Businesses must be the “prime movers” in boosting Britain’s productivity, John Lewis chairman Sir Charlie Mayfield said this week, following the government’s announcement that it will create a UK Productivity Council.
Outlining the plans during his first Autumn Statement last week, chancellor Philip Hammond said the business-led initiative would aim to boost management skills and productivity.
Mayfield, who has been outspoken about the UK’s productivity problem in the past, said: “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.”
Doug Gurr, UK country manager at Amazon, welcomed the council and said the etail giant would become an active member. “Tackling the UK’s productivity gap is crucial to Britain’s global competitiveness and to the health of every enterprise,” he added.
Lady Barbara Judge, chairman of the Institute of Directors, said: “The productivity challenge is one that Britain simply must meet if we are to continue to hold a place at the economic top table in the 21st century.
“This council will be a key part of equipping business leaders with the skills and information they need to grow and ensuring that prosperity spreads across the whole country.”
The UK’s productivity gap currently stands around 36 percentage points behind Germany, 30 percentage points behind the US and France and 10 percentage points behind Italy, according to figures from the Office for National Statistics.
Analysis from consultancy firm McKinsey & Company suggests that a modest improvement across a broad base of firms could unlock over £100bn of gross value added (GVA) every year.
The UK Productivity Council will be private-sector led and receive £13m in seed funding form the government, phased over three years. It will have an advisory board, chief executive and a leadership team of around five people, supported by up to 15 other employees.
It will develop a series of tools to help businesses assess their productivity in relation to others and offer tools to help them improve, as well as connecting firms to see what ‘good’ looks like either in their local area, region or supply chain.
It will also create regional, employer led hubs to promote productivity, share good practice and offer peer-to-peer coaching, starting in the North West with a pilot programme focused on manufacturing in early 2017.