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Public Service Productivity Estimates, Education 2011 This product is designated as National Statistics

Released: 01 October 2013 Download PDF

Abstract

This article provides updated estimates of growth in the volume of public service education output, inputs and productivity from 1996 to 2011. Estimates of education output include an adjustment for quality, based on GCSE and equivalent attainment levels of school pupils aged 15-16. The article also provides estimates of education inputs broken down into growth of labour, goods and services and capital.

Acknowledgements

The author would like to acknowledge contributions from Nia Pope, Sarah Caul, Chris Payne, Jozef Berila, William Postins, Geoff Bright, and Jamie Pritchard.

Summary

Key points:

  • Productivity growth is calculated by comparing growth in the total amount of education output to growth in the total amount of input used.  We estimate public service education productivity grew by 5.6% in 2011, the highest growth rate since the series began in 1996.

  • This high productivity growth rate has been caused by a 1.8% fall in the volume of inputs between 2010 and 2011 used to produce publicly-funded education while quality-adjusted education output continued to rise.  Output estimates reflect both changes in pupil numbers and the change in the quality of education output denoted by average point scores in GCSEs and equivalent examinations.  Productivity would have risen by 3.0% in 2011 even if output figures were not adjusted for quality changes.

  • Over the whole time period between 1996 and 2011, annual average productivity growth is 0.9% per year, up from an average of 0.5% per year between 1996 and 2010 due to the high growth rate in 2011.

  • The 1.8% fall in the volume of inputs in 2011 is the net effect of a reduction in goods and services inputs, a slight fall in labour inputs and a small increase in capital inputs.

  • This article uses the latest National Accounts data, a revised series for capital services and some data revisions to Further Education activity levels and expenditure weights.  These revisions have affected productivity growth rates in individual years, but overall, there is no revision to the previously published annual average productivity growth rate of 0.5% between 1996 and 2010.  (ONS 2012a).

Annex A (17.1 Kb Pdf)  provides a User Guide to the use and interpretation of the statistics contained in this release.

Estimates of productivity

Figure 1 and Table 1 show the time series for the latest estimates of public service education output, inputs and productivity since 1996 in index form, with 1996 as the reference year.  Figure 2 shows annual growth rates in productivity between 1997 and 2011.

Figure 1: Education output, inputs and productivity 1996-2011

UK

Figure 1: Education output, inputs and productivity 1996-2011
Source: Office for National Statistics

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Figure 2: Annual percentage growth rates of education productivity 1997-2011

UK

Figure 2: Annual percentage growth rates of education productivity 1997-2011
Source: Office for National Statistics

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Table 1: Indices of output, inputs and productivity 1996–2011

United Kingdom

Index numbers, 1996 = 100
  Output Inputs Productivity 
1996 100.0 100.0 100.0
1997 103.0 100.5 102.5
1998 105.7 100.1 105.6
1999 108.8 99.4 109.4
2000 110.6 100.9 109.6
       
2001 112.7 104.5 107.9
2002 116.2 110.9 104.8
2003 118.2 112.9 104.7
2004 121.5 115.1 105.6
2005 124.3 119.9 103.6
       
2006 124.8 122.2 102.1
2007 126.4 123.8 102.1
2008 130.7 130.1 100.5
2009 138.3 132.7 104.2
2010 143.9 133.6 107.7
       
2011 149.2 131.2 113.7
       
Mean annual growth1 2.7% 1.8% 0.9%
1996–2011 (percentages)    

Table source: Office for National Statistics

Table notes:

  1. Means are geometric.

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Figure 2 shows three trends in productivity over the 15 years since 1996:

  • Between 1996 and 2000 there was a period of positive productivity growth, driven by constrained growth in the volume of inputs, but rising output. 

  • Between 2000 and 2008 there was a period of flat or negative productivity growth, driven by faster inputs growth than output growth. 

  • From 2009 to 2011 there was a period of positive productivity growth, driven by a slow-down and then a fall in inputs while output continued to rise.

Impact of the quality-adjustment factor on Education output

In line with recommendations of Eurostat (2001) and the Atkinson Review (2005) a quality- adjustment factor is applied to the estimate of education output.

