Select Committee on Treasury Tenth Report


3  Governance of the independent statistics office

Independent board

STRUCTURE AND RESPONSIBILITIES

57. The Government's consultation paper proposes establishing an independent governing board that would be responsible for "meeting an overall objective for statistical quality and integrity".[77] The Government anticipates that the board would have a "strong non-executive presence" including "leading experts in statistics, and men and women from academia, business and public service".[78] The board would be led by a non-executive Chair who would not need to be a professional statistician. The National Statistician would also be a member of the board.[79] Box 3 sets out the Government's vision for the independent board.Box 3: The independent board
The Government envisages the board having certain statutory objectives:
  • to ensure the statistics office produces and disseminates relevant, accurate and timely statistics about the UK economy and society;

  • to ensure the quality and integrity of the National Statistics system, by developing and maintaining the code of practice, and assessing National Statistics against this code;

  • to advise Ministers of areas of widespread concern about the quality of official statistics;

  • to maintain an overview of the broad coverage of the statistical system, which should meet key user needs;

  • to operate efficiently, providing value for money whilst minimising the regulatory burden on business and other respondents; and

  • to protect the confidentiality of data provided.

Source: HM Treasury, Independence for statistics: A consultation document, March 2006, para 4.17

58. With respect to the first of the objectives detailed in Box 3, the Government proposes that the board would have "executive responsibility" for the statistics office, which it describes as meaning that the board would ensure that "statistics produced by the office are accurate, that they are timely, and that the office's work programme delivers statistics that are relevant".[80] A number of witnesses expressed concern about this concept of "executive responsibility". The RSS believed that the Government's proposals with respect to the board needed "significant modification" to ensure that there was a "clear separation between operational delivery of National Statistics (the responsibility of the National Statistician) and the oversight role of the board".[81] The role of the board as it is envisioned by the RSS is detailed in Box 4.Box 4: RSS suggested model for the independent board[82]

The Board should be non-executive in terms of the production of statistics and should ensure that the statistical system serves the wider public interest. It should:

  • Consider the statistical plans and draw to the attention of Parliament and ministers any imbalance or inadequacies;

  • Keep under review strategic developments for the statistical system;

  • Monitor, through whatever methods it deems necessary including independent audits, the professional integrity of the whole statistical system and adherence of statistical producers with the code of practice;

  • Assure itself that the statistical system takes account of the needs of all users;

  • Monitor the performance of the National Statistician in the discharge of his/her functions;

  • Advise the National Statistician, Parliament and ministers as appropriate; and

  • Report to Parliament.

Source: Ev 74

59. The Statistics Commission has previously criticised a model comparable to the one currently proposed by the Government. In 2004, it published Legislation to build trust in statistics, a report which reviewed the need for statistics legislation and recommended the establishment of a statutory Statistics Commission charged with enforcing a statutory code of practice. The Commission considered the merging of itself and the ONS into one body, but rejected the idea, arguing that such a body:

may not deliver sufficient benefits in terms of confidence in the statistics produced by government departments other than the ONS itself … Also, ONS would be required to act as its own watchdog … The difficulties of marrying the regulatory role with organisational management are well-evidenced elsewhere.[83]

60. We invited the Commission to comment on the Government's proposal to adopt the model earlier rejected by the Commission. The Commission told us that it still believed that a model including a separate body with an independent scrutiny role would be "cleaner and more easily believed to be independent than the model that the Treasury has come up with".[84] The Commission nevertheless thought the Government's model could be "made to work, providing the very real tensions that are involved in this are recognised and the structure is set up in the right way".[85] The Commission suggested that Chinese walls could be established within the independent board to allow it to undertake its dual role of "being responsible in some sense for the operation of ONS [while] at the same time being responsible for scrutiny across the whole system", but cautioned:[86]

it would be not straightforward to sell the idea to the public—and perceptions are very important to all of this. We think it could be made to work, but it would not be easy and it would certainly take a long time.[87]

61. Several witnesses stressed that, if the board was to be given executive functions over the delivery of statistics, this would necessitate the retention of a separate scrutiny body. The RSS argued:

The Governing Board as proposed by the Government is an executive body and therefore if that model is pursued there will still be a need for a body like the Statistics Commission to oversee the Governing Board.[88]

The Statistics User Forum suggested that if the Statistics Commission were to be continued, it would need strengthening, as it had "done good work and been alert to the views of users but [had] suffered from limited authority and an unclear role".[89] The Forum told us:

Many users would like to see a body established on similar lines to the National Audit Office (possibly even an extension to the NAO) having the role of scrutiny or audit of the system. This would have the merit of being clearly independent. It would have more authority than the current Statistics Commission in that it had the sanction of an adverse report to Parliament. But its endorsement of good statistical practice would carry equal weight.[90]

OUR CONCLUSIONS

62. We have considered the appropriateness of the Government's proposals to establish an independent governing board with a "strong non-executive presence" and a non-executive Chair, but with "executive responsibility" for the statistics office. Witnesses emphasised the importance of maintaining a clear separation between responsibility for delivery of statistics, on the one hand, and regulatory oversight, on the other. We note particularly the Statistics Commission's argument that separation of these functions is important not just because of the practical difficulties of separating these functions within one board, but also because of the impact of a lack of separation on the perceived independence of the board.

