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Economy · Productivity · SWOT and action plan

What could raise productivity? The SWOT and action plan

No single policy closes the gap. The plan below groups options already assessed in the UK plan by what they aim to move, puts them in a proposed order, and says what to measure. It is our synthesis, not government policy, and most gains are estimates until measured.

Evidence last reviewed 20 October 2026

Strengths, weaknesses, opportunities and threats

Output per hour grew 2.2% a year to 2007 and 0.4% a year since. These are the findings the plan responds to. Each is the same record that appears in the UK SWOT, with its period, geography and source.

Strengths

What the UK can build on

  • The UK is the world’s second-largest exporter of services and has a strong university research base — assets the Resolution Foundation and LSE’s Economy 2030 Inquiry says a growth strategy should build on.

    United Kingdom · Data to 2023 (report published December 2023) · record economy-s1

  • A ten-year infrastructure plan is in place: at least £725bn of government funding over the decade and an online pipeline of projects with their funding status, updated at least every six months.

    United Kingdom · June 2025 onwards · record grow-s2

  • Public net investment is forecast at 2.5–2.8% of GDP to 2030–31, well above its post-2010 low of 1.5% in 2013–14.

    United Kingdom · 2013–14 outturn; 2026–27 to 2030–31 forecast · record grow-s3

  • Planning reforms are in force: the National Planning Policy Framework was revised in December 2024 and replaced by a new version on 17 August 2026, and the Planning and Infrastructure Act 2025 became law on 18 December 2025. What they add in homes or output has not yet been observed.

    England · December 2024 to August 2026 · record economy-s2

Weaknesses

What holds productivity back

  • Output per hour worked grew about 2.2% a year from 1990 to 2007 but about 0.4% a year from 2007 to 2025. In 2025 it was 6.8% above 2007 and 0.7% below its 2023 level.

    United Kingdom · 1990–2025 (annual averages of four quarters) · record economy-w-productivity

  • Among the G7, UK output per hour grew second slowest from 2007 to 2021, and its growth rate fell further than any other, from 2.0% a year in 1997–2007 to 0.3% a year. In 2021 UK output per hour was fourth of the six members with data, with output per hour 18% higher in France and 25% higher in the United States.

    G7 (Japan to 2020) · 1997–2021, published 11 January 2023 · record economy-w-g7-productivity

  • Total investment was 18.7% of GDP in 2024, the lowest in the G7 (the other six had a median of 21.8%); the UK was lowest in 23 of the 33 years since 1992.

    United Kingdom and G7 · 2024 (G7 comparison since 1992) · record grow-w1

  • Output per hour was below the UK average in 10 of 12 nations and regions in 2023: London produced about 29% more per hour than the UK average and Wales about 15% less.

    UK nations and English regions (ITL1) · 2023 · record grow-w-regions

  • The government reports flat on-site labour productivity in construction and a significant construction workforce deficit.

    United Kingdom · 2025 (citing 2024 analysis) · record grow-w2

Opportunities

What could raise it

  • Using pipeline data to sequence projects against the workforce, grid and planning capacity they share could turn committed funding into completed assets sooner.

    Depends on: Pipeline projects are classified by approval and funding status, and prerequisites (consents, connections, skills) are scheduled before dependent projects.

    our synthesis · record grow-o1

  • Living standards could rise faster if investment, homes where the jobs are and support into suitable work move together, rather than relying on one headline growth target.

    Depends on: Each is judged on outcomes — occupied homes, sustained jobs, assets in use — and the gains reach lower-income households, not only the average.

    our synthesis · record economy-o1

  • Output per hour could rise if proven management and technology practices spread from the best firms to the rest. In a randomised trial in India, free management consulting raised productivity by about 11%; the UK’s own business-support schemes have not yet shown a productivity effect.

    Depends on: Support is tested against a comparison group with productivity as the outcome, and scaled only if it works. The trial covered large firms in one industry abroad and does not show that lighter-touch UK schemes will.

    our synthesis · record economy-o-adoption

  • The OBR estimated in March 2025 that the December 2024 changes to the National Planning Policy Framework would add about 170,000 homes over five years and raise the economy’s potential output by about 0.2% by 2029–30. The estimate was made before the Planning and Infrastructure Act 2025 and is not an estimate of that Act.

