Headlines: June 5th, 2003

The Office for National Statistics has produced its first estimate of Government productivity and concluded that the trend is downwards. Between 1995 and 2001, government output went up by 11 per cent whilethe volume of its inputs rose by 14 per cent. Over this period, output growth has therefore fallen behind the increase in inputs, implying a fall in productivity.Although this suggests that resources are being used less efficiently the ONS is quick to point out that a crude comparison of inputs to outputs leaves a number of unanswered questions. For example better fire fighting could be achieved by more fire inspections, which would show an as input, but the outcome could be influenced by preventive activities such as encouraging the use of smoke alarms and improving building standards. Similarly, improved exam results is an outcome which might result from better teaching, but other factors influencing the situation include the existence of the internet, better public libraries and more support from parents.

The ONS will continue to refine its measures and produce another report next year.