Public sector must ban working from home or it won’t function
Calls remain unanswered. Emails are routinely ignored. Appointments are missed, meetings are rescheduled and the post doesn’t get sent out. We already knew the UK had a dismal record on productivity, with output refusing to rise and the economy flat-lining for year after year. And yet, far from being improved, it is getting worse. In the public sector, which accounts for a larger and larger share of the overall economy with every year, it is now in absolute decline – and it is dragging the whole country down with it.
There are lots of explanations for that. The unions are too powerful and resistant to change. Management is centralised and enterprise and initiative stifled. Targets are top-heavy and, given that its services are typically free at the point of delivery, there is little incentive to innovate. But by far the most obvious is staring at us in the face: working from home. Until the Government finds a way to get the 5.7m people on its payroll back into the office every day, the public sector will never function properly.
We never expected the public sector to have an outstanding record on productivity. Ministers have been giving speeches for years about how systems need to be more responsive and standards have to be improved. Margaret Thatcher drafted in leading businessmen to try to kick some enterprise into the system, while privatising everything she could in the belief that shareholders would always
‘The UK can’t afford for public sector output to keep collapsing at such a terrifying rate’
do a better job than the state. Tony Blair and Gordon Brown introduced targets, appointed “czars” and created “delivery units”, in the belief that top-down Stalinist central planning would fix the issue. David Cameron mainly left it to Nick Clegg to worry about – which, in practice, meant forgetting about the whole issue – while for Boris Johnson the detail was too much hassle to even attempt to grapple with. In different ways, British governments have struggled with the issue for years.
Today the challenge is not how to improve public sector productivity.
It is how to stop it from completely collapsing. There has been plenty of anecdotal evidence that each person working for the Government is producing less than they used to. Want to book a driving test? It will take four to six months to get one, compared with, for example, a private sector eye test, which I could easily book for tomorrow from a dozen different providers. Or a new passport? You will have to wait up to 10 weeks – and that is the official figure. Or process a planning approval for some changes to your home? Don’t expect anyone to get back to you soon. Or your rubbish collected? Many councils have cut back to one pick-up every three weeks, and some to one in four, halving output on what was the norm a few years ago. Even HMRC, the body that collects the money to pay for everything, has more or less given up on answering the phone while letters remain unopened for weeks. Even when they are not on strike, services are clearly deteriorating.
And now the official figures confirm output is in freefall. In the latest quarter, public sector productivity fell by 1.3pc according to the Office for National Statistics. That compares with a 0.1pc increase in the private sector, hardly a stellar result, but at least something. Overall, government output per person is now 7.4pc below its pre-pandemic level, compared with a 1.6pc increase economy-wide. The Centre for Economics and Business Research estimates that the state will have to spend an extra £73bn just to keep pace with declining output per person. Even more alarmingly, at the current rate of decline, public sector output will have dropped by 20pc in the next decade, and 34pc measured over two decades. We have already been desperately trying to work out how to afford public services that voters keep demanding. With falling productivity, an already difficult task will become impossible.
There are potentially lots of different ways to fix that. We could try automating where possible, with robots collecting the rubbish, or shifting driving tests into the metaverse, although you would need a lot of confidence in the technology to feel confident that was a safe option. We could devolve power to local managers, trusting them to deliver on the ground, a technique that is standard practice in the private sector, and reversing the top-down targets that Gordon Brown was obsessed with. We could try linking pay to output, again best practice in the private sector, although the unions would no doubt fiercely resist that. Any of them might help a little at the margins. But there is only one big change that will have any real impact. Ending working from home.
It is the public sector that has abandoned the office most completely. Last April the then minister for Brexit opportunities and government efficiency, Jacob Rees-mogg, left a note on civil servants’ empty desks that read: “I look forward to seeing you in the office very soon.” In Wales, only 10pc of the devolved administration’s 5,200 civil servants attended the office in September, yet it refused to cut back on its costly office space. Only 16pc of Home Office and HMRC staff were working in the office during the first week in January. The Foreign Office was only 50pc full (it’s lucky there isn’t a war being fought in Europe or anything!).
The evidence is now incontrovertible. The rise in home working has correlated with declining output. Until that is reversed, nothing is going to change. The UK can’t afford for public sector output to keep collapsing at such a rate. The state accounts for 44pc of GDP. It employs almost a quarter of the workforce, with many more working for organisations that rely on government funding. Until we get the public sector back into the office there is no prospect of the economy ever growing again – and nothing else will have the same kind of potential impact.