UK public sector productivity goes from bad to worse, ONS data shows

(Reuters) - Public sector productivity, a major shortcoming in Britain's economy, worsened in late 2023 and remained a long way off its pre-pandemic levels, the Office for National Statistics said on Friday.

Productivity in the public sector, dominated by education and healthcare, fell 1.0% between the third and fourth quarters of 2023 and was 2.3% lower than a year ago.

Public sector productivity measures the volume of services delivered against the volume of inputs - like salaries and government funding - that are needed to maintain those services.

It remains 6.8% lower than its pre-pandemic level, and far below the norms of even 25 years ago.

Finance minister Jeremy Hunt has said restoring productivity is a national priority. In March he announced a Public Sector Productivity Plan - with an emphasis on improving technology in the National Health Service (NHS).

Friday's data underlined the urgency of that task. Output in both the health and education sectors fell in the fourth quarter, despite rising inputs.

Economists say the poor performance of the NHS - one of Prime Minister Rishi Sunak's five priorities - is now harming the wider economy.

Worsening long-term sickness has added around 16 billion pounds ($20 billion) in annual borrowing by the government, according to Britain's official budget forecasters, while eroding a much needed supply of workers.

($1 = 0.7964 pounds)

(Reporting by Andy Bruce; Editing by Sachin Ravikumar)