The sources and methods paper for Public Service Productivity Estimates: Education (ONS 2012c) provides detailed information about the way in which the quality-adjustment method is currently deployed within the education productivity statistics.

In summary, the main quality-adjustment factor1 used in calculating output estimates is based on the growth in Average Point Scores (APS) for GCSEs and equivalent qualifications in England, Wales and Northern Ireland, and Standard Grades and equivalent qualifications in Scotland.

The quality-adjustment factor for each country is applied to pupil numbers in the following sectors:  

  • Primary schools (adjusted to include primary converter Academies in England)

  • Secondary schools (adjusted to include secondary converter Academies in England), and

  • Sponsor-led Academies and former City Technology Colleges (in England only)

It should be noted that this method of quality-adjustment is used only to produce public service education productivity estimates, and not used in the UK National Accounts.

Figure 3 shows how much output growth is attributable to underlying student number changes, and how much is attributable to the quality-adjustment factor each year.

Figure 3: Impact of quality-adjustment factor on Education output growth 1997-2011

UK

Figure 3: Impact of quality-adjustment factor on Education output growth 1997-2011
Source: Office for National Statistics

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The contribution from each component varies over the time period, with underlying quantity showing periods of positive growth for the majority of the period.  There are falls in student numbers however for the four years between 2005 and 2008 and a small fall in 2010.  This is due to falls in secondary school pupil numbers and Further Education students.

In contrast, the contribution to output growth from the quality-adjustment factor has been positive throughout the time series, and contributed almost all of the output growth in 2009 and 2010.  As inputs did not grow as fast as quality-adjusted output, quality improvements drove most of the improvement in education productivity for 2009 and 2010.

In the most recent year however, 1.1 percentage points of the 3.7% growth in output between 2010 and 2011 is accounted for by increased student numbers.  This growth comes from increases in pupil numbers in the primary sector and City Technology Colleges and sponsor academies.  When using the underlying 1.1% increase in education quantity, with a 1.8% fall in inputs, productivity would still have risen by 3.0%.  Including the contribution from the quality adjustment, productivity rises by 5.6% in 2011.    

Review of the Education Quality Adjustment

In a triangulation paper published last year into the Education quality adjustment (ONS 2012b) ONS concluded that the current quality-adjustment method required further development. 

In the triangulation paper, in relation to English GCSE performance, we said:

“We report recent trends identified in the Wolf Report (2011) on the rapid increase in the awards of GCSE equivalent qualifications, and the impact this has on the achievement of the 5 A*-C performance standard.  We also find that the overall GCSE grade distribution has become more concentrated towards higher grades since 1997/98, with the greatest shift occurring in the six years between 2003/04 and 2009/10.” (p1 of article PDF).

And,

“We conclude that the current measure of quality adjustment for public service education based on APS requires further development.  ONS will therefore consider the options for alternative quality adjustment methods in consultation with data providers, users and stakeholders.”  (p2 of article PDF) 

The objective of the review is to overcome the difficulties caused by breaks in the APS time series which result from policy changes that have been made or announced, and to make the method more compliant with new European System of National and Regional Accounts (ESA) 2010 accounting framework.  The ESA 2010 framework discourages ad-hoc quality adjustment methods, and prefers disaggregated methods to adjust for changes in the quality of output.

Work is progressing on two alternative methods of quality-adjustment which involve use of micro-level data on pupil performance, characteristics and school factors.  ONS will consult with users and stakeholders and the wider Government Statistical Service when feasible options for a new method of quality-adjustment are available.

Notes for Estimates of productivity

  1. A different quality-adjustment factor based on completion rates is applied to Initial Teacher Training, but has a zero effect on output volume growth (to 1 decimal place).

Volume of education output

Methodology

Education output consists of an estimate of volume (or quantity), which is then adjusted for quality.  The reasons for quality-adjusting public service output are well documented and follow from recommendations made in the Atkinson Review (2005). 

