Public Sector Productivity

Lord Elliott of Mickle Fell Excerpts

Wednesday 9th October 2024 Lords Chamber

[Lord Elliott of Mickle Fell (Con)]

My Lords, I thank my noble friend Lady Neville-Rolfe for securing this ever-topical debate ahead of the Budget. Public sector productivity has long been a special interest of mine. I published my first book on that topic back in 2006, and I am pleased to say it can still be bought second-hand on Amazon for a very modest £3.29.

Being interested in this subject, I was pleased to hear the Chancellor announce in the public spending statement in July that she would launch a drive to boost public sector productivity. This is not a novel idea. ln the 2000s, we had the Gershon efficiency review; in the 2010s, my noble friend Lord Cameron of Chipping Norton launched the productivity plan; and last year the previous Government announced plans to save billions of pounds through greater use of data and AI. Public sector productivity is, therefore, a perennial issue, which Governments of all stripes have tried, and largely failed, to improve in recent decades.

Because time is limited, I will focus my remarks on one specific area: the impact of compressed hours and a four-day working week on public sector productivity. In recent months, we have heard Ministers mention four-day working weeks as part of the broader debate around flexible working. The noble Baroness, Lady Smith of Malvern, stated that

“flexible working is actually good for productivity”,

including the kind of flexible working that involves compressed hours.

I think we can all agree that, if a four-day working week were demonstrated to improve efficiency across the public sector and save taxpayers money, we should all support it, but the evidence for this is thin. Take, for example, South Cambridgeshire District Council, whose flagship trial of a four-day working week concluded earlier this year. The original report analysing the trial suggested that 22 of 24 key performance indicators had either improved or remained the same and that cost savings had been achieved by having to recruit fewer agency workers. This all sounded very encouraging. However, when the correspondence between the council and the consultancy evaluating the scheme was released following a freedom of information request, a very different picture emerged. It suggested that senior council officials had edited the review of the scheme to make it sound more positive. For example, a section that detailed how over half of employees had struggled to access council offices during this period was deleted, and the actual cost savings were significantly less than the ones published.

Equally, there is no evidence from the private sector to suggest that a four-day working week can help to improve productivity. Bigger businesses—the ones most organisationally comparable to government departments and local authorities—are certainly not rushing to embrace compressed hours or the four-day working week. If these changes were so beneficial to productivity, surely businesses, driven by profit maximisation and shareholder value, would have seen the light and taken this up for their employees. If we are to proceed further down this route of compressed hours and a four-day working week, we must have more concrete evidence that they will improve productivity.

I look forward to hearing the concluding remarks of the noble Baroness, Lady Blake of Leeds. Having been born and brought up in Gledhow, an area of Leeds that I know is close to her heart, I know first hand from my regular visits there—still—that, under her leadership, she ran an efficient and effective council. I would be grateful if the Minister could explain the evidence on which the Government are basing their assumptions that compressed hours or a four-day working week would lead to greater public sector productivity. If there is no evidence base, why are the Government encouraging this course of action? I hope we can all agree that improving public sector productivity and ensuring that taxpayers get good value for money should be at the forefront of our minds when considering this important question.