Letter from Mr Len Cook, National Statistician
and Registrar General, Office for National Statistics to Sir John
Kingman, Chairman, Statistics Commission
& THE NATIONAL
Following your letter of 26 July 2002, there
have been a number of exchanges between ONS and the Statistics
Commission, and the joint statement by the National Audit Office
and the Office for National Statistics has been released.
Following our discussion on Friday 8 November,
I would like to make the following points.
In your letter it seemed that you were expecting
my office to have a role in the presentation of public policy
on Network Rail. The line between presentation of public policy
and its advocacy is a difficult and subjective one, and my office
must avoid getting involved in public policy.
ONS experts have classified Network Rail to
the private sector in the national accounts, as a non-financial
corporation. In making this judgement, they have applied national
accounting standards, which take account of economic reality as
well as legal form. This classification follows from the way in
which Network Rail is set up. The classification is not in itself
a justification of the form of Network Rail. Such justification
is the responsibility of those presenting the policy in the public
It is the policy decision of successive governments
to use National Accounting definitions in defining fiscal policy
targets and rules. A consequence of this is that the private sector
classification of Network Rail for national accounts, and the
associated treatment of the financial support from government
as contingent liabilities, directly affects measures such as the
public net borrowing requirement. This means that the robustness
of the national accounts treatment is a matter of public interest.
You ask about the scale of government guarantees,
and the likelihood of their being called in. The Statistics Commission
will wish to monitor the Supplementary Statements to the Consolidated
Fund and National Loans Fund Accounts, published by the authority
of the House of Commons in December each year. Contingent liabilities
of government are brought together in this. The presentation of
the accounts in this report is not, of course, my responsibility.
I believe you have pursued the recording of the government support
for the financing of Network Rail as contingent liabilities with
the Head of Profession in the Department of Transport.
I had initially thought that our statement of
11 July 2002 "Setting the record straight on Network Rail"
would meet the needs of the "ordinary traveller and taxpayer"
that you refer to in your letter. In the light of your helpful
suggestion, I am pursuing further ways in which we can describe
our process in a more helpful and accessible manner.
18 November 2002