Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 280 - 296)



  280. So where do you think the United Kingdom would sit in an international league table of statistics offices in the developed world?
  (Mr Cook) I think it was about six or seven out of ten OECD countries that were in a study, which was last done approximately 1994, maybe 1995. I would have thought since then that we should have changed a little more positively. We have had some really strong developments. For example, in the system of national accounts, the European system of accounts, we are pretty much a strong leader there. There are areas of statistics, such as population and demographic work of national accounts, where we would be up in the handful of countries that actually lead what is going on in the world generally, and provide a very large share of the basic research which countries generally draw on. In the operation of social surveys we have a pretty lean and flexible operation. There are other areas where that is less the case.

  281. According to a table we have here, published by the Netherlands Official Statistics Office, we are right down at the bottom of the league on a number of different indicators: Canada, Austria, Finland, France, Netherlands, Germany, Sweden, Denmark and the United Kingdom. The United Kingdom looks pretty impoverished compared with other national statistics services or offices. This is not quite what you are saying.
  (Mr Cook) One would generally recognise that Canada, Austria and Norway are countries where the resourcing for official statistics has been reasonably well maintained over the last three decades. The strength of a statistical office now reflects as much the investment that was put into systems and processes in the previous decade and the decade before. In making those comparisons, we are clearly in a league that is different from those three countries because of their continuity and strong investment. When it comes to other country comparisons, there are some difficulties at the margin, as you know. Comparing public spending, in terms of centralised and decentralised operations, we still have a lot of activity in places like DETR, DfEE. So there are differences in what is in the starting base.

  282. If I could take up that first point you made, in Germany and France they have similarly decentralised statistical services, yet still perform very much better than the United Kingdom.
  (Mr Cook) If you take Germany and France, for example, Germany has a large part of its official statistical system, in fact, devolved to states. What you would want to do there is to discover whether the state spending does not include what, for example, the Greater London Authority would spend on statistics. So at a state level you are seeing a much larger amount of regional statistics included in the official statistics. If, for example, one looked at things like national accounts and broader national level statistics, one would not put Germany particularly close to the United Kingdom. If one takes France, there is a larger amount of analytical work of what we would regard in the United Kingdom as bordering on policy, done in the French National Statistical Office. For example, the French Statistical Office trains most of the economists in the French Government, which is a great thing, of course. It means that Secretaries of Treasury, or the equivalent in France, have normally worked in the Statistical Office. So there is a very significant difference in the scope of activities. I am not diminishing the value of the comparison but I think it is important to understand what individual countries do. If you take the Dutch, for example, because of a particular situation they have decided to invest disproportionately more than any other country in environmental statistics. Quite obviously, if a high tide is going to come and flood your town, you might worry about it. The Dutch have, in their official statistics, areas of activities that in the United Kingdom might be seen as part of the scientific activity in the state. I am learning about what I can say about the United Kingdom. But in the other direction we separate out the Registration role. So it is not easy to make quick comparisons of the funding bases of countries.

  283. Thank you for that very full answer. Minister, in relation to National Statistics, which is more important: the requirements of Government or other users?
  (Miss Johnson) There is a balance to be struck but it is a balance that we are really interested in, in engaging with users, and actually looking much more widely at the user base. The so-called Rayner Doctrine of the 1980s, which basically said that the purpose of having statistics was for Government purposes principally, and mainly and really to the detriment of looking more widely: in the response that Len Cook has recently made on the PAT 18 initiative, you can see that, in fact, there are quite a lot of those who are going to benefit as well, so sometimes there is not a distinction, of course, between what Government would like to do and those others who are going to benefit very widely from that activity. I think that with time, as the PAT 18 sets are developed, a lot of local authority, local health authority and other users, will find that information as useful at their level of policy and service provision decisions, as central Government will find it to have it broken down at a local level as well. So it is a balance. We are trying to achieve a balance with a much greater input from these users. The website is a good example. There are places where people on the website can record their views, their interest in things, comments on things, where we are seeking to engage much more with users, much more widely than Government Department users, of National Statistics and other statistics. So one thing is a balance between those different users, and the other thing is not always to assume that they are necessarily conflicting requirements. Hopefully, through dialogue, we can arrive at an increasingly better balance between the needs of Government, which obviously do have to be met, and some of these key indicators which we all know are very central in managing the economy or social policy areas, where we have got to have certain things provided for the Government to make key decisions; and many of the other areas, where there can be dialogue and discussion about performance or statistics or the nature of the statistics that Government is collecting and using; where I believe increasingly a wide range of statistical users have a role to play with ONS and National Statistics.
  (Mr Cook) When it comes to the undertaking of a large survey, it is generally initiated because there is a major public policy need, a departmental policy interest, that will justify the funding of it. Having undertaken the survey, then the results of that survey, the way they are presented, fixed, blended with other information and delivered, is very, very much a significant matter of public interest to users generally. For example, many of the surveys we use that make up the information on Social Trends have been justified for a particular public policy need, whether it is a family expenditure survey or crime survey. Social Trends is a very important public statement and its accessibility is a very important part of confidence in the statistical system. I guess the most important public survey we have is, of course, the Census. The success of the Census exists because the public own it. They see it as a very important part of their involvement with the Government. It shapes their identity. It is also part of their way of seeing their communities measured. It is also part of the way in which we hold Government to account as citizens. In many ways the Census fits the broader model you are talking about much more effectively than the great raft of survey-taking activity we do. But certainly the statistical results we produce are very much part of it; presented as part of that broader user interest.

