Helping government improve the productivity of public services sits at the heart of NAO’s 2025-30 strategy, and with good reason. Public services are under sustained pressure from demographic change, cost inflation and rising demand, all against a backdrop of constrained public finances.
Over the last few years, our audits have shown that when resources are tight, the consequences of low productivity are felt most acutely by citizens: longer waiting times, reduced service quality and poorer outcomes.
But these pressures do not tell the whole story. Across government, the NAO continues to see examples where public bodies have improved some aspects of productivity by learning what works, using evidence well and making difficult trade‑offs explicit. The challenge is not a lack of ideas, but the ability to apply those lessons consistently and at scale.
To support this, I will be leading a new team at the NAO, focused on public sector productivity. Our ambition is to bring together insights from across our audit work, coordinate our approach, and share clear, practical lessons on how productivity improvements have been achieved in practice.
So, what do we mean by more productive public services? In essence, productivity is about how effectively public bodies convert their inputs – people, assets and money – into the outputs and outcomes for citizens. Our work shows that sustained productivity improvement rarely comes from a single initiative. Instead, it reflects a series of deliberate choices about where effort is focused, how services are designed, and how risks are managed over time.
NAO findings highlight several recurring ways in which productivity can be strengthened. Better management of demand is a consistent theme, particularly through prevention and early intervention. Our work also shows the importance of understanding and managing peaks and troughs in demand so services are not over‑resourced at some points and overwhelmed at others. Equally, there are opportunities for public bodies to make better use of the assets they already have, modernising where required and ensuring they manage assets strategically.
The workforce is central to productivity, and our audits repeatedly show that shortages of skills, high turnover and limited workforce planning undermine performance. Investing in staff capability, tackling underperformance and supporting continuous improvement matter as much as headline staffing numbers. Alongside this, how resources are allocated is critical, particularly for services or processes that run across multiple departments or parts of the public sector. Productivity suffers where trade‑offs between short‑term pressures and long‑term value are avoided or obscured, rather than made explicit and managed transparently.
Process improvement and appropriately applied digital technology play an important role. NAO reports consistently show that automating inefficient processes, standardising ways of working and streamlining approvals can release capacity – but only where technology is implemented with a clear understanding of service needs and user behaviour, and is able to build on strong data foundations.
Digital tools, including AI, can support productivity, but they are not a substitute for clear objectives, strong governance and reliable data. Finally, our work points to the importance of stopping or reshaping low‑value activity, including reducing losses from error and fraud, and being willing to change or cease services that are no longer delivering intended outcomes.
We recognise how difficult productivity improvement can be in practice. Departments are facing numerous issues including rising demand, workforce pressures, operational complexity, and a fragmented and unstable digital estate. For those trying to improve productivity in front line services, there can also be structural barriers, limited understanding of what works and the extent to which good practice is transferable, inconsistent practice across the sector and uneven adoption of new approaches.
Even in these very challenging conditions, we have seen examples where productivity gains have been made; with sustained leadership, good use of evidence and a willingness to innovate and take well managed risks.
Looking ahead over the next year, we will publish a series of short, good practice reports drawing together evidence from across our audit work. These will highlight where public bodies have successfully improved productivity and why those approaches worked in their specific context. Our aim is to provide practical insights that can be applied elsewhere, supporting Parliament and public bodies to focus not just on controlling costs, but on delivering better value from public spending over the long term.
Alongside this we will work with our financial audit, value for money and specialist insights teams, providing them with practical briefing material and case examples for use in discussions with the bodies we audit. By sharing insights and highlighting good practice, as well as supporting accountability to Parliament for progress and delivery, we can support public sectors bodies working to improve their own productivity, and ultimately to provide better value for money for taxpayers, service users and citizens.
Read more about our insights and good practice that could help your organisation improve its productivity, or get in touch with us at productivity@nao.org.uk