This is in response to – or rather, following on from – this from Nigel Stanley at the TUC’s Touchstone blog, itself a response to the highly partisan “Tories must tackle public-sector blight” from the Times, its key quote being:
The other noteworthy development was the publication by the Office for National Statistics of new productivity estimates for the public sector. These showed that, despite a small improvement lately, productivity has fallen most years in the past decade. Calculating output is not easy, but the ONS thinks the average public-sector worker’s output in 2007 was 3.2% lower than in 1998.
Contrast that with the private or “market” sector. Over the same period, again according to the ONS, market-sector productivity rose 22.8%. The difference between the two sectors is striking.
OK, preamble: some jobs are productive in the sense that they feed directly into outputs; some are collective in the sense that they (hopefully) feed into the outputs of others (but at what cost?); and some are essentially unproductive but essential for compliance, meeting external obligations, etc. The balance of these three categories inevitably impacts on an organisation’s productivity.
Inefficiency is everywhere. A consequence of: large and bureaucratic organisations; old, unreformed, or monopolistic organisations; inappropriate managerial and production ideologies; poor leadership; rogue managers; rogue clients with their own inappropriate ideologies (especially Government agencies?).
As Nigel says, it’s not good enough for the left or for unions to pretend public sector productivity doesn’t matter, just because it isn’t always immediately obvious how it should be measured. At the same time, it’s not good enough for others to pretend that private sector productivity is inherently higher, and that privatisation is a solution in itself. Any organisational change has the potential to improve productivity, as well as to damage it, and the higher the level at which the change is initiated (e.g. by Government), the greater the risks, and the smaller the chance that individual workers’ concerns will have been met.
Productivity does matter – it means doing more for your client (whether another company, or the taxpayer, your pupils, or patients), at less cost, or in less time, or with less pollution – and it should matter to everyone involved in the organisation. After all, that’s doing your job as a professional, rather than ticking a box. It’s worth taking the time to find a measure that both staff and managers agree is a fair reflection of their outputs, against which they’re prepared to be held to account in public.
This is what any really useful measure of productivity should reflect. It should also reflect the interdependence of companies, producers, and clients: rather than aggregating company productivity up to industry level, and then up to the great, false public-private divide, there should be one great calculation, rather than one great summation.
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Productivity tells us something about the health and efficiency of our economy, but we shouldn’t be confused by international comparisons. It might be the UK’s choice to have an economy dominated by healthcare provision, and another’s to be dominated by manufacturing. Productivity – accurately measured – may be similar, but perhaps only the manufactured goods can be exported for enough profit to raise that country’s standard of living significantly. Ultimately, productivity is a minor consideration when it comes to the kind of economy and society we want to have.
Naturally I agree with much of this, but I would take issue when you say:
“Productivity does matter – it means doing more for your client (whether another company, or the taxpayer, your pupils, or patients), at less cost, or in less time, or with less pollution – and it should matter to everyone involved in the organisation.”
This isn’t productivity – as you can increase productivity by doing less for your client as long as you reduce your inputs even more. That’s why I find the whole productivity debate really unhelpful.
Another big difference between public and private sectors is that the public sector usually has a universal service obligation. Private sector companies can simply pick and choose their clients, while public servants continue to have to deal with even the most difficult and time-consuming people.