New Measures of Public Service Productivity: Lessons and Results from the United Kingdom

Since the early 2000s, governments, including that of the United Kingdom, have increasingly focused on measuring and improving public sector productivity. In response, the Office for National Statistics (ONS) has been tasked with developing and refining statistical methods to reflect ongoing reforms in public service delivery. In 2025, a new review concluded, which addressed the evolving landscape of public services, with particular reference to the impact of the Covid-19 pandemic. Building on the Atkinson principles, the review introduced innovative methodologies which will be of international interest. These methods provide stronger evidence that public services can achieve both productivity gains and losses, depending on capital investment and funding stability. Applying the latest methods developed under the review suggests that UK GDP growth could have been 0.1 percentage points higher annually since 1997, driven by higher public sector output growth of around 0.5 percentage points per annum. This challenges the long-standing assumption, rooted in Baumol’s Cost Disease theory, that public services are inherently non-progressive. The Review’s findings are particularly timely given the 2025 revision of the System of National Accounts (SNA), which allows for quality adjustments in measuring public service output. This article highlights the importance of adopting these improved methodologies internationally, as part of the upcoming SNA implementation cycle, to better capture the true value and performance of public services.