    Depends on: Councils apply the revised framework and the permitted homes are built. The OBR calls its own judgement uncertain, and in March 2026 said the effect had “yet to meaningfully materialise in outturn”.

    United Kingdom · March 2025 forecast, for 2025–26 to 2029–30 · modelled estimate · record economy-o2

Threats

What could make it worse

  • Construction capacity, financing costs and stop-start decisions can block delivery; the NAO finds spending decisions have been short-term and reactive.

    record grow-t1

  • Regulatory reforms need evidence of results: the NAO found regulators taking action, but could not establish a material growth effect because government lacked the data. Growth objectives also require explicit trade-offs with protections for people and the environment.

    United Kingdom · NAO review, 21 January 2026 · record economy-t-regulation-outcomes

  • Growth need not reach lower-income households: the Inquiry describes the UK’s mix of slow growth and high inequality as a “toxic combination” for low- and middle-income families.

    record economy-t1

  • Energy and food price shocks pass quickly into household costs: CPI inflation peaked at 11.1% in October 2022, and prices do not fall back when the rate does.

    record economy-t2

See the whole-UK SWOT →

What the plan has to move

  • Investment

    18.7% of GDP

    Total investment in 2024: the lowest in the G7 (other six: median 21.8%). Workers with more and better equipment make more per hour.

    See the evidence →
  • Research and ideas

    2.8% of GDP

    Research and development spending in 2023: fourth of seven in the G7. New methods and technology raise output per hour once firms adopt them.

    See the evidence →
  • Skills and health

    2.74 million

    people aged 16–64 were out of work through long-term sickness (Aug 2026). A skilled, healthy workforce produces more per hour, and more people in work raises output per head.

    See the evidence →
  • Management and technology

    +11% in a trial

    In a randomised trial in India, better management raised productivity 11%. The UK’s own schemes have not yet shown an effect, so the gain is unproven here.

    See the evidence →
  • Homes, power and transport

    10 of 12 regions below average

    Output per hour is lowest in Wales. Where homes, grid connections and transport are hard to build, firms and workers cannot move to where they are most productive.

    See the evidence →

Output per hour worked

+6.8% since 2007

which in the long run sets the room for higher pay, tax receipts and public services.

What could change, and how soon?

This is a proposed order of existing options. It has no deadlines, no funding and no commitment from any government. Starting an action is not the same as seeing the benefit: productivity moves only after people are trained and in work and projects are finished and in use.

  1. Step 1 · proposed order

    Short term: decisions and tests that need no new building

    What would start: Publish which pipeline projects are approved and funded. Settle the order of grid connections. Design a comparison test for business support before spending more. Name the blockers on priority housing sites.

    When benefits arrive: Productivity does not move at this stage. What arrives is clearer information, so the later money goes to what works.

  2. Step 2 · proposed order

    Medium term: build capacity

    What would start: Expand the training places employers say they cannot fill. Join health, childcare and employment support in the areas with most people out of work. Test one transport corridor against a comparison. Decide whether pension money can reach UK assets without simply moving existing investment.

    When benefits arrive: The first gains are more people trained and in work, and more completed projects. Output per hour follows only once the new workers and assets are in use.

  3. Step 3 · proposed order

    Long term: turn ideas and local powers into output

    What would start: Move tested research into products and wider use. Extend city-region growth powers where the first areas show results.

    When benefits arrive: Benefits arrive over many years and are hard to separate from other changes. Treat any promised figure as an estimate until measured.

The options, by what they aim to move

Proposals to consider. The bodies named below would need to agree to deliver them; responsibility is not a recorded commitment. Follow the links for costs and evidence.

Invest more, and finish what is funded

Workers produce more per hour when they have more and better equipment, power and infrastructure. These options aim at steadier public investment, grid connections and private investment.

  • Turn investment promises into a deliverable pipeline

    Publish which investment projects are funded, when they should finish and what has actually been built.

