Productivity Change in the Public Sector : Innovation, New Public Management and Cultural Resistance to 'Digital Era Governance' in UK Social Security

The analysis of government sector productivity is still in an early stage of development. We look in detail at productivity trends in the UK social security system, which accounts for almost a quarter of total state spending. We look across twenty years, 1998-2008, and in detail at a period of heavy capital investment and modernization spending from 1997-2008 under 'new Labour ' governments which created an integrated Department of Work and Pensions (DWP). During the heyday of ‘new public management' DWP productivity declined despite new IT and buildings, although in recent years there has been some renewed growth. A programme of highly conservative modernization successfully shifted the UK's social security systems into phone-based methods from paper-based ones. But this change also generated an initial storm of non-value-adding phone calls that took years to eradicate, and meant that DWP made virtually no progress in moving customer contacts online throughout this period