Select Committee on Treasury Tenth Report

Conclusions and recommendations

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1.  The Treasury Committee has previously called for the introduction of a Statistics Act and a clearer delineation of the responsibilities of ministers, the National Statistician, the Statistics Commission and others in relation to National Statistics in order to guard against political interference in the production and dissemination of official statistics. We therefore welcome the Government's recognition that greater independence in the statistical system is required, and commend it on publishing its recent consultation paper as a means of continuing the reform process which it started in 1998. (Paragraph 16)

2.  We also welcome the Minister's acknowledgement of the importance of addressing the existing low levels of public confidence in statistics. Regardless of the detail of the Government's final proposals, we consider it essential that the Government ensures that its proposals secure both sufficient independence and sufficient perceived independence in the statistical system. It is crucial that the Government carefully considers the way in which it communicates the independence of statistics to the public, with the aim of ensuring that public trust in official statistics is significantly improved. (Paragraph 17)

The Framework for National Statistics

3.  We accept the Minister's point that it can be difficult to define and quantify data produced outside of the Government Statistical Service and we recognise that some data is produced for internal use only. For this reason, we accept that it may not be feasible to apply a code of practice to all official data. We believe, however, that it would be helpful if a clearer distinction could be made between data which is produced for the public domain and data which is used for internal purposes within departments. (Paragraph 27)

4.  We note the evidence we have received from witnesses who described the National Statistics system as confusing to both professional users and the wider public. We agree that the current model is confusing. We are concerned that the creation of National Statistics has resulted in the emergence of a two-tier system, which has tended to undermine public confidence in official statistics. We recommend that the Government seek to address the problem by setting down clear criteria for what categories of statistics should be classified as a 'National Statistic'. (Paragraph 28)

5.  We note that the Home Office has been able to provide figures for the proportion of all its official statistics which are designated as National Statistics. We recommend that the Government publish the equivalent figures in respect of all government departments, in order to inform parliamentary scrutiny of the expected legislation. (Paragraph 29)

6.  We acknowledge the benefits of the current decentralised statistical system, as set out by the Government and endorsed by the Office for National Statistics and others in the statistics community. Given the apparently high levels of support for the current system, we do not suggest bringing all of the Government's statistical operations together into a single office. (Paragraph 33)

7.  However, we note the Minister's acknowledgement that the decentralised system affords government departments, and potentially ministers, more influence over statisticians than would a centralised system. We agree with the Royal Statistical Society that a decentralised system risks perceptions of political interference and that "compensating mechanisms" are therefore required. We recommend to the Government that, although statisticians should remain close to policy colleagues in departments, they should have formal responsibility to the National Statistician for any statistics they produce which are intended for the public domain. We also recommend that the Government examine the adequacy of the 'Chinese wall' arrangements which are currently in place in departments—between departmental statisticians and the rest of the department, including ministers—and that it puts in place improved arrangements, if necessary. (Paragraph 34)

8.  We note the concerns of several witnesses that the Government's consultation paper fails to address the independence of statistics outside the ONS. We are not convinced by the Minister's assertion that National Statistics "represent the most important sources of data" for explaining "what is going on in the economy and in society", because they do not include some of the most frequently-quoted data on health, crime and education. (Paragraph 43)

9.  We agree with the Chief Statistician of Canada that the public is unlikely to distinguish between statistics originating from the ONS and statistics coming from other government departments. We are therefore concerned that, by addressing only the independence of the ONS in its consultation paper, the Government may have missed an opportunity to improve public confidence in official statistics. We recommend that the Government examine including protocols in its forthcoming legislation that would be applicable to all official statistics. (Paragraph 43)

