The government is committed to improving Civil Service productivity. This includes reducing bureaucracy by adopting digital technology and AI tools, streamlining approval processes, and establishing a higher-skilled civil service with stronger accountability for performance.

Through automation of routine administrative tasks, we are freeing up civil servants to focus on high-value casework and delivering better services to the public. For example, the incubator for AI (i.AI) tool "Consult", has publicly supported 38 consultations across 10 departments, saving tens of thousands of administrative hours and millions of pounds.

The Cabinet Secretary is also leading a wide-ranging review of the permanent Civil Service to set out a vision for its future as an efficient, world class institution serving the elected government of the day. The review will report before summer 2027. Its final report will include proposals to strengthen accountability and capability across the Civil Service, with a focus on delivery, innovation and productivity, and public trust.

The Government's ambition is to support good growth across all parts of the United Kingdom. As set out in the Prime Minister's recent Machinery of Government Statement, No10 North will be responsible for driving good growth through devolution and working in close partnership with local leaders, businesses, and communities to strengthen place-based growth.

We are also committed to fundamentally rewiring the way our country works, transferring greater powers, funding and accountability to the local leaders who know what it takes to drive growth and productivity in their areas.

The government has invested £10m into Team Derby – a city wide partnership between business and regional government designed to turn major national investments into local jobs, skills and regeneration opportunities. The wider East Midlands is receiving £2bn via the Transport for City Regions fund which will enable design of a new mass transit system to connect Derby and Nottingham and drive growth and productivity by better integrating transport networks.

The Chancellor has announced that the Green Book discount rate will be reduced from 3.5% to 3.0%, in line with recommendations from independent academics. This will place greater value on the long-term benefits of investment and strengthen the case for transformational projects that drive growth – wherever they take place.

At Budget, the government will publish a fiscal devolution roadmap which will set out a path to replacing grants from central government with a share of local income tax for every mayor beginning in 2028, such that where a region grows its tax base, it benefits from the increased receipts. This will sit alongside greater retention of the revenue from business rates for local councils and strategic authorities. The long-term certainty of funding via taxation will provide more flexibility and enable greater investment to fund interventions that will deliver a return.

The Government is supporting businesses to adopt AI in ways that boost productivity and create opportunities for workers.

In June, we launched the Pro-Worker AI Adoption Prize, recognising organisations that use AI to raise productivity, equip workers with new capabilities and create jobs. Through AI Skills Boost, we are providing free AI training and will help 10 million workers gain essential AI skills by 2030. The Early Careers Jobs Alliance will support continued access to high-quality opportunities for young people.

We are also strengthening evidence on AI’s labour market impacts through the AI Economics Institute, monitoring effects on jobs and skills.

Defence is developing a productivity measurement framework to support implementation of the Strategic Defence Review and the Defence Investment Plan. The measures under consideration include indicators of industrial output and workforce productivity, investment in research and development, procurement cost and schedule performance, production throughput and unit costs.

Work is underway to confirm the availability and quality of the underlying data, establish appropriate baselines, and agree reporting and governance arrangements. The framework is also being developed in support of the Government’s Modern Industrial Strategy and its Defence Sector Plan.

The government is taking a range of steps to improve labour productivity in the public sector - that is, to increase public services output per hour worked. I will touch on a few of them.

Central to this is investment in artificial intelligence and technology to reduce administrative burden and free up staff time for frontline delivery.
More broadly, the government is investing in productivity-enhancing reform across public services, including up to £10 billion for NHS technology and digital transformation, £2.1 billion to modernise HM Revenue and Customs' information technology and data infrastructure, and £1.9 billion for cross-cutting digital transformation across government.

The government is also committed to improving Civil Service productivity. This includes reducing bureaucracy by adopting digital technology and AI tools, streamlining approval processes, and establishing a higher-skilled civil service with stronger accountability for performance.

Through automation of routine administrative tasks, we are freeing up civil servants to focus on high-value casework and delivering better services to the public. For example, the incubator for AI (i.AI) tool "Consult", has publicly supported 38 consultations across 10 departments, saving tens of thousands of administrative hours and millions of pounds.

The Cabinet Secretary is also leading a wide-ranging review of the permanent Civil Service to set out a vision for its future as an efficient, world class institution serving the elected government of the day. The review will report before summer 2027. Its final report will include proposals to strengthen accountability and capability across the Civil Service, with a focus on delivery, innovation and productivity, and public trust.

Office for National Statistics data indicates that both London and the South East had productivity levels above the UK average in 2023 (the most up-to-date available data). All other regions had productivity levels lower than the UK average, with the lowest levels in Wales (15.1% lower than average) and West Midlands (14.8% lower than average).

Differences in productivity reflects a number of factors, including differences in historical infrastructure and capital investment and the sectoral composition of a region's economy.

The Government is committed to supporting regional growth: fundamentally rewiring the way our country works, transferring greater powers, funding and accountability to the local leaders who know what it takes to drive growth in their areas. In support of this, the government is investing in the infrastructure needed to support our city regions and growth corridors to grow, including an up to £45bn commitment to Northern Powerhouse Rail. The Government is maintaining momentum on our broader Northern and Oxford-Cambridge Growth Strategies, including a new £150m scale-up fund aimed at the fastest growing businesses in the North of England, delivered by the British Business Bank.

An ONS study in 2021 (Productivity in the construction industry, UK - Office for National Statistics) concluded that both the level of productivity, and the rate of productivity improvement in the construction sector, have historically been below that of the wider economy, and have not changed much in decades.

The Government is addressing this challenge through investing £625m in the Construction Skills Challenge, £85m in the Industrialising and Digitalising Construction Challenge, and has also worked with the industry to develop a Publicly Available Specification, PAS 4010, which will create a consistent approach to managing productivity improvement in the sector.

Implementation work is currently underway to develop further details for each individual pilot. Detail regarding which treatments, including for rare conditions, are included, how each pilot will function, and how stakeholders will be involved are yet to be determined. Groups including the Charity Medicines Access Coalition and the Association of Medical Research Charities have been involved in the development of pilot concepts and will continue to be consulted. These groups collectively represent hundreds of organisations, including those representing people affected by rare conditions.

Getting young people into work is vital for driving growth in every postcode. Higher youth participation helps expand the workforce, reduce the risk of long-term detachment from the labour market and unlock economic potential across the country.

The Government acknowledges that there are significant challenges facing young people in the world of work. These challenges have been building for some time, with the number of young people not in employment, education or training (NEET) rising by over 100,000 in the last five years of the previous Government. We have also seen a growing challenge from ill health.

That is why the Government is investing £2.5 billion over the next three years in the Youth Guarantee and Growth and Skills Levy, supporting almost one million young people and creating up to 500,000 opportunities to earn and learn. Alongside this, Alan Milburn's independent review is examining the drivers of rising youth inactivity and identifying potential areas for reform. The Government will consider the review's recommendations carefully when it is published in the autumn.

We recognise that long-term ill health is more prevalent in lower-income communities. Through the 10-Year Health Plan, we are targeting health improvement activity and resources towards communities with the greatest need to improve health outcomes and support economic growth.