Quantity is the sum, weighted by cost of education, of full-time equivalent (FTE), publicly-funded pupil and student numbers within the following sectors:

  • pre-school education, including places funded in the private, voluntary and independent sector (PVI)

  • government-maintained primary, secondary and special schools.  For England only, City Technology Colleges (CTCs) and (City) Academies (CAs) are included as a separate category.  Converter-academies are included within the primary and secondary categories, in line with their treatment within other areas of ONS.  All of these figures are adjusted for attendance1

  • further education colleges 

  • higher education studying for initial teacher training and health professional training courses funded by government

Education volume in this article includes adults who are attending further education colleges and whose courses are funded by government, as well as young people between the ages 16 and 19 studying for upper secondary level qualifications.

Student and pupil numbers

Table 2 shows that the largest sectors of publicly-funded education are pre-school/primary and secondary schools accounting for around 78% of total student numbers in academic year 2011-12 (around 8.5 million pupils), down from 85% at the beginning of the period in 1995-96.  This figure includes converter academies in England.  Further Education is also a large component of output with almost 1.5m full-time equivalent learners by 2011-12.

There has been strong policy-driven growth in the volume of pre-school places funded in the private, voluntary and independent sector, and for sponsor-led Academies and former City Technology Colleges (in England only).  However, both these sectors only make a relatively small contribution to overall student numbers at a UK level at 2.7% and 2.9% respectively.  The number of health professional training courses funded by government has approximately doubled between 1995-96 and 2011-12 but still only represents 1% of the overall total.

Table 2: Full-time-equivalent pupil/student numbers, by sector and country 1995-96 and 2011-12

United Kingdom

    Thousands1   Average annual percentage change2
1995-96 2011-12 1995-96 – 2011-12
Sector        
  PVI pre-school 56 297   11.0
  Pre-School and Primary 5,190 4,925   -0.3
  Secondary 3,677 3,564   -0.2
  Special 108 105   -0.2
  CTC/CA 14 312   21.2
  Further Education 1,228 1,443   1.0
  Initial Teacher Training 72 55   -1.6
  Health 59 118   4.4
           
Country        
  England 8,608 9,099   0.3
  Wales 557 535   -0.3
  Scotland 860 826   -0.2
  NI 380 359   -0.4
  UK 10,404 10,819   0.2

Table source: Office for National Statistics

Table notes:

  1. Figures may not sum due to rounding.
  2. Averages are geometric.

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Absence rates

Pupil numbers in primary, secondary and special schools are adjusted for recorded rates of absence and aggregated to a UK level.  Figure 4 shows that absence rates have fallen since 1995-96 in most sectors, although rates in the secondary sector have been consistently higher than in the primary sector.  As sponsor-academies have grown in number, average student absence rates increased for a period, but since 2006-07 this sector has also seen a similar downward trend in recorded absence rates.

Figure 4: Absence rates by sector 1995-96 to 2011-12

UK

Figure 4: Absence rates by sector 1995-96 to 2011-12
Source: Office for National Statistics

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Aggregating education quantity

In order to combine the changes in the quantities of each type of education provider together, ONS use expenditure shares for each sector to create a chain-linked Laspeyres volume index.  The background notes and Sources and Methods paper for Education Productivity (ONS 2012c) give further information on this technique.

The expenditure share used in this calculation is the cost of each type of provider as a proportion of total education costs.  Data for education costs are provided by each of the four countries in the UK.

Table 3 shows that, in 2011, 74.7% of expenditure was in the pre-school, primary and secondary sectors, with a further 11.8% in further education.  This compares with expenditure shares in 1996 of 74.5% and 15.0% respectively.  Since 2006, the most substantial increases in expenditure share have been in CTC and City Academies, and the pre-school/primary sector.

