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The U.K. public sector may need to hire an additional 92,000 workers and spend over £5 billion by 2030 just to maintain current service levels, according to a new analysis by the Centre for Economics and Business Research (Cebr).
The report, based on official statistics, outlines a troubling trend: public sector productivity has declined for two consecutive years, falling below pre-pandemic levels and — more alarmingly — below 1997 levels.
Cebr’s findings, reported by The Guardian, suggest the Treasury will face an expensive dilemma of whether to absorb the rising cost of labor or accept deteriorating service levels.
“If the downward trend continues for the rest of the parliament, the Treasury will need to fill the shortfall in hours by employing 92,000 workers at an extra cost of £5.1bn,” Cebr calculated, according to The Guardian’s analysis.
“There is a third option,” the report notes, “of addressing productivity directly, taking measures to boost output per worker through skill development, operational changes, or otherwise.”
This comes at a time when Chancellor Rachel Reeves is under pressure to constrain day-to-day spending ahead of the autumn budget. With a weakened economic outlook and expected dip in tax revenues, Reeves faces what the report calls “mounting pressure to maintain staffing costs and output.”
The implications extend well beyond Whitehall. The public sector’s trajectory highlights the urgent need to rethink workforce development in the future of work, especially in sectors historically shielded from aggressive efficiency targets. Wes Streeting, the health secretary, has already asked NHS divisions to ramp up productivity, while unions push for pay increases.
Overall productivity in the U.K. remains sluggish, ranking below Germany, France, and 19% lower than the U.S. Without a coordinated strategy to modernize workflows and invest in skills, the government risks paying more for less.