    Who could deliver it: Treasury, infrastructure bodies, departments and devolved governments.

    Main trade-off and delivery needs

    Double-counting housing/grid benefits; shared workforce bottlenecks.

    Distinguish funded projects from aspirations; sequence resources; name owners and independent assurance; protect maintenance.

    Cost: Only part of the cost has been estimated.

    Costs, drawbacks and evidence →
  • Connect the power Britain needs

    Improve electricity connections and power supply for industry.

    Who could deliver it: Energy departments, system/network operators and regulators.

    Main trade-off and delivery needs

    Binding specialist/kit constraints; moving charges to households; stranded assets.

    Separate queue management, network reinforcement and industrial levies; identify projects, kit, engineers and regulator decisions.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →
  • Pension money into UK assets

    Examine how pension funds could invest more in the UK.

    Who could deliver it: Treasury, pension trustees, regulators and investment managers.

    Main trade-off and delivery needs

    Portfolio concentration and poorer returns; existing pledge fails additionality.

    Define a change beyond existing commitments; test investable demand, fiduciary safeguards, liquidity and net additional capital.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →
  • Tax incentives for business investment

    Not yet assessed

    Full expensing is already law. The official estimate of its effect is modelled, not observed, and no assessed option compares it with alternatives.

    What the official estimate says →

People and skills

Output per hour depends on the skills of the people doing the work, and on how many people who want to work can. These options target training where employers report shortages, and work, health and childcare barriers.

  • Skills in the building trades

    Develop the skills needed to build homes.

    Who could deliver it: education departments, skills bodies, colleges and employers; nation-specific systems.

    Main trade-off and delivery needs

    Displacement of existing trainees; low completion; insufficient trainers.

    Identify trades and locations; secure paid placements, trainers, facilities and employer demand; measure completion and retention.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →
  • Employer-linked shortage training beyond construction

    Test training linked to employer placements where there are proven shortages outside construction.

    Who could deliver it: skills bodies, colleges and employers.

    Main trade-off and delivery needs

    The main risks still need to be assessed.

    Specify sector, cohort, placement and recognised completion; cost tuition, trainee support, employer time, trainers and evaluation. Track earnings and sustained employment. Proposed owners: skills bodies, colleges and employers.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →
  • Offer evidence-based employment support alongside healthcare

    Link employment support with healthcare and test whether it helps people into work.

    Who could deliver it: the Department for Work and Pensions, health commissioners and local employment partners.

    Main trade-off and delivery needs

    Clinical displacement; unsuitable pressure to work; variable fidelity.

    Specify cohort and voluntary offer; secure clinical referrals, trained employment specialists, employer links and linked-data evaluation.

    Cost: Only part of the cost has been estimated.

    Costs, drawbacks and evidence →
  • Make childcare places work for working parents

    Add childcare places and hours where local shortages stop parents working.

    Who could deliver it: councils, education departments and providers in England; separate devolved arrangements.

    Main trade-off and delivery needs

    The main risks still need to be assessed.

    Verify unmet demand, existing awards and provider viability; cost places, workforce, premises, operating subsidy and parental fees. Track access and sustained parental work. Proposed owners: councils, DfE and providers in England; separate devolved arrangements.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →

Firms, ideas and technology

Productivity rises when better methods and technology spread from the best firms to the rest. The evidence so far says this is hard to do from the centre, so these options are about testing before scaling.

  • Existing-firm management and technology adoption

    Test practical management and technology support for existing businesses, measuring whether it helps them produce more.

    Who could deliver it: business department, local business-support bodies and delivery partners.

    Main trade-off and delivery needs

    The main risks still need to be assessed.

    Define firm eligibility and existing offer; cost advisers, adoption support and evaluation, including firm contributions. Measure additional productivity, survival and displacement. Proposed owners: business department, local business-support bodies and delivery partners.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →
  • Turn research into products and adoption

    Help research become products that people and businesses use.

    Who could deliver it: Business/research departments, UKRI and public buyers.

    Main trade-off and delivery needs

    Deadweight subsidies; concentrated gains; failed investments.