  284. What about business interest? Businesses will often say to me that it is one-way traffic. That they are expected to fill in an awful lot of data but do not necessarily get a lot of useful information back. Are there mechanisms in place to ensure that their needs are also considered by the National Statistics?
  (Miss Johnson) We need to engage more with business in the use of statistics and the statistics that are provided. We have been developing a database of users. Obviously not all businesses are linked up by website and what have you, but those who are can actually register their interests and join targeted e-mailing lists as well, to get back whatever statistics they are interested in receiving. We have also got a number of theme groups looking at different areas of statistics. Those have been reviewing the arrangements in each area. The key theme group papers are also available on the website. I know this sounds like an advertisement for the website but we are very proud of the website, I have to say. The theme groups have also put their draft work plans on the website, so hopefully increasingly we will be able to enable those who would like to engage more with us, who are helping often to provide the data for the statistics, (in actually finding out what you say you would want to make of that data), how we can help them to access it and to make a better use of it. I certainly do think that does include the business community because they are very key players in supplying a lot of the data in the first place.
  (Mr Cook) When it comes to very large firms who, in effect, have the largest burdens, they also tend to be major users of statistics. Very, very much of the imbalance is in smaller firms who have a larger respondent load, not often in terms of the total group because of sampling, but where people are included in samples, they tend to regard themselves as personally having a very large load. There are two things here which are important. One is that we support user groups or representative bodies in terms of their use of statistics. So, for example, the Business Statistics User Group actually represents not only individuals but a lot of bodies such as the various manufacturers' associations, who themselves use the statistics on behalf of their members and often their members are not aware of it. Secondly, and I think this is much more progressive, as we get better at seeing the internet used for the receiving of data—and this is one area where ONS, may I say, has been fairly progressive and we have a lot of work ahead to do that—we will be able to send back to people with their enquiries useful summaries of the results of these surveys. I would imagine that if you were a butcher's shop, there is no reason why we could not send back to you quite cheaply a little analysis of butcher's shop sales in your areas. They are the sort of innovations we need to do. A third thing, an important element as part of our strategy—and I do not believe we do it well enough—is to explain to people, who fill in individual questionnaires, how the data is used. Often you will find statisticians—and I do not think that ONS, to be frank, is excessively different from anyone else—we think that terms like the data is being used for national accounts is extremely helpful, but that it is an area where I see us doing better, particularly with the continued pressure on compliance cost reduction which we certainly get.


  285. You mentioned the Census just now, Mr Cook. Is the Census for next year on track?
  (Mr Cook) Yes, in terms of the basic preparation of the forms; the research to ensure that this will be done well; the development of the field side; the development of the communications programme; the system to collect the information once it is in. We are still doing work on the processes to validate the data but that is all on track to be completed months before they will be needed. So basically the answer is yes.

  286. So you are within the timeframe which was set?
  (Mr Cook) We are hard up against it because it is such a huge operation but the answer is yes.

Mr Fallon

  287. Have you had time yet to have a look at the job vacancy statistics? Can you report your initial findings?
  (Mr Cook) I have only become aware that there is an issue in terms of both the significance that applies to the United Kingdom of these vacancies and how, in fact, we rate-up and obtain national estimates. What we are doing in ONS is moving to measure vacancies in our usual business surveys, so that there will be an on-going process allowing us to rate-up sample results in a way which differs from what exists now, with a rating-up process depending upon historical information.

  288. Could you help us with the phrase "rating-up"?
  (Mr Cook) The information that we get on vacancies, whether it is the administrative process we currently have or any statistical survey that we will have, will only be from a sample; will only represent part of the activity that is taking place, or part of the vacancies that exist. So we have to have some way of knowing what is happening in total. With the sample survey that we have, we will survey a sample of firms. We will know how far that sample represents the whole population and we will, therefore, know how much we can multiply the results of the sample to obtain what is happening in total.

  289. Before you do that, is it safe to construct any kind of meaningful ratio between unemployment and job vacancies?
  (Mr Cook) I think the value in some of these measures is not that the specific ratio statistically is of the same reliability as statistical measures that we usually depend upon, such as the RPI, but being able to see side-by-side what is happening with employment, unemployment and vacancies, which is of particular value. We know there are so many contextual things, which differ in any region, that actually make exact comparisons or creation of ratios less meaningful.

