FOR most of my life politicians of various persuasions and capabilities have wittered about improving productivity – usually supported by their preferred economists (and invariably challenged by an equal number of economists of other political persuasions). Sometimes they seek to improve the productivity of public service (aka the government machine), sometimes of the entire economy. The more brazen ones lecture the private sector on increasing productivity, usually in support of their latest economic silver bullet (examples from the past 50 years include ‘white heat of technology’, the EEC/EC/EU, Brexit, Artificial Intelligence, Net Zero and ‘diversity’).
With such protracted and prolonged exhortation it’s reasonable to ask why is productivity still a problem (perceived or real).
At its simplest, productivity is output divided by input. In small organisations there are a number of productivity-related measures. In a manufacturing context one measure might be the number of widgets produced per labour hour. In a service industry it may be billable hours per professional. As companies get bigger, more costs come in. Are human resources a cost or a value add? What about the property portfolio?
Honest calculations are much harder for governments. While the input costs of a nuclear deterrent are pretty clear (albeit classified) how do you measure the output – arguably the absence of nuclear war – let alone put a value on it? As has become clear, the cost-benefit analysis behind HS2 was a tad creative with the benefits, themselves ephemera. Spending £100billion shaving 20 minutes from the journey from London to Birmingham makes no sense and never did.
I drive an articulated lorry for one of the major logistics companies, transporting stuff between distribution centres in the Midlands and Southeast. Almost everything you buy has been on a heavy goods vehicle such as mine for at least part of its journey from manufacturer to you. Therefore part of the price you pay includes the cost of transport, which includes diesel, driver time and truck maintenance depreciation (also time-based). Trucks stuck in traffic aren’t moving goods efficiently. Worse, they impede the ‘just-in-time’ logistics that have become the norm. Traffic jams undermine productivity and so cost you money. Strange, then, that governments desperately seeking growth and productivity produce so much policy which conspires to slow traffic. My truck is optimised to travel at 56mph. I average about 35mph, driving almost entirely on motorways and trunk roads. My truck is therefore working at about 63 per cent of its potential. So are most of the 750,000 HGVs that keep this country running.
In the south east the problem is twofold: the M25 and the Dartford Crossing. Neither is big enough for the traffic it has to take. No government has done much about it since the Queen Elizabeth II Bridge opened in 1991 to relieve the two tunnels. The current maintenance programme, which necessitates closures of the tunnels, regularly causes gridlock and spectacular delays. (If the east tunnel is closed, eco-friendly double-deck trailers have to go the long way round the M25 past Heathrow as they don’t fit in the west tunnel.)
Since the QE2 Bridge was opened, the UK’s population has risen from around 57million to 68million and the number of vehicles on the UK’s roads from around 25million to more than 40 million – and that figure excludes non-UK registered vehicles. Any sensible government would have increased capacity to match demand. Instead the Department for Transport’s sneaky plan to add 33 per cent to motorway capacity increase by converting hard shoulders to running lanes turned out to be lethally dangerous, not least due to their failure to ensure adequate radar and camera coverage. (It’s still less than 100 per cent – be afraid.) Maintenance of what roads we have is poor too.
How did we get here? The usual depressing combination of Westminster chasing fads like Net Zero and Whitehall embracing them rather than pointing out the rather obvious flaws. As it happens Mr Sunak was in Dartford at the weekend. Rather than assessing a national disgrace, he was painting a sea cadet shack. I suppose that’s mildly more useful than Nero fiddling while Rome burned, but not by much.
I don’t know where we go from here – but for sure we won’t get there quickly.