    Separate spinout terms, procurement trials, grants and firm adoption; define market failure, beneficiaries and comparator.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →
  • Spreading artificial intelligence and digital tools across firms

    Not yet assessed

    Use of AI is rising quickly, but no study shows what it does to productivity in UK firms, and no option on this theme has been assessed yet.

    What the evidence shows so far →

Places, homes and planning

Output per hour is lower than the UK average in most regions. These options target the supply of homes, local growth powers and transport access to jobs.

  • Turn housing permissions into completed homes

    Focus on getting homes built after planning permission is granted.

    Who could deliver it: Planning authorities, housing bodies, developers and utilities; devolved responsibility.

    Main trade-off and delivery needs

    Binding construction/infrastructure constraints; environmental and displacement harms.

    Select sites; resolve land, planning, utilities, transport and viability; commission tenure mix and delivery agreements.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →
  • Test local powers to improve jobs and pay

    Examine local growth powers against their effect on access to jobs, output, pay and who benefits.

    Who could deliver it: Central government, mayors/local authorities; nation-specific arrangements.

    Main trade-off and delivery needs

    Institutional change and capacity gaps; gains may relocate activity.

    Specify powers, stable budgets and accountability; integrate transport, housing and skills; assess local capacity.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →
  • Transport access to jobs

    Test a transport change where unreliable, costly or limited services prevent people reaching jobs.

    Who could deliver it: transport authorities/operators and relevant national bodies.

    Main trade-off and delivery needs

    The main risks still need to be assessed.

    Name route/mode, baseline users, service hours and comparator; cost operation, capital, subsidy and maintenance. Assess accessibility and displacement, not gross local job counts. Proposed owners: transport authorities/operators and relevant national bodies.

    Cost: The extra cost is not yet known.

    Costs, drawbacks and evidence →
  • Closing the gap for the lowest-productivity regions directly

    Not yet assessed

    City-region growth powers and transport access are the closest assessed options. None is aimed at the lowest-productivity regions as such, and no study measures a regional productivity effect.

    Where output per hour is lowest →

Where these sit in the UK plan

Nothing here is a new option. Each is an assessment already in the national action plan, with the same title, evidence and rating. This page adds the productivity view: the weaknesses and opportunities above are now recorded in the economy plan and feed the whole-UK SWOT.

Every option above is a current assessment in the UK national action plan. Membership of a list is a reviewed editorial choice, not a ranking.
OptionAims to movePlace in the UK plan
Turn investment promises into a deliverable pipelineInvest more, and finish what is fundedOn the Growth and prosperity list
Connect the power Britain needsInvest more, and finish what is fundedOn the Growth and prosperity and Resilience and sustainability list
Pension money into UK assetsInvest more, and finish what is fundedAssessed; kept outside the three lists
Skills in the building tradesPeople and skillsOn the Growth and prosperity list
Employer-linked shortage training beyond constructionPeople and skillsRelated option within A55
Offer evidence-based employment support alongside healthcarePeople and skillsOn the Growth and prosperity list
Make childcare places work for working parentsPeople and skillsOn the Growth and prosperity list
Existing-firm management and technology adoptionFirms, ideas and technologyRelated option within GRP-02
Turn research into products and adoptionFirms, ideas and technologyOn the Growth and prosperity list
Turn housing permissions into completed homesPlaces, homes and planningOn the Growth and prosperity list
Test local powers to improve jobs and payPlaces, homes and planningOn the Growth and prosperity list
Transport access to jobsPlaces, homes and planningRelated option within A57

Open the national action plan →

Evidence from case studies

  • Randomised trial · India (large textile firms near Mumbai)

    Free management advice in Indian textile plants

    Field experiment; results published 2011 (working paper) and 2013 (journal)

    +11%

    productivity in advised plants

    What was done
    Researchers gave free, intensive consulting on modern management practices to a randomly chosen set of plants and compared them with plants that did not receive it.
    What was found
    Adopting the practices raised average productivity by 11%, through better quality, more efficient work and less stock. Owners also handed more decisions to managers and used computers more.
    What it cannot show
    Large firms in one industry in one country, with intensive consulting. It shows that better management can lift productivity, not that a light-touch UK scheme will.
    Lesson for the UK
    The gain came from many firms not knowing the practices existed. That points to spreading known methods, with a comparison group to prove it works.

