Select Committee on Treasury Minutes of Evidence

Letter from Mr Len Cook, National Statistician and Registrar General, Office for National Statistics to Sir John Kingman, Chairman, Statistics Commission


  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 domain.

  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

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