Following the Chancellor’s announcement in the Autumn Statement that the government is to fund a business-led initiative to boost management skills and productivity, a UK Productivity Council will be created to encourage and support UK businesses.
The UK suffers from a serious and long-standing productivity gap, currently standing around 36 percentage points behind Germany, 30 percentage points behind the US and France and 10 percentage points behind Italy.
Analysis suggests that a modest improvement across a broad base of firms could unlock over £100 billion of Gross Value Added (GVA) every year.
The proposal to create a productivity council comes from work led by several U.K. business leaders in conjunction with leading industry bodies including the CBI and IoD. The Council will be private sector led and will receive £13 million in seed funding from the Government, phased over three years.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, comments, ‘For many ‘productivity’ is the language of economists, but it’s also critical to a healthy heartbeat for the economy, for wages and for competitiveness.
‘While Government has a key role to play in creating the conditions for growth, businesses have to be the prime movers in boosting Britain’s productivity. I welcome the Government’s support for a UK Productivity Council which will encourage and support businesses.’
The Council will have an advisory board, a chief executive and a leadership team of around five people, supported by up to 15 staff. It will also draw on the expertise and advice of the UK business leaders who have contributed to this work to date.
Business secretary Greg Clark adds, ‘Boosting productivity is a key part of this government’s industrial strategy, making sure the UK economy is fit for the future.
‘That’s why last week we announced the £23 billion National Productivity Investment Fund, including £13 million for the new UK Productivity Council. I look forward to seeing the Council’s work in helping companies to prosper and grow.’