  290. So they have not been meaningful, the ratios that have been chucked around up till now.
  (Mr Cook) I think what is being used is the best estimate of something which is important and very difficult to measure. What is most important about what is being used, is being very clear about how it is being produced and what the limits are. One of the difficulties with the measures we have is that we cannot, of course, as statisticians, define—as we can from information with statistical sample surveys—any particularly sound measure of reliability.

  291. I am asking this because when we last considered this, we were told by the ONS that it was all a "little bit of thumb in the air" multiplication. There might be three times as many vacancies as those reported to job centres.
  (Mr Cook) ONS does not publish figures that are grossed-up. It would not publish figures that are grossed-up, unless their grossing-up had the same degree of reliability as an official statistic.[2] It does not mean to say that people will not find it useful to multiply out and create some kind of gross figure, but we certainly would not expect it to have the same kind of reliability as National Statistics. It certainly would not be published as one. It is not published now as a National Statistic.

Mr Beard

  292. If I can explore that a little further and follow Mr Fallon's questions. We understood there was a problem when statistics on vacancies nationally were being derived. It was not just that you took a sample and then you had to scale that down for the whole population. It was that when you had done that, that the figure for vacancies was very much lower than those you saw around as a check for other means. Therefore, some fiddle factor was applied to the original figure to scale it up. What gave us that unease was the derivation of that sort of fiddle factor. This is the point that Mr Fallon is getting at. It raises the question of how many of the National Statistics are the material coming from surveys direct, from whoever is replying, and how many have been scaled up in this sort of way.
  (Mr Cook) First, can I say that whatever the measures are, which are produced in National Statistics, there will be clear knowledge available of the nature of any rate-ups. We publish information on all surveys which are produced in ONS, so we know not only the extent to which surveys are rated-up, but we also produce sample estimates of the reliability of what has been rated-up as representative of the population. Where we do have adjustments which you referred to—you defined some of those as fiddle factors—what is important to recognise is that in those areas, where they have a basis in some past survey or series of surveys, then that would be quite clear. So the basis of any adjustment factor should be known. In essence, you are talking about a judgment and how to apply it to what may be a measurement, which has not entirely come about from the same process of the survey itself, but we should still be able to vouch for its reliability.

  293. That will be made available? Where that process has been part of the derivation of the series, that will remain plain?
  (Mr Cook) Yes. If the adjustment factors do not have the same reliability as National Statistics, then if there is a significant result the measurement itself would be unlikely to be a National Statistic. One has to recognise that when you are compiling some statistics, such as balance of payments, where what we are attempting to do is to provide a comprehensive measure of the ownership of the United Kingdom economy or the other direction, then there are some things we measure well and some things less well. But those adjustments are always made transparent.

Mr Fallon

  294. Perhaps you would like to comment on this because it was your document in February this year, The Goal of Full Employment, that stated: "Moreover, for every vacancy in job centres there are around two others in the wider economy." In view of what you have heard from Mr Cook, do you think that is still robust?
  (Miss Johnson) I think it is robust because the comment is that there are "around two". I believe that is entirely consistent, in fact, with what Mr Cook has been saying to you on this count. Obviously we have the evidence that we have a million new jobs created in the economy, and we do have record levels of vacancies at job centres as well. So there is plenty of other evidence to indicate that the sort of points that we are making in that document are entirely the right ones in relation to this "two".

  295. Your instinct is that the multiplier is still three?
  (Miss Johnson) We put "around two" because, as you are quoting there, we try to be cautious and never put something out that we are not able to be pretty confident that we can substantiate. The indicator was about a third. I believe the discussion before was on the basis of a factor of three in the measures. Because of some degree of uncertainty about it, we have made sure that we have not used the "three" figure in there but "around two".


  296. Thank you very much. We may want to pursue our own inquiries in this issue of the Prime Ministerial access, which you told us about earlier. I am informed that the Chief Scientist, for instance, does have the formal words attached to his job, which says "direct access". It is not just perhaps questions of access. It may be some indication of the weight attached to Whitehall of these functions, so we may want to pursue that in our own inquiry.
  (Miss Johnson) It is entirely proper for you to pursue things. Could I make one comment in relation to what I was saying earlier on about the Framework Document. Somebody—I am afraid I cannot remember, Mr Fallon or Mr Beard—was asking me about the Framework Document and the reviews of the Framework Document. I think it is important to say that whilst we are not about to undertake anything now in relation to it, and we have got this big work programme, as it does say in the Framework, there is a review anticipated in five years' time. That would be five years from the document itself. I would just like to draw that to your attention.

  Chairman: Thank you very much, Minister.

2   Note by witness: "The vacancy figures currently published by ONS are compiled from the administrative records of all vacancies notified to the Employment Service (ES). On a number of occasions during the 1980s and 1990s special surveys were undertaken by ES to try to estimate what proportion of total vacancies across the economy these ES notified vacancies represented. The figure of one third is the best approximation that can be made from this work-but it is insufficiently robust for ONS to incorporate into an adjustment procedure for its published vacancy data. The way forward on this-which ONS is currently adopting-is to develop a new survey approach designed to estimate numbers of vacancies in total directly." Back

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