Table 3: Expenditure shares by education sector, selected years 1996-2011

United Kingdom

  Percentages     Differences, percentage points
1996 2001 2006 2011 1996–2001 2001–2006 2006–2011
Pre-school & Primary Schools 40.8 40.3 38.1 40.3   -0.5 -2.3 2.2
Secondary Schools 33.7 37.7 36.5 34.4   4.0 -1.2 -2.1
Special Schools 6.7 5.3 5.6 5.3   -1.3 0.2 -0.3
CTC/City Academies 0.2 0.2 0.6 3.9   0.0 0.4 3.4
PVI 0.6 1.0 1.8 1.9   0.4 0.8 0.1
Health Professional Training 1.7 1.8 2.0 1.9   0.1 0.2 -0.1
Initial Teacher Training 1.2 0.7 0.5 0.5   -0.5 -0.2 -0.1
Further Education 15.0 12.9 15.1 11.8   -2.1 2.1 -3.2
                 
Total1 100.0 100.0 100.0 100.0        

Table notes:

  1. Figures may not sum due to rounding.

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Estimates of education quantity

Figure 5 shows which sectors of education are making positive or negative contributions to the overall growth in student numbers (education quantity) over time.

Figure 5: Contributions to education quantity growth 1997-2011

UK

Figure 5: Contributions to education quantity growth 1997-2011
Source: Office for National Statistics

Notes:

  1. Pre-school and PVI sectors are included in “other” in this data.

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Education quantity rose to a peak in 2004 and then fell until 2009.  This peak was driven by demographic factors which saw rising numbers of primary school pupils between 1996 and 2000 alongside already growing secondary school numbers.  Secondary school numbers continued to grow from 2000 to 2004 but this was partially offset by negative contributions from primary schools in those years. 

Between 2005 and 2008 there were falls in overall numbers of students, driven by falls in FE students and in the primary and secondary sectors.  But in the last two years of 2010 and 2011 numbers have been increasing in primary schools and City (sponsor) academies.  City Academies are included in the “other” category.  This reflects the increase in population and birth rate in the UK in recent years, and rise of different types of academy in England.

This rise seen in primary school pupils will also feed into the secondary sector in future years and reverse the negative contribution to quantity growth from the secondary sector seen throughout the second half of the time series.

Further education has varied in its contribution with periods of positive and negative contribution to growth.  After a period of falling numbers between 2006 and 2010, the numbers of Further Education students increased in 2011, potentially as a result of poorer economic prospects in the labour market due to low output growth in the UK economy.

Between 1996 and 2005, the contribution from the ‘Other’ education component is dominated by courses for health professionals.  Over this period, health professional courses raised education volume by 1.6 percentage points.  From 2006 to 2011, the fastest growing component of ‘Other’ was City or Sponsor-Academies.  This was largely as a consequence of policy changes.  This group raised total volume by 3.2 percentage points between 2006 and 2011.

Notes for Volume of education output

  1. Overall absence data is used for each country of the UK to adjust for attendance. 

Quality adjustment of education output

In line with recommendations of Eurostat (2001) and the Atkinson Review (2005) a quality- adjustment factor is applied to the estimate of education output.  The quality adjustment applied here is the change in uncapped Average Point Score (APS) in GCSEs and equivalents achieved by 15-16 year old pupils each year. 

In Scotland, the APS for Standard Grades and equivalent qualifications is used.  In Northern Ireland, the change in APS is proxied by the change in APS in England as data for Northern Ireland is not readily available.

The quality adjustment is applied to pupils in primary and secondary schools in each of the four countries, and in England also for pupils attending CTCs and Academies, to give a final estimate of education output.  Initial Teacher Training output is also adjusted by a completion rate factor.

Figure 6: Average Point Score by country between 1995-96 and 2011-12

Figure 6: Average Point Score by country between 1995-96 and 2011-12
Source: Office for National Statistics

Notes:

  1. Break in time series at 2003/04 applies to England only
  2. Break in time series at 2007/08 applies to Wales only

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Figure 6 shows the indices in APS in England, Wales and Scotland between 1995-96 and 2011-12, all referenced to 1995-96 as the base year.  Northern Ireland changes are identical to England, by assumption.

The change to the method of calculating APS is apparent in England in 2003-04 when a wider set of equivalent examinations was included alongside GCSEs.  In the five years up to and including 2003-04, the APS grew by an annual average of 1.8 per cent, while over the subsequent 8 years the average annual rate of growth was 4.6%.  In the last academic year, 2011-12, growth in APS slowed to 1.9%.

