjustments.  

Revisions 

In line with the National Account revisions policy, this release now includes revisions to 2022 and 2023, as a result of Blue Book 2023 methodological changes,improved source data and additional updated data. Section 2: About these estimates describes these changes.   

Measuring public service productivity 

Productivity is calculated by dividing output by the respective inputs used to produce it. Therefore, productivity will increase when more output is being produced for each unit of inputs used. Estimates of inputs, output and productivity are given both as growth rates between consecutive periods and as indices, showing the cumulative trend over time. 

Experimental quarterly estimates of productivity are seasonally adjusted. In official statistics, it is common for the time series to have regular, repeating, predictable variation (for example, the increase in retail sales in December). To help users interpret the series, national statistical institutes use a statistical method called seasonal adjustment to remove these effects. We use the X11 algorithm in the X-13ARIMA-SEATS software to perform seasonal adjustment. Time series experts in the Office for National Statistics (ONS) review the seasonal adjustment each year. This includes checking for the impact of outliers. For the public sector productivity series, the coronavirus (COVID-19) pandemic period has been closely analysed for such outliers. The outliers are only included if they are judged by a time series expert to improve the seasonal adjustment. This judgement will include consideration of the charts, statistical tests, and diagnostics. For the pandemic period, some series have additive outliers used to take account of the impact, while others have used level shifts. The annual seasonal adjustment reviews are conducted by time series experts, and all work is independently quality assured by another time series expert before leaving the team. 

For total UK public services, estimates of output and inputs are made up of aggregated series for individual public services, weighted together by their relative share of total expenditure on public services (expenditure weight). Inputs are composed of labour, goods and services, and consumption of fixed capital.  

Expenditure data, used to estimate most inputs growth, are taken from our Gross domestic product (GDP) quarterly national accounts, UK: April to June 2023 bulletin. The quarterly national accounts also provide estimates of government output, based on direct measures where they are available and indirect measures where they are not. 

Public service productivity is measured differently to labour productivity and multi-factor productivity and is not directly comparable. It reflects the volume of services delivered to end users relative to the volume of total inputs (which comprise of labour, intermediate consumption, and capital). The measure is dominated by health and education services because of their relative size.  

The estimates are not a measure of the productivity or efficiency of an individual worker within the public sector. For instance, while children within school received fewer hours of education at the start of the pandemic, a teacher may still have had to undertake additional work to modify lesson plans for remote learning.  

Similarly, the resource required to deliver some services within the NHS may have increased because of additional restrictions, such as the use of personal protective equipment (PPE), but the overall volume of NHS services may still have declined. 

Public service productivity within this statistic only focusses on the education received by end users, or the healthcare services received by end users, rather than the productivity of an individual teacher or an individual nurse to deliver a discrete task. 

These estimates should be considered a first estimate on public service productivity. The Office for National Statistics (ONS), together with HM Treasury and other government departments will continue to develop and improve its methods, which may lead to revisions of these preliminary estimates.