I was pleased to read that the Cabinet Secretary recognises the poor productivity of the civil service, and sees she needs to rebuild the trust of many more taxpayers in the system they have to fund.When I wrote my Productivity Toolkit using the latest ONS figures up to 2025 the UK had experienced 25 years of public sector productivity not growing at all despite massive spending on computers and internet technology and the delivery of many more services on line instead of in person. The first decade of this century saw no gains. The second up to 2019 showed some improvements, which were all lost by the covid lockdowns. The recovery has been only partial leaving us with no growth in productivity for a quarter of century.
The civil service when tackled about this by Conservative and now Labour Ministers have proposed spending substantial sums on AI investment, with promised delayed improvement in productivity towards the end of the current Parliament as a result. This approach which has been adopted by this government leaves public sector costs far too high and escalating, and misses the main point. Why didn’t we capture the benefit of past extensive computerisation? Why did productivity fall off a cliff over covid without recovering fully when lockdowns ended? The AI budget was announced as £3.25 billion over three years with much of the spend this year. There has been no announced plan to ensure this results in savings and improvements, which will require plans to slim the civil service as the money is spent and as technology doe more of the work.
Ministers should engage with the Cabinet Secretary over how the civil service can urgently get back to 2019 levels of productivity, which was a pre AI era. They need to find out why past computerisation did not lead to smaller headcounts. I have never recommended compulsory redundancies. I have always proposed – or implement when a Minister – restrictions on new recruitment. Each time a person retires or leaves the Department should see how to amalgamate or abolish posts to avoid the need for new external recruitment. Where the post is essential another post can be removed with a reshuffle of staff.
We are promised big changes. Who will be the responsible Minister? Will the Prime Minister give it his time and set out a way through? I doubt this. The AI programme needs rescuing to ensure we get better quality at a lower price. So far extra AI spending just helps put the costs up without solving the productivity puzzle.
Productivity toolkit is available as a free download on the Centre for Policy Studies website.