UK ‘may need 92,000 extra public workers if fall in productivity continues to 2030’

The chancellor, Rachel Reeves, might be compelled to spend greater than £5bn and make use of 92,000 further staff around the public sector if declines in productiveness proceed till 2030, in step with research of reputable figures.

The Centre for Economics and Business Research (Cebr), an financial consultancy, stated extra staff could be wanted through the tip of the last decade to reach the similar degree of carrier, after a decline closing yr within the quantity produced each and every hour through the common public sector employee.

Using the most recent figures from the Office for National Statistics, the consultancy stated ministers will have to be alarmed through the findings, which confirmed a 0.3% decline in productiveness around the public sector in 2024, after a 0.2% decline in 2023, to beneath pre-pandemic ranges.

If the downward pattern continues for the remainder of the parliament, the Treasury will wish to fill the shortfall in hours through using 92,000 staff at an additional price of £5.1bn, Cebr calculated.

An choice will likely be to cap the choice of staff and settle for a decline in carrier ranges, it stated, including: “There is a third option of addressing productivity directly, taking measures to boost output per worker through skill development, operational changes, or otherwise.”

Reeves is beneath drive to restrict day by day spending ahead of the funds within the autumn. A spending assessment because of be revealed on 11 June will set out the federal government’s priorities for the following 3 years.

Speculation has greater that the chancellor will likely be compelled to chop departmental budgets or carry taxes to stick inside her fiscal laws after a weakening of the commercial outlook and the chance of decrease tax receipts.

The well being secretary, Wes Streeting, has suggested all spaces of the NHS to lift productiveness to unencumber finances for funding.

However, unions have begun to name for inflation-busting pay rises this summer time, including to the squeeze at the public handbag.

Cebr stated the United Kingdom’s general productiveness – which mixes non-public and public sector staff – had skilled chronic sluggishness because the 2008 monetary disaster and that the rustic measured poorly relative to a number of of its friends.

In 2023 the United Kingdom’s productiveness ranked beneath Germany and France. Relative to the USA, productiveness in the United Kingdom was once 19% decrease.

Public sector productiveness took a pointy hit from the pandemic and has since did not get well.

“In addition to remaining short of 2019 levels, recent declines mean that public sector productivity is now even lower than it was in 1997, marking cause for concern,” the document stated.

“The UK’s productivity puzzle is not new, but the fiscal stakes are now higher than before. Under the dual headwinds of shrinking productivity and rising wages, the public purse is under mounting pressure to maintain its staffing costs and output.

“Policymakers will need to consider how to boost efficiency while navigating tight fiscal rules and a changing labour market. Failure to act risks a growing black hole in public finances, with taxpayers footing the bill for more staff delivering less output.”