    Source: Bloom, Eifert, Mahajan, McKenzie and Roberts, Does Management Matter? Evidence from India (NBER Working Paper 16658)

    Relates to: Existing-firm management and technology adoption

  • Official evaluation · United Kingdom (Help to Grow: Management) and England (Made Smarter Adoption)

    What the UK’s own business-support schemes found

    Evaluations published June and July 2026

    Not yet

    a measured productivity effect

    What was done
    Help to Grow: Management gave small-firm leaders a management course. Made Smarter Adoption gave manufacturers advice and support to adopt digital technology. Both were evaluated against similar firms that did not take part.
    What was found
    Help to Grow: Management raised business survival rates, but found no statistically significant evidence of business growth or improved productivity. Its data end in March 2023, and the report says such effects typically take at least five years to appear. Made Smarter Adoption (April 2022 to March 2025): firms reported benefits, and analyses repeating earlier research pointed to higher turnover and employment, but the more robust analysis found no statistically significant effect on turnover, employment or productivity.
    What it cannot show
    Short follow-up. A result that is not statistically significant does not prove there was no effect: the Help to Grow report says the effect could be too small to detect, the economic context difficult or the data late. Both schemes are lighter touch than the Indian trial.
    Lesson for the UK
    Do not scale support before it has been tested against a comparison group, with productivity as the outcome.

    Sources: Department for Business and Trade, Help to Grow: Management phase 1 final evaluation report (11 June 2026); Department for Business and Trade, Made Smarter Adoption: impact and process evaluation (30 July 2026)

    Relates to: Existing-firm management and technology adoption

  • Official estimate · United Kingdom

    Full expensing: a tax change aimed at business investment

    Made permanent in November 2023; official estimate in the November 2023 forecast

    +0.1%

    estimated potential output

    What was done
    Companies can deduct the whole cost of qualifying machinery and equipment from taxable profits in the year they buy it. Making it permanent, rather than temporary, aimed to raise investment for good rather than bring it forward.
    What was found
    The Office for Budget Responsibility estimated that the permanent policy would add £13.9 billion of business investment over its forecast, raise the capital stock by 0.2% in 2028–29 and raise potential output by 0.1%.
    What it cannot show
    A forecast, not an observed result. It estimates a small effect on output even from a large tax change, and says nothing about whether investment has risen as predicted.
    Lesson for the UK
    Tax incentives can move investment, but the official estimate of the productivity gain is modest. Check outturn against it.

    Source: Office for Budget Responsibility, Economic and fiscal outlook, November 2023, Box 2.1

    Relates to: Turn investment promises into a deliverable pipeline

All six case studies →

How we would know it was working

  • Output per hour worked

    The result. Compare the annual growth rate with 0.4% a year since 2007.

    ONS, quarterly · see the figures

  • Investment as a share of GDP

    The main input. The UK has been lowest or near-lowest in the G7.

    World Bank, annual · see the figures

  • Business investment as a share of GDP

    Tests whether tax and policy changes reach firms.

    ONS, quarterly · see the figures

  • Output per hour by region

    Tests whether gains reach the places furthest behind.

    ONS, annual · see the figures

  • Real pay

    Pay is where productivity shows up for most households.

    ONS, monthly · see the figures

Sources and methods (2)

Method notes

  • SWOT points are read from the domain-plan records by id, so this page and the UK SWOT show one text. A point marked “our synthesis” or “modelled estimate” is not an observed fact.
  • Options are listed only if they have a current published assessment. Ideas without one are shown as gaps, not promoted. Placement in a list is the reviewed editorial membership, not a ranking.
  • The proposed order is an editorial sequence of existing options. It invents no dates, costs or funding, and distinguishes starting an action from the arrival of benefits.

Corrections and changes

  • 20 October 2026: New dev-preview page.