HUGH OSMOND: Public sector became ball and chain holding Britain back

Endemic inefficiency, shirking from home… the sclerotic public sector has become a ball and chain holding Britain back, writes Punch Taverns founder HUGH OSMOND

A colleague of mine recently corresponded with HM Revenue & Customs on a complex tax- related matter.

He was told the very earliest they could deal with this stressful issue was in the third quarter of 2024 — well over a year away.

Naturally, in the interests of ‘efficiency’, the problem would also need to be handled online rather than in person.

This, despite the fact that, by their own admission, online interactions generally took 20-30 per cent longer than face-to-face ones. So where was the ‘efficiency’?

This exasperating episode is, of course, typical of the countless inconveniences we face every week these days, be it in our business lives or when it comes to personal dealings.

Office for National Statistics figures show that public sector productivity is a staggering 5.7 per cent down on what it was before the pandemic (stock image)

Whether it’s ordering a new passport, renewing a driving licence, applying for planning permission, or any other administrative task that requires interaction with the public sector, it takes much longer than it ever did.

You don’t need to be Einstein to work out that productivity in government departments is at an all-time low. Now, though, we have the numbers to prove it in black and white.

Office for National Statistics figures show that public sector productivity is a staggering 5.7 per cent down on what it was before the pandemic.

By contrast, private sector output is now 1.3 per cent higher — impressive when you consider many small businesses went to the wall due to devastating Covid lockdowns and many of those that survived have faced a long haul back to profitability.

Either way, the gulf between the public and private sectors is made all the more grave by the fact that public sector wages keep rising, and public servants keep striking for pay hikes of up to 35 per cent.

Little wonder the Chancellor is alarmed. This week, Jeremy Hunt announced a review into public sector efficiency, proclaiming that a failure to improve this downwards trajectory would put the UK on an unsustainable long-term path towards permanently higher taxes or borrowing.

In other words, the sclerotic nature of our public sector is a ball and chain that holds us all back.

A combination of working from home and a complete absence of performance-related pay, has undermined efficiency and strangled innovation in the public sector, stifling growth in the process.

This is a disaster as history has often shown that human beings are intelligently lazy, meaning they will do the bare minimum if there’s no compelling reason to work harder.

Never has this been more effectively demonstrated than in the newly reported epidemic of ‘quiet quitting’, a phrase which originated on social media last year.

The attitude appears to be prevalent in the public sector, where a Chartered Institute of Personnel and Development survey reported that only 44 per cent of workers would go ‘above and beyond’ to meet their organisation’s needs. In the private sector it was 52 per cent.

I have observed this trend in my hospitality group, where 50 per cent of my workers are aged under 21.

READ MORE: WFH Whitehall! Government office designs are now based on just 50% of staff being in after Covid rather than 66%

Those who have left home and pay their own rent are, by and large, far more incentivised to work harder, and earn more, than the ones still living with their parents. The latter have the safety net of a roof over their head and food on the table whatever they do.

It pains me to say but, at the moment, the entire public sector feels like it is operating in a similar way.

If an organisation is like a vast sprawling safety net, human nature does the rest.

Working from home (WFH), has been a disaster. During lockdowns, with many workers banned from travelling to work, it was the only way to keep businesses going. But it has now become normalised to an extraordinary degree: today, 44 per cent of the workforce are based at home some or all of the time.

Nowhere is this more evident than in government departments, which — more than two years after the last lockdown — remain a sea of empty desks.

In the last week of May —admittedly the half-term break for schools and the House of Commons — just 29 per cent of staff at the Department for Environment, Food and Rural Affairs (Defra) turned up at its Westminster headquarters.

The picture was little better elsewhere in Whitehall, with the proportion attending the office at 31-34 per cent.

This included HMRC, which just last week announced that one of its vital self-assessment phone lines would be closed for three months from Monday so it could deploy 350 advisers elsewhere.

Unsurprisingly, this led to an outcry, with MPs demanding to know whether the shutdown was attributable to its WFH culture.

Certainly, it’s clear that the wheels of government are not turning as efficiently as they should — due to the fact that WFH is much less effective.

Any team worker who has ever sat at their laptop in their kitchen during the working day knows everything takes longer. A task that would once have involved a simple face-to-face conversation with a colleague is replaced by laborious email exchanges.

Meanwhile, human nature is such that, given an opportunity to avoid working hard, many people will take it.

Away from the scrutinising eyes of their bosses, employees pick the kids up from school, walk the dog, and get their hair cut.

This week, as the sun beats down from a clear blue sky you will see them sprawled on the grass in our parks, or enjoying an alfresco coffee mid-afternoon.

Harsh? Yet again we have the data to show that all too often people are shirking, not working, from home, with leisure services up and down the country reporting a surge in demand for weekday bookings since the pandemic.

In April, the contactless payment processor SumUp revealed that the amount of money spent midweek in the hair and beauty industry was up nearly 5 per cent last year on the pre-pandemic level.

Fitness instructors and golf courses have all reported spiralling bookings during normal office hours.

If, as a nation, we produce less, then ultimately we get poorer. It means we pay less tax, and that means less funding for the NHS, education, and all the rest of our national infrastructure. That’s not an opinion, it’s ineluctable mathematics (file image)

I see this trend in reverse across the restaurants that I own, many of which are in city centres.

Previously full to bursting on Fridays, they are now noticeably less busy because our customers are largely WFH at the end of the week.

Thank goodness for the private sector, whose workforces have mainly returned to the office.

I regularly speak to dozens of other business owners, and — with the exception of the odd one in the IT sector — all are adamant that WFH is a failed experiment and have ordered their staff back to their desks.

In Bolton, John Roberts, the boss of electronics and white goods seller AO World, has gone one step further, banning hybrid working altogether and warning his 3,000 employees that should they continue to try to avoid the office they could find their jobs outsourced overseas, where labour is cheaper.

Good for him!

If, as a nation, we produce less, then ultimately we get poorer. It means we pay less tax, and that means less funding for the NHS, education, and all the rest of our national infrastructure. That’s not an opinion, it’s ineluctable mathematics.

And that’s why our public sector must be shaken out of its torpor.

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