10.   We acknowledge the Minister's argument that ministers are ultimately responsible for the outputs of their departments and that they may therefore have some incentive to see their departmental statistics awarded the National Statistics kite-mark of quality. We are nevertheless concerned that retention of this control by ministers would undermine the perceived independence of the system. The promise of a more thorough audit would not appear to offer a strong incentive for ministers to designate statistics within their departments as National Statistics. If the Government proposes to retain the basis of the current National Statistics system, we recommend that decisions about designation should rest with the independent board, not with ministers, in order to ensure that decisions about what constitutes a National Statistic are made objectively and consistently by a body external to the government departments concerned. (Paragraph 44)

11.  We note the Statistics Commission's concerns regarding the clarity and enforceability of the existing Code of Practice. We therefore welcome the Government's proposal to establish a statutory code of practice, and its assurance that drafting the code would be a matter for the independent board without involvement from ministers. The introduction of a new statutory code of practice would offer the opportunity to establish a code which is unambiguous, able to be understood by a wide range of readers and sufficiently precise as to be readily enforceable. We are pleased to hear that the Statistics Commission intends to put forward proposals for a new statutory code of practice in the next few months. (Paragraph 50)

12.  We have considered the Minister's justification of the current anomalous treatment of the Retail Prices Index, whereby the Framework for National Statistics gives the National Statistician responsibility for "developing and maintaining statistical standards, definitions and classifications" of all statistics other than the RPI. We question whether the degree of Government exposure from changes to the RPI is such that the Chancellor of the Exchequer needs to retain control of its scope and definition, particularly given that equivalent indices in comparable countries are not treated as 'special cases'. We invite the Government to explain more fully why its considers that the RPI should be treated differently from other key macroeconomic statistics. (Paragraph 56)

Governance of the independent statistics office

13.  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. (Paragraph 63)

14.  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. (Paragraph 64)

15.  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. (Paragraph 68)

16.  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. (Paragraph 70)

17.  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. (Paragraph 75)

18.  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. (Paragraph 76)

19.  We recommend that the title 'National Statistician' be retained. (Paragraph 79)

Establishing a non-ministerial department

20.  We have considered the arguments for transferring the new non-ministerial department from HM Treasury to the Cabinet Office. On balance, we conclude that the residual responsibilities of Government in relation to the new independent statistics office should remain with HM Treasury, although we do not agree that the Government can credibly argue that locating the new department outside the Treasury would detrimentally affect the Treasury's ability to coordinate, and measure departments' progress against, public service agreements and efficiency targets. The residual responsibilities of ministers in respect of the new non-ministerial department are likely to be limited, and we therefore do not believe that the precise location of the new department is particularly important. However, if HM Treasury is to retain residual responsibility for the new department, we recommend that the Government consider carefully how it will demonstrate that its proposals will result in a genuinely independent statistics office. What is important is that the new department should be perceived to be more independent than the present arrangement. (Paragraph 89)

Funding arrangements for the non-ministerial department

21.  It is important that the Government consider the detail of the process whereby the new statistics office's budget will be set, and the extent to which Parliament might be involved with this process. We look forward to the Government producing detailed proposals, and recommend that it outlines these proposals in its response to this report. (Paragraph 94)

22.  We welcome the Government's proposal to set the funding of the independent statistics office outside the Spending Review process. However, there is very little detail in the consultation paper about how these funding arrangements will work in practice, and, in oral evidence, the Government was unable to provide us with any further detail or clarification. (Paragraph 99)

23.  We share the concerns of the Statistics Commission and the Chief Statistician of Canada that the proposals, as they stand, could undermine the new independent statistics office's ability to determine its own work programme. However, we agree with the Government that some constraint must be placed on the funding of the new independent statistics office's work programme, in order to safeguard public spending. On the question of the appropriate frequency of the periodic review of the new office's budget, we recommend that the Government adopt a minimum period of five years between reviews, in order to allow the statistics office to operate with reasonable certainty. (Paragraph 100)