63. We support the Government's proposals that the independent governing board should have a "strong non-executive presence" among its membership. However, we are concerned about the Government's apparent intention to invest the board with executive powers. We would prefer that the Government ensure a clear statutory separation between the role of the National Statistician in the executive (or operational) delivery of statistics, on the one hand, and the board's responsibilities for the oversight and scrutiny of the statistical system as a whole, on the other, and we recommend accordingly.

64. If, after considering our recommendation, the Government decides to proceed with the proposals in their current form, we recommend that it establish a separate scrutiny body in addition to the board. The establishment of such a body is in line with the recommendations of the Statistics Commission's 2004 report, Legislation to build trust in statistics.

Appointments process

65. The Government's consultation paper proposes that all members of the independent governing board, including the Chair and the National Statistician, would be appointed through open and fair competition, in line with guidance published by the Office of the Commissioner for Public Appointments (OCPA). The Chair and National Statistician would be formally appointed by the Crown, on the advice of ministers. Government ministers would appoint the remaining non-executive members of the board after consulting the Chair. The OCPA Code of Practice specifies that ministers should be given a final choice from at least two recommended candidates for each vacancy.[91]

66. The National Statistician confirmed to us that she expected the Chancellor of the Exchequer to be directly involved in appointments to the board. She argued that the independence of the board and the statistical office would not be determined by the specifics of the appointments process, but by the actions of those appointed:

I know from discussions that this is the Chancellor's opportunity … to make a big step towards independence, and I am sure that he will find the people [and] choose the people in the right way, but it is up to all of us, either on the board or in the statistical system, to emphasise all the time the independence of what we do.[92]

67. The Society of Business Economists suggested that "appointments by ministers, rather than with their recommendation or approval, [would be] inconsistent with 'independence'", and stressed that the appointments process needed to be "as independent, and … perceived to be as independent, as possible".[93] On the other hand, Lord Moser told us that he would "totally trust the Chancellor or the Prime Minister in appointing the members of the board".[94]

OUR CONCLUSIONS

68. We have considered the appropriateness of the Government's proposal to appoint all board members in accordance with the Office of the Commissioner for Public Appointments' Code of Practice. The proposal would mean that ministers would be offered a final choice from at least two recommended candidates. We acknowledge the concerns expressed by some witnesses that ministerial involvement in the process of appointing members to the new independent board could give rise to the perception of political interference. On balance, however, we consider that the proposed adherence to OCPA guidelines is sufficient to ensure independence. We agree with the National Statistician that public perceptions about the independence of the board will depend more upon the actions of board members than upon the way in which they are appointed.

Secretariat

69. The ONS told us that two models were being considered for the provision of secretariat services for the new board:

One [model] is for the board to share the same sort of secretariat as the chief executive, and that is practised in some organisations. In other organisations, such as the BBC, they have taken exactly the opposite approach and decided that the governing board should be very distinct from the chief executive.[95]

The ONS told us that it would "work through" these two different models over the next few months to determine "what is most appropriate in these circumstances".[96]

OUR CONCLUSIONS

70. The Government's consultation paper does not make any reference to the secretariat of the independent board. The ONS has suggested two distinct models: one in which the board shares a secretariat with the National Statistician; and another in which the secretariats are separated. We recommend that the secretariats of the independent department should maintain clear separation between executive and regulatory functions.

National Statistician

RESPONSIBILITIES OF THE NATIONAL STATISTICIAN

71. The Government's consultation paper does not set out in any detail the responsibilities envisaged for the National Statistician under the new arrangements, nor does the it specify whether the National Statistician's authority over the executive delivery of statistics would be reinforced in legislation.

72. The Bank of England said that the Government's proposal for the role of the National Statistician under the new arrangements does not "sound akin to the role of the National Statistician that exists under the current framework".[97] The Bank described the proposals as "somewhat unclear":

Who would be the public face of the ONS? If this is (plausibly) to be the chief statistician [currently the National Statistician], how is this consistent with the considerable powers entrusted to the ONS board on matters requiring professional competence?[98]

73. The Chief Statistician of Canada told us that "the weak role" assigned to the National Statistician was an area of the Government's proposals where "major strengthening" was needed.[99] He described this as a "major shortcoming" that the eventual legislation ought to remedy and outlined some of the roles and responsibilities he believed should be assigned to the National Statistician.[100] These are set out in Box 5.Box 5: Roles and responsibilities for the National Statistician as suggested by the Chief Statistician of Canada
  • The major attributes and functions of the National Statistician should include:

  • Absolute control over the statistical methods used throughout the statistical system. This would be exercised through her authority over the ONS; and through the conduct of quality audits of statistics produced in other government departments.

