Last year, the Office for National Statistics (ONS) here in the UK hit the headlines for all the wrong reasons. Falling response rates to its Labour Force Survey – the main source of official labour market data – caused the Bank of England, the government and private-sector economists to question the reliability of employment, unemployment and related statistics. The ONS responded that it was not planning to fix the data problems until 2026 or 2027. That was widely seen as an inadequate response from an organisation with a statutory responsibility to maintain the quality of official data and access to considerable resources – an annual budget of nearly £400 million and over 5,000 employees.
Last December, I wrote for CapX discussing this issue, but in the meantime, things have gone from bad to worse for the UK statistical authorities. The ONS has decided to suspend the publication of all its producer price indices, which are used to track input and output prices for manufacturers and services industries. These figures are not expected to be published again until at least the summer.
Other critical reports on the performance of the ONS have emerged in the past month or so. The widely respected Institute for Fiscal Studies has argued that a £2.3 trillion shortfall in the UK’s measurement of household wealth has arisen due to a methodological error. This is not a trivial sum of money for the UK economy – it is equivalent to about 80% of UK GDP. A report last month by the Institute for Government pointed to poor morale and management problems within the ONS.
To cap it all, the Public Administration and Constitutional Affairs Committee of the House of Commons announced last week that it would carry out a wide-ranging inquiry into the governance and performance of the UK Statistics Authority (UKSA). The inquiry will examine the extent to which the UKSA is operating effectively, including the performance of the two bodies it oversees, the ONS and the Office for Statistics Regulation (OSR).
The Committee has listed four key areas it wants to investigate:
- How well served are policy-makers, researchers, businesses and citizens, by ONS data and the services it provides?
- How is the UK’s data environment evolving, and what challenges and opportunities does this present official statisticians and analysts?
- How successful has the OSR been in identifying issues with official data, and making the case for improvements?
- How does the UKSA Board carry out its statutory functions, and how involved is it in the decisions taken by senior leaders at ONS and OSR?
There are two powerful undercurrents flowing through this list of issues. First, there is widespread dissatisfaction among users of UK official statistics. I can vouch for this from my own experience as a user of UK official data in my business and policymaking career – as well as many discussions with other users of official statistics over the years. The ONS and UKSA hierarchy (which overlap) is prone to making up its own mind on key statistical issues and then taking a highly defensive position when the inevitable backlash arrives. For example, the ONS and UKSA have staunchly defended their view that CPIH is the ‘official measure’ of UK inflation since 2017, including giving it prominence in press releases and on its website, whereas it is CPI which is used to measure inflation for most purposes and which is quoted almost exclusively in the media and financial markets. Another recent ‘user-unfriendly’ ONS suggestion from 2023 is the idea of cancelling the 2031 census, which has been widely rejected by users of official statistics.
The second undercurrent is that the current regulatory structure is not bringing to light problems in the conduct and management of the ONS which are affecting the quality of UK official statistics. One reason for this is that the regulatory bodies – UKSA and OSR – are too close to the main provider of UK official statistics (the ONS), rather than adopting arms-length regulatory oversight. In fact, the three most senior ONS executives actually sit on the Board of the UK Statistics Authority.
Another observation which has been made by some commentators on the present structure of UK official statistics is that too much power and responsibility flows through the position of National Statistician, currently Ian Diamond, who heads up the ONS. On the ONS website, Diamond’s responsibilities are listed as follows: ‘UK’s National Statistician, Chief Executive of the UK Statistics Authority, Head of the Government Statistical Service (GSS) and Head of the Government Analytical Function (AF).’ Having the skills and capabilities to carry out all these responsibilities efficiently and capably would require super-human abilities.
Our statistical authorities now find themselves in the firing line of a powerful parliamentary committee. Things aren’t looking good for our official statisticians.
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