24.  We share the concerns expressed by some of our witnesses, that the Government's proposal to retain the census within the Spending Review process may well limit the new independent statistics office's ability to undertake long-term planning for future censuses. We recommend that the Government re-examine the implications of this proposal, bearing in mind the importance of enabling proper long-term planning of the census to take place. (Paragraph 105)

25.  According to the Minister, the new non-ministerial department will have no new efficiency or relocation targets. However, it is not clear from the consultation paper whether or not the Government will require the proposed new independent statistical office to assume responsibility for the ONS's existing efficiency targets for 2007-08 and existing relocation targets for 2010. If the non-ministerial department is to be expected to meet the ONS's existing targets, it is not yet clear how the Government expects to hold the new non-ministerial department to account for these targets. We recommend that the Government clarify these points in its response to our report. (Paragraph 108)

Parliament's scrutiny role

26.  We agree with the Government that the production of statistics is an executive function, and we are content that Parliament's role should be limited to that of scrutiny in respect of the new independent statistics office. (Paragraph 109)

27.  We expect that the House will consider what form select committee scrutiny of the new independent statistics office should take at an early stage of the legislative process. Provided that Treasury ministers continue to have residual responsibility for the new independent statistics office, we would expect that this Committee would continue to take the lead role, on behalf of the House of Commons, in calling members of the board and the National Statistician before it to answer questions relating to the performance of the office, its funding and appointments to the board. (Paragraph 115)

28.  The Government proposes that the new independent board's annual report "would be laid before Parliament directly by the board, rather than via a Minister". It is not clear what the Government has in mind with this proposal. In practice, all papers laid before the House of Commons must be laid by a Member or, in a few agreed cases, by the Clerk of the House. We can therefore only assume the Government is suggesting that it would be for the Clerk of the House to lay the board's annual report before the House. It is, of course, for the Clerk himself to decide whether it would be appropriate for him to agree to lay the board's annual report. However, it seems to us that it would be more in line with current practice if the new board's annual report was laid by ministers from the department which assumes the residual responsibilities of Government in relation to the new independent statistics office. This appears to be current practice in respect of other non-ministerial departments and does not appear to compromise their independence. Consequently, we consider that the new board's annual report should be laid by a Treasury minister. (Paragraph 119)

29.  We agree with the evidence submitted by the Clerk of the House on the proposed arrangements for dealing with Parliamentary Questions which fall within the responsibility of the new independent statistics office. There is no precedent for Committee chairmen to be conduits for answers from outside bodies as the Government proposes, and we are concerned that any such move would conflict with their interest in scrutinising such bodies. Members might experience difficulty in directing questions if answers were to be presented by the "Chairs of the committees responsible for statistical matters": in the House of Commons it is not entirely clear which committee best matches that description, while in the House of Lords there is no Committee with responsibility for statistical matters. We therefore recommend that the existing arrangements remain in place, with Parliamentary Questions being directed to the National Statistician via the relevant minister, who will assess the extent to which he or she is responsible for answering before referring the remainder to the National Statistician and, subsequently, presenting the answer to the House of Commons and the House of Lords and arranging for it to be printed in Hansard. (Paragraph 123)

Pre-release of statistics

30.  We understand the Minister's concern that ministers should have pre-release access to official statistics, in order to allow them to give a substantive and considered response to statistics upon release. However, we have heard nothing to convince us that it is necessary for ministers to have access to statistics 40 hours prior to their release. We consider that ministers would still be in a position to respond meaningfully to statistics given a considerably shorter period of pre-release. We note that our conclusions match those of the 2004 Phillis Review in this respect, and that the time provided for pre-release access is much shorter in countries such as Australia, France and the United States than it is in the UK. We therefore recommend that the Government ensure that the statutory successor to the Protocol on Release Practices is drafted so that ministers receive pre-release access to all data other than market-sensitive data no more than three hours prior to release. In the case of market-sensitive data, we recommend that ministers receive pre-release access on the day prior to release, after the markets have closed. (Paragraph 142)