  • Absolute control over the timing and content of statistical releases—whether originating from the ONS or from other government departments.

  • Overall management of the statistical system which in turn includes:

  • day-to-day management responsibility over the centralised portion of the system (the current ONS);
  • effective authority to appoint and manage the careers of all members of the Government Statistical Service and the duty to be directly involved in the career management of the top two levels of the main decentralised components of the statistical system. This would include authority to appoint and reassign these managers to ONS and to other statistical organisations of the government.

  • [Power to] recommend to the Board priority statistical areas for development or improvement, as well as areas the scope of which should be reduced or eliminated outright.

  • [Power to] recommend to the Board statistical programmes to be subject to quality audits.

  • [Authority to] act as the public spokesperson of the statistical system.

  • [Responsibility for enforcing] the statistical code of practice throughout the system. This should include a provision that statistics will be disseminated from all statistical collections at the earliest date, i.e. that there are no confidential statistical programs and no holding back of results.

Source: Ev 81

74. The RSS produced a similar set of suggested key responsibilities, but added that the National Statistician should be "the Government's Chief Adviser on statistics" and "entitled to comment on erroneous interpretation and misuse of statistics both inside and outside government", in accordance with the United Nations Fundamental Principles of Official Statistics.[101]

OUR CONCLUSIONS

75. We are concerned that the consultation paper does not clearly set out the responsibilities of the National Statistician. We agree with the Chief Statistician of Canada that the Government's proposals need "major strengthening" in this area.

76. We believe that the professional authority of the National Statistician over the executive delivery and co-ordination of statistics should be clearly and unequivocally provided for in legislation. The proposed responsibilities of the National Statistician as set out by the Chief Statistician of Canada and the RSS seem to us to be sensible and we recommend that future legislation take adequate account of these proposals. The National Statistician must be given the professional responsibilities and statutory authority necessary to perform the roles of chief executive of the statistical office.

TITLE OF THE NATIONAL STATISTICIAN

77. The Government proposes changing the title of the National Statistician to 'Chief Statistician'.[102] Several witnesses remarked that the title of Chief Statistician is currently given to junior members of the Senior Civil Service (SCS).[103] The Society of Business Economists argued:

It should be possible to find a more appropriate title than the proposed 'Chief Statistician', given the long history of such nomenclature being used for the lowest level of Government Statistical Service senior management.[104]

78. The senior statistician of the Scottish Executive and the senior statistician of the Welsh Assembly, both SCS Grade 5, are titled Chief Statistician. In Northern Ireland the senior statistician is titled 'Chief Executive' at SCS Grade 3.[105] The Director of the ONS is a permanent secretary and is therefore employed at SCS Grade 1.

79. The National Statistician told us that she would "rather stick" with her existing title, given that the title of Chief Statistician was already in use across Government departments and in the devolved administrations. She felt that an identical title would be "quite puzzling to people".[106] The RSS felt that the proposed change was no more than cosmetic, commenting that "there are things which need to change. Let us not fiddle with things that do not".[107] We recommend that the title 'National Statistician' be retained.


77   Independence for statistics: A consultation document, para 4.5 Back

78   Independence for statistics: A consultation document, para 4.30 Back

79   Independence for statistics: A consultation document, paras 4.31-4.32 Back

80   Independence for statistics: A consultation document, para 4.19 Back

81   Ev 73 Back

82   Ev 74 Back

83   Statistics Commission, Legislation to build trust in statistics, May 2004, paras 1.14 & 4.10  Back

84   Q 119 Back

85   Ibid. Back

86   Q 120 Back

87   Qq 121 Back

88   Ev 74 Back

89   Ev 97 Back

90   Ev 97 Back

91   Independence for statistics: A consultation document, para 4.34; Office of the Commissioner for Pubic Appointments, Code of Practice for Ministerial Appointments to Public Bodies, August 2005, pp 37-38 Back

92   Q 202 Back

93   Ev 76; Q 75 Back

94   Q 215 Back

95   Q 194 Back

96   Ibid. Back

97   Consultation response to Independence for statistics from the Bank of England, 12 June 2006, p 2 Back

98   Ibid. Back

99   Q 101 Back

100   Ev 80 Back

101   Royal Statistical Society response to the Government consultation document, para 6 Back

102   Independence for statistics: A consultation document, para 4.32 Back

103   Ev 66 and Q 41. Back

104   Ev 78 Back

105   Government Statistical Service intranet StatNet, list of Heads of Profession, July 2006 Back

106   Q 197 Back

107   Q 43 Back


 
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Prepared 26 July 2006