The pattern for APS in Wales follows a similar trend to England between academic year 1995-96 and 2003-04 then growth in Welsh scores was generally slower than in England.  Equivalent qualifications were brought into Welsh APS during academic year 2007-08, and a break in the series is indicated.  For the last two years, up to end of academic year 2011-12 growth in APS was higher in Wales than in England. 

Scotland shows slower growth in APS than in England and Wales throughout the period.

Estimates of education output

The latest estimates for education output, adjusting for the change in APS performance across the UK, are shown in Figure 7 alongside education quantity estimates.  The data is in index form, with 1996 as the reference year.

Figure 7: Estimates of the volume of education output and quantity 1996-2011

UK

Figure 7: Estimates of the volume of education output and quantity 1996-2011
Source: Office for National Statistics

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In terms of quality-adjusted output, the impact of the change in APS methodology in England on output at a UK level was muted for the period from 2003 to 2007 as rising quality was partially offset by falling student numbers.

In recent years the number of students has stabilised, and started to increase and the contribution from the quality-adjustment factor for the UK as a whole has risen to around 4% per year.  This means that the quality-adjusted output estimates also grow strongly over the last three years, and are the main driver of higher productivity growth.

Volume estimates of inputs

Figure 8 shows that input growth has been positive in 12 of the last 15 years with the strongest annual growth rates recorded in 2002 and 2008.  Since 2008, there has been a marked slow-down in inputs growth rates to 2% or less, and an actual fall in inputs between 2010 and 2011 of 1.8%. This fall has been driven by a fall in the estimate for goods and services inputs.

Figure 8: Annual growth rates in volume of education inputs, 1997-2011

UK

Figure 8: Annual growth rates in volume of education inputs, 1997-2011
Source: Office for National Statistics

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Components of education input

Inputs to publicly-funded education are broken down into three components:

  • labour input, such as teachers, teaching and other support staff, and government administration.  Data on FTE teachers and support staff is used, alongside data from National Accounts to generate an estimate of the volume of labour input for education.

  • goods and services input, such as equipment in schools, energy costs, and policy-driven expenditure such as free sessions in private and voluntary sector pre-school settings for children aged 3 years old.  Expenditure from National Accounts is deflated to generate a volume estimate for goods and services input.

  • capital services––this is a measure, in volume terms, of the service that is received each year by using the capital stock present within the publicly-funded education system.  The data source for this series is the Volume Index of Capital Services (VICS) produced by ONS.  The whole capital services series for Education has been revised since the publication of the last Education Productivity estimates (ONS 2012a) as conversion to UK Standard Industrial Classification 2007 (SIC 2007) has been incorporated.  The revisions section provides more detail about the impact of this change on the current estimates.

A sources and methods paper (ONS 2012c) is available which describes the data sources and methodology for compiling estimates of the volume of inputs in more detail.

Figure 9 shows the indices of these three components of input between 1996 and 2011, with 1996 as the base year. 

Figure 9: Volume of inputs by component, 1996-2011

UK

Figure 9: Volume of inputs by component, 1996-2011
Source: Office for National Statistics

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The volume of labour index grows by 17% in total, or by an annual average of 1.1% over the period 1996 to 2011.  Within that period, growth is concentrated in the years between 2000 and 2008, when growth averaged 2% per year.  This is particularly associated with increases in teacher and teacher assistant numbers in maintained schools in England between 2002 and 2008.  Since 2008, the volume of labour inputs has remained at broadly the same level in the UK.  It should be noted that this estimate of labour input includes all types of academy in England, Further Education, other central government labour input, and local authority-funded staff.

There is steady growth in the capital services series of 93% by 2011, or an average of 4.5% per year.  This represents the continuing use of capital, mostly buildings and estates in the education sector.

The volume estimates for goods and services show a generally upward trend each year, although there is more volatility throughout the series than for other inputs.  Overall, goods and services volume grows by 64% between 1996 and 2011 or by an average of 3.5% per year.  Growth is positive for most of the period, but there were falls recorded in 1997 (-0.3%), 1998 (-4.4%), 2007 (-0.2%), 2010 (-1.0%) and 2011 (-6.7%). 