31.  In addition to ministerial access, it seems to us that it may also be in the interests of a properly functioning democracy to give the relevant opposition spokespeople a degree of pre-release access. We recommend that the Government ensure that the statutory successor to the Protocol on Release Practices is drafted so that opposition spokespeople receive pre-release access on a similar basis to ministers, but no more than one hour prior to release, rather than three hours. This would place opposition spokespeople on a similar footing to ministers at the time of release, and should enable a broader political debate to take place on any given dataset. We recommend that the Government consider incorporating this point in the statutory successor to the Protocol on Release Practices. (Paragraph 143)

32.  In addition to changes to ministers' pre-release access, we consider further reform is needed in respect of civil servants' pre-release access to statistics. We consider that the statutory successor to the Protocol on Release Practices should cover the use of data prior to official release by all government personnel. Such a protocol should serve to discourage abuse of pre-release and, in particular, to ensure that non-statisticians do not comment on administrative data prior to release. (Paragraph 144)

33.  Finally, in the interests of improving public confidence in official statistics, we recommend that the independent statistics office release alongside National Statistics its own considered and non-partisan interpretation. Any implications for Government policy could then be subsequently explained by the relevant minister or government department. In order to discourage misrepresentation of National Statistics by ministers and government departments and, more widely, the media and other groups, we recommend that the National Statistician should continue to have the authority to monitor and police those who misuse and misrepresent statistics. (Paragraph 145)

Devolution and UK-wide statistics

34.  The benefits of having coherent UK-wide statistics are self-evident. Based on the evidence we have received, there are clearly problems with gathering comparable UK-wide statistics. Such problems undermine any meaningful assessment of the success of devolution because they make it difficult to measure the impact of differing government policies implemented across the administrations—in the fields of health and education, for instance. (Paragraphs 166 and 167)

35.  We are concerned by the apparent fragmentation of some statistics across the UK. We recommend that the Government use the opportunity offered by its present consultation process to examine what it can do, both unilaterally and in co-operation with the devolved administrations, to improve co-ordination of the collection and production of statistics across the UK's different administrations. One step which the Government could clearly initiate is a review of the 2001 Concordat on Statistics, which sets out arrangements for the UK statistical work agreed between the devolved administrations. We therefore welcome the Minister's commitment, on behalf of the Government, to review the Concordat on Statistics, particularly in light of his suggestion that, while this fragmentation has been an issue for some time because of differing local circumstances and requirements, devolution has led to an inevitable intensification of the problem. We recommend that the Government negotiate a revised Concordat with the devolved administrations, that the National Statistician, in consultation with the chief statisticians for Scotland, Wales, and Northern Ireland, be given responsibility for drafting a revised Concordat and that the new independent board be given responsibility for monitoring the implementation of the revised Concordat. (Paragraph 168)

36.  Finally, it is important that the UK-wide scrutiny and audit function currently undertaken by the Statistics Commission is adequately replicated under the Government's proposals. We recommend that the new independent board be given responsibility for oversight of the statistical system throughout the United Kingdom. (Paragraph 169)

Access to statistics

37.  There appears to be strong feeling in the statistical community about the need to provide government statisticians with access to administrative data. We accept that such access could bring about the economic and social benefits set out by the ONS and others. However, as the Government has pointed out, these benefits must be balanced against important privacy rights. We recommend that the Government use the opportunity offered by the forthcoming statistics legislation to allow government statisticians greater access to administrative data. The Government should ensure that appropriate safeguards are put in place to ensure that the integrity and security of personal information is not compromised, and that access extends no further than statisticians working in specified parts of government. (Paragraph 176)

38.  We are concerned to hear that the previous National Statistician considers that the capacity to protect properly gathered information in the UK is declining. We recommend that the Government take this opportunity to consider whether the protection of people and organisations from the unauthorised disclosure of information held about them for National Statistics or other statistical purposes requires a statutory basis. We further recommend