Executive summary

In the UK, around 20% of Gross Domestic Product (GDP) is accounted for by the outputs of public services, comparable to most other western economies. The recent coronavirus pandemic, and desire to improve public services without increasing spend or taxes has brought the focus back onto public services.

The coronavirus pandemic highlighted that public services can be subject to significant changes which measurement systems designed for more standard times can struggle to accommodate. In 2023 the then Chancellor of the Exchequer asked the National Statistician, Professor Sir Ian Diamond to review the measurement of public service productivity, noting the changing data and policy landscape that may arise in coming years. Automation, the use of Artificial Intelligence (AI) and other forms of innovation also offer opportunities to transform public service delivery.

Measurement of the productivity of public services is historically and internationally acknowledged as being challenging. This is because of the absence of prices to demonstrate the value to citizens of what is produced. This report builds on previous work undertaken by the Office for National Statistics (ONS) to make improvements to published statistics, building on the Atkinson Review: Final report Measurement of Government Output and Productivity for the National Accounts (2005) and the Bean Review (2016).

This report summarises the work of the Review over the last 18 months, presenting the key challenges identified; the cross-cutting methodological improvements the Review has developed; the service specific improvements implemented; and recommendations for further work.

The Review has collaborated extensively with government departments, academics and other bodies across the UK to identify new data sources and innovative methods to improve existing ONS published estimates of public services productivity. The quality, granularity and timeliness of estimates have been improved.

The Review has:

• Delivered a once in a generation update to the Atkinson Principles (2005).
• Improved the quality and granularity of UK public services productivity estimates. Some changes were implemented in published estimates from March 2024; the majority will be incorporated in the Spring 2025 ONS release of data.
• Significantly improved the measurement of Healthcare, Education, Social Security Administration, Tax Administration, Public Order and Safety, as well as made research progress on measuring long standing conceptual challenges in Policing and Defence.
• Improved the timeliness of estimates through publication of experimental annual ‘nowcasts’ since November 2023 to address the two-year lag in data availability and the consequent lack of quality adjustment.
• Introduced publication of quarterly experimental estimates of Healthcare productivity from February 2025, with a plan to extend this increased frequency to other services.
• Developed a plan to improve the coherence of the quarterly and annual estimates to improve understanding for users, which is already underway.
• Influenced the UK recommendations to the United Nations review of the Classification of the Functions of Government (COFOG) to improve the categorisation of government expenditure data essential for measurement of public services productivity.
• Delivered groundbreaking research and insight into public sector managers’ and workers’ views on the opportunities and barriers associated with improving productivity, use of automation and Artificial Intelligence.
• Produced a strategic ‘roadmap’ for incorporation of these public services productivity improvements into the UK National Accounts and Gross Domestic Product, aligned with the wider ONS planning for implementation of the new System of National Accounts 2025.

With continued focus, further improvements should be achievable in 2026 as well as beyond. It will be important for the ONS to continue collaboration with the growing network of service-specific bodies exploring public service productivity measurement at more granular levels, to ensure consistency and transparency of data in the public domain. The coherence of devolved governments’ data underpinning the UK-wide public service productivity estimates could be improved if sufficient user need exists and investment into development is made available.

A significant number of farther reaching recommendations for further work have been identified. Some impact or depend upon other government departmental initiatives, and may need additional funding to bring to fruition.

The Review offers a substantive step-change in UK public services measurement, which over the next few years can be applied into the UK National Accounts as well as productivity measures, to support the coherence and accuracy of the UK economic measurement system.