The falls in 1997, 1998, 2007 and 2011 were caused by falls in the net procurement estimate for local government.  The fall in 2010 was caused by a fall in the estimate for central government net procurement.  These figures use data recorded in UK National Accounts for local and central government by Classification of the Functions of Government (COFOG).

Goods and services inputs

Figure 10 compares the volume indices of local and central government goods and services since 1996.  Local government represents around 80% of procurement spending and hence has the dominant expenditure weight, compared to around 20% for central government procurement.  This reflects the structure of most publicly-funded schools in the UK being in the Local Authority maintained sector, with schools dominating education spending.

Figure 10: Local and Central Government Goods and Services Indices, 1996-2011

UK

Figure 10: Local and Central Government Goods and Services Indices, 1996-2011
Source: Office for National Statistics

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The growth rates in both these series are fairly volatile, but tend to move in similar directions, with some lags apparent in some years.  However, there is a marked difference in 2011 where growth rates are of opposite signs.  The volume of local government procurement inputs fall, while the volume of central government goods and services inputs rise. 

Volumes for goods and services inputs are estimated by deflating current expenditure of central and local government.  Given similar deflators are used for both sectors, changes in current price expenditure drive the change in volume estimates.

One of the main drivers for a movement in funding from local to central government is the rapid expansion of academies in England.  For example, 1,058 converter academies were opened in England during academic year 2011-12 which means that financing is switched from local authorities to central government1.  By the end of academic year 2011-12, a total of 1,952 schools in England were academies (converter and sponsor), compared to 801 schools at the end of 2010-11, and only 203 schools at the end of 2009-10 academic year. (DfE 2013) 

This adds to other forms of new centrally-funded schools – also legal types of academy - that now exist such as free-schools, University Technical Colleges and Studio schools in England.

Another new centrally-funded policy initiative is the Pupil Premium in England which aims to support disadvantaged children in schools.  This was introduced in April 2011, and had a budget in 2011-12 of £625 million.  The initiative has since been expanded to include more groups of children, and its budget is set to rise to £1.875 billion in 2013-14.

Including these policy effects in England, spending figures provided to National Accounts from all four countries in the UK show that overall, falls in local authority procurement spending outweigh central government increases in 2011.  When adjusted for the effects of price inflation, the fall in the estimate for the volume of goods and services input is 6.7% for 2011.

Aggregating education inputs

Changes in the three components of input volume are added together using their relative shares in overall government expenditure on education, using data from National Accounts and ONS sources2, to form the equivalent of a chain-linked Laspeyres volume index.  This is the same statistical technique as used to estimate the volume of output series.  More information on this technique is published in the background notes.

Table 4 shows the expenditure shares for the components of input and how they have changed since 1996.  Prior to 2001, the share of labour in total expenditure increased, while the goods and services share fell.  This movement reversed after 2001 when the expenditure share of labour input fell while that of goods and services rose.  The capital services weight at the end of the period has also risen slightly from 7.1% in 1996 to 7.5% by 2011.

Table 4: Expenditure shares, by component of input, selected years 1996 to 2011

United Kingdom

   Expenditure shares, percentages   Differences, percentage points1
1996 2001 2006 2011 1996–2001 2001–2006 2006–2011
Labour 67.8 71.0 67.8 65.4   3.2 -3.2 -2.4
Goods and services 25.1 22.0 24.7 27.1   -3.1 2.7 2.4
Capital services 7.1 6.9 7.5 7.5   -0.2 0.6 0.0
                 
Total1 100.0 100.0 100.0 100.0        

Table source: Office for National Statistics

Table notes:

  1. Figures may not sum due to rounding.

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Contributions to inputs growth

Annual growth rates in the overall volume of inputs can be broken down into the contributions from the three components, taking account of the greater weight attached to labour input compared to the other two components.

Figure 11 shows that the contribution from the volume of labour was positive for all years except 1999 and 2011, and was strongest in 2001 and 2002.  The fall in 2011 reflects reductions in teacher numbers recorded in England and Scotland between 2010-11 and 2011-12, and a fall in support staff inputs in England.

