Overview
- Official ONS data for the three months to June show total public service productivity down 0.7% year on year, with healthcare falling about 1.5%.
- Public service inputs rose 2.5% year on year while outputs increased 1.8%, producing the largest quarterly productivity decline since late 2022.
- ONS annual estimates were revised to show productivity up 0.9% in 2023 and 0.3% in 2024, yet still around 3% below 2019 overall and about 7.8% below in healthcare.
- Labour and NHS England dispute the quarterly interpretation, pointing to NHS data indicating a 2.4% productivity rise in the first four months of the financial year.
- Media reporting indicates the OBR is likely to cut productivity assumptions, a move that could add roughly £20bn–£21bn to the Treasury’s shortfall and increase pressure on Chancellor Rachel Reeves.