Blog: Beyond GPD

I saw a man searching the ground by a lamp post and asked him if I could help. He said he was looking for some keys. He’d dropped them twenty metres away by some bushes, but it was too dark there, so he was looking where there was more light…

Measuring productivity

Gross Domestic Product (GDP) is still in use as a seemingly accurate measure of productivity, and we are given figures at monthly intervals. Many people using them know they are not really worth it – but they feel they haven’t got any alternative (and economics still tends to focus on monetary value).

For the last eighty years, GDP has been the main way to measure a country’s economy, how it changes and how it compares with other countries, but it was known from the start to have major drawbacks. For GDP per head, we total the value of production, divided by the population. This may sound OK for large countries, but if jobs are concentrated in a city, and many people commute in to work, then the GDP will be too high. And what is it measuring?  If one was to walk down a street smashing windows, that would increase GDP.

It misses out resource extraction, environmental impact,  and unpaid work such as open source software, volunteering, household and care work. It ignores changes between the extremely rich and the rest of us. And health.

In any case, measuring growth in a finite world doesn’t really make sense.

For many years, it has been suggested that we should be measuring quality of life, rather than GDP, but this has proved complicated, and information has been lacking. More recently there has been considerable attention to measuring and comparing quality of life – Beyond GDP. For example work across Europe, and the United Nations Conference last January.

What else could we measure?

Here in the UK, the National Audit Office have been investigating what we might want to measure, and whether we are collecting appropriate information to do so. The UK Measures of National Wellbeing framework has tracked national well-being since 2011. There was an extensive review in 2022/23, and the dashboard was expanded from 44 to 60 measures in July 2023. There have been some issues around quarterly figures, so in future the dashboard will only be updated annually, starting in May 2026.

Some statistics do not have very long time periods, so it is not yet easy to look at trends over time. They have had to ignore others because the relevant datasets are not available, or are only just being collected in an appropriate way. To select figures, they have considered:

• Quarterly availability
• High statistical quality and reliability
• UK or GB coverage
• International comparability
• Outcome focussed, not inputs
• Easy to communicate and interpret

These have been gathered under three headings, Individual (eg health), Community (eg social cohesion) and National (eg quality of public institutions).

In addition, they have a headline set of seven measures, which will continue to be updated quarterly, to be used as proxies or leading signals of change. 

Recent results

Mean life satisfaction which had been broadly in line with GDP before Covid diverged sharply during the pandemic and has remained below its pre-pandemic peak, despite GDP per head recovering.

The share of adults reporting good or very good health fell significantly (76% in Q4 2020 to 71% in Q4 2025).

Why is this important for VCFSE organisations?

VCFSE organisations focus more on improving the quality of life than on a pure economic return, but it can sometimes be hard to make the case for support. Using statistics beyond GDP may seem more complicated, but is a better way to find what we are looking for.