Figure 11: Contributions to input volume growth, by component, 1997-2011

UK

Figure 11: Contributions to input volume growth, by component, 1997-2011
Source: Office for National Statistics

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The contribution from goods and services volumes has also been mostly positive throughout the series.  Falls were only seen in 1998, 2007, 2010 and 2011.  Growth in this component includes the procurement of pre-school education in the private, voluntary and independent sector, mirroring the increase in places seen in the volume of output section in the mid 2000s.

Capital services inputs have made a small, positive contribution throughout the time period of between 0.1 and 0.6 percentage points.   

Notes for Volume estimates of inputs

  1. The Department for Education (DfE) allocates money to the Education Funding Agency (EFA), one of four new Executive Agencies within DfE.  The Education Funding Agency then directly provides money to Academies through a system of “funding agreements”. 
  2. Expenditure weights for the three components of input are Compensation of Employees, net procurement, and expenditure on capital services for labour, goods and services and capital services respectively. 

Revisions

Figure 12 shows the difference between annual growth rates in output, inputs and productivity in this article, compared with the previously published growth rates (ONS 2012a).

Figure 12: Revisions to annual growth rates of output, inputs and productivity, 1997-2010

UK

Figure 12: Revisions to annual growth rates of output, inputs and productivity, 1997-2010
Source: Office for National Statistics

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The output series has been revised slightly downwards by an annual average of -0.1 percentage points per year.  This is mainly due to the replacement of forecasts for Further Education unit costs by actual data, and changes to historical administrative data feeding into the estimates.

The inputs index, allowing for rounding, has been revised downwards by an average of -0.1 percentage points per year from an annual average growth of 2.2% to 2.1%.  This is mainly due to using the latest UK National Accounts figures for local and central government final consumption demand, compensation of employees and net procurement.  These figures were revised back to 1997 in Blue Book 2013 to accommodate an alignment exercise to the public finance figures.

Another source of revision is the revised capital services data that has been used in this article.  The capital services data changes are the result of incorporating the new classification of industries within the capital stock data (SIC07) and improving the processing system to generate the estimates.

Taken over the whole period, revisions to inputs estimates are relatively small.  However, some years show variation of between 1 and 2 percentage points compared to previously published growth rates.  This has the effect of causing a similar level of revision to the productivity growth rate in these years.

Over the period 1996 to 2010, given identical small percentage point revisions to output and inputs estimates on average (to 1 decimal place), the annual average productivity index has subsequently not been revised at all (to 1 decimal place).  Annual average productivity growth remains the same as was previously published, at 0.5% per year over the comparison period of 1996 to 2010.

Background notes

  1. Chain linked Laspeyres volume index

    A methodology paper by Robjohns (2006) explains how ONS annually chain-links data series.  This technique of annually updating the base period weights produces a rate of change in volume terms over the reference period for the data series.

    ONS use this technique to produce estimates of the volume of output and input for public service education, and other measures of government services such as health and social services.  See ONS (2008) for more information on this method and how Laspeyres volume indices are calculated for the estimates in this article.

  2. Interpreting estimates of public service education productivity

    It is important to recognise that the productivity statistics published in this article are based on a concept of output as measured by government consumption expenditure rather than government or state production.  This follows from the submission of the estimates of the volume of government output that are used in this article (prior to any quality-adjustment) to the GDP (E) (expenditure) side of the UK national accounts.  This means that we are using a measure of government purchased output, regardless of what type of business unit produced the output.

    In the case of education, most expenditure is used to fund state providers of education and its administration i.e. maintained primary, secondary and special schools across the four countries of the UK.  There is, however, significant expenditure on private or voluntarily-provided pre-school education which is counted as a component of government output in our articles, even though it is provided (or supplied) by business units which are classified as private business or NPISH units in the National Accounts.

    Traditional measures of productivity, including those published by ONS, use a supply or production framework.  These measures of productivity use Standard Industrial Classification (SIC 07) categories of production as the measure of output and are on a gross value-added (GVA) basis.  Input measures count the labour used in the production of these education services to estimate labour productivity series such as those produced by ONS.  Multi-factor productivity estimates include labour and capital services as inputs.  See Franklin (2012) for an article on multifactor estimates of productivity for the UK economy.

