The government faces ”a productivity imperative” of providing improved services, but does not have a way to determine if it is up to that challenge, according to a report by a global consulting firm.

Because of budget cuts, the Bureau of Labor Statistics stopped keeping score on government productivity in 1994, making it difficult to gauge overall governmental performance, the report from McKinsey & Co. said.

”The statistics suggest that government lagged private sector productivity up until that point and our hypothesis is that, since then, this gap may well have grown,” the authors wrote.

For the government to address new national priorities and cope with growing programs, it needs to understand what drives private-sector gains in productivity and needs policymakers to create support for higher levels of federal performance, the report said.

As part of their recommendations, the McKinsey consultants called on the White House and Congress to set a ”government-wide productivity target” to be accomplished within eight years.

”This would act as a political ’call to arms,’ and have the managerial advantage of compelling sustained effort. We believe it is realistic,” the authors wrote.

They noted, ”Our experience working with corporations has demonstrated that, by year eight, major transformations in performance are possible.”

For short-term assessment of programs, the report urges policymakers to create an entity independent of the White House and Congress. Much like Morningstar Inc. analyzes stocks and mutual funds and provides investors with information, the public could use a ”Gov-Star” to obtain and compare data from federal programs, the report suggests.

The McKinsey report also recommended allowing managers to keep a share of productivity gains to bolster front-line services, enhancing management skills at agencies, creating a chief operating officer for agencies, and strengthening the management policy staff at the White House budget office.

The report, released this week, was written by Nancy Killefer, managing partner of McKinsey’s Washington office and a former assistant secretary for management at the Treasury Department; Lenny Mendonca, chairman of the McKinsey Global Institute, an economics think tank within McKinsey; Thomas Dohrmann, a McKinsey partner in Washington, and Tony Danker, a public-sector specialist in the firm’s Washington office.

”While there is an abundance of information about every government program, there is little genuine transparency about how they are performing,” the authors asserted.

The report acknowledged that government productivity ”has always been something of an illusive concept,” in large part because of the nature of federal programs. Some programs ”simply don’t have a quantifiable output” and others cannot show whether their activities are adding value and how that value changes over time, the study said.

Asked about the McKinsey report yesterday, Robert J. Shea, counselor to the deputy for management at the Office of Management and Budget, called productivity ”an euphemism for government program performance,” and said the report makes important points.

Shea questioned whether the government needs a single measure of its productivity, suggesting that finding ways to focus on ”program types” – such as community development, education, environmental protection – might produce more useful comparisons and understanding of program results.

The Bush administration provides ratings on the effectiveness of programs at ExpectMore.gov, Shea said. He said the information ”we post would benefit from validation by an outside source” and hopefully spur more debate.

Patricia McGinnis, president of the nonprofit Council for Excellence in Government, applauded the report’s call for a ”Gov-Star” or ”infomediary” that would independently validate data collected on the performance of federal programs.

Noting that Congress has shown little interest in the OMB’s program ratings, McGinnis said, ”I think there is a huge potential here. . . . It could be a voice of credibility in a nonpartisan way.”

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