Ministers will need to invest more in official statistical services if they wish to upgrade the information available on public sector productivity, a report has concluded.

Publishing the interim conclusions of his study of government output and productivity, Sir Tony Atkinson indicated that an extensive programme of future work would also be needed in order to produce meaningful statistics.

The review was prompted by concerns that official data was failing to pick up productivity gains in areas such as schools and hospitals.

And Sir Tony warned ministers that the data can only be gathered if more resources are allocated to assessing it.

"If the government wishes to have reliable estimates of government output and productivity, then the statistical resources have to be supplied," the report said.

The interim report suggests that public services output should be measured by the "incremental contribution to individual or collective welfare, that is, by the value that the service adds".

Such a move would mean measuring and including the quality of services in the data.

Health data

The study highlighted the measurement of health care as one area where there were justified concerns.

It said the figures used in the national accounts do not include quality measures which are an essential part of output; assume that health care activity growth in England is a proxy for all UK activity; and rely on the General Household Survey to estimate outputs of general practitioners and practice staff.

"For the longer term, we see benefits in further work to explore new measures of NHS work which combine separate activities into 'care pathways', to give the clearest picture of value added by the NHS," noted the report.

"We consider it important that developments in NHS information systems, while intended primarily to support patient care, should also support better future analysis of health care outputs."

Education improvement

Sir Tony also said more could be done to improve education data.

"To take education as an example, performance on key stage tests and GCSEs shows something about the quality of the education service," he said.

"We are working with departments on ways of using this sort of information to measure government output for the national accounts."

But he also stressed the importance of resources if necessary changes are to be delivered.

"Public services are not only self-evidently important in their own right, but also constitute a significant share of GDP and deserve a commensurate share of the effort which goes into its measurement," he said.

"These resources are required not only to measure outputs but also to provide more reliable information on inputs."

World leader

Despite setting out ways in which official statistics can be improved, the report also praised the Office for National Statistics for being a "world leader" in measuring government output.

"But the first generation methods need to be progressively refined, as was done with the new health output measure introduced for the 2004 national accounts," said Sir Tony.

"Our interim report proposes a set of principles to govern the development of the measurement of government output and productivity, in line with international conventions.

"The report is about methods; we are not presenting any new statistics for output or productivity."

A final report on the statistics is due to be completed by January 2005.