    No account is therefore taken of the way in which these production activities are funded.  For example, in pre-primary education the entire output of these services will be included in the traditional GVA output estimates, but in the expenditure based estimates only that part of the pre-school output that is funded by government is counted as output for pre-school education.

    The interpretation of the expenditure based productivity estimates presented in this article should therefore be taken as a measure of the technical efficiency with which government is enabling the provision of education services for individuals in the UK (from whatever type of business unit) not producing that service itself.  Caution should therefore be used when considering the differences between productivity measures published using the expenditure approach and those using the traditional production approach.  Jurd (2011) and Phelps (2010) describe some of these differences in approach in more detail.

  3. Quality and Methodology Information (QMI)

    There is a QMI paper which describes the intended uses of the statistics presented in this article, their quality and a summary of the methods used to produce them.

  4. Education Sources and Methods paper

    There is a sources and methods paper which describes the methodology of producing these statistics.  A worked example is also provided which provides a simplified simulation of how the statistics are generated.

  5. The new ONS website

    The launch of the new ONS website in August 2011 has brought changes to the design and format of statistical bulletins and articles.  The article main body is available in html and pdf format with detailed data tables available as Excel spreadsheets.  You can follow ONS on Twitter and Facebook, and watch our videos on YouTube.

  6. The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

    Designation can be broadly interpreted to mean that the statistics:
    • meet identified user needs;
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    Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.

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    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

References

  1. Atkinson (2005) - Atkinson review: final report.  Measurement of Government Output and Productivity for the National Accounts.  Palgrave MacMillan, UK.

  2. Department for Education (2013) - Academies Annual Report Academic Year 2011/12.  Available at:
    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/206382/Academies_Annual_Report_2011-12.pdf

  3. Eurostat (2001) - Handbook on price and volume measures in national accounts.  Available at: http://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/publication?p_product_code=KS-41-01-543

  4. Franklin, M (2012) - Multi-factor Productivity (Experimental) - Indicative Estimates, 2010.  Available at:
    http://www.ons.gov.uk/ons/rel/icp/multi-factor-productivity--experimental-/indicative-estimates-to-2010/index.html

  5. Jurd, A (2011) - Public service labour productivity Available at: http://www.ons.gov.uk/ons/rel/psa/public-service-productivity/public-service-labour-productivity/index.html

  6. ONS (2012a) - Public Service Productivity Estimates: Education 2010.  Available at:
    http://www.ons.gov.uk/ons/rel/psa/public-sector-productivity-estimates--education/2010/index.html

  7. ONS (2012b) - Quality-adjustment for public service education: triangulation.  Available at: http://www.ons.gov.uk/ons/rel/psa/quality-adjustment-for-public-service-education/triangulation/article--quality-adjustment-for-public-sector-education---triangulation.html

  8. ONS (2012c) - Sources and Methods Paper: Public Service Productivity Estimates: Education.  Available at
    http://www.ons.gov.uk/ons/guide-method/method-quality/specific/public-sector-methodology/articles/index.html

  9. ONS (2008) - Documentation on Current Methods used for National Accounts.   http://www.ons.gov.uk/ons/guide-method/ukcemga/publications-home/publications/archive/documentation-on-current-methods-used-for-national-accounts.pdf

  10. Phelps, M G (2010) - Comparing the different estimates of productivity produced by the Office for National Statistics.  Available at: http://www.ons.gov.uk/ons/guide-method/ukcemga/ukcemga-publications/publications/index.html

  11. Robjohns (2006) - Methodology notes: annual chain linking.  Economic Trends 630, May 2006. http://www.ons.gov.uk/ons/rel/elmr/economic-trends--discontinued-/no--630--may-2006/methodological-note--annual-chain-linking.pdf

  12. Wolf, A (2011) - Review of vocational education – the Wolf Report.  Available at: https://www.education.gov.uk/publications/standard/publicationDetail/Page1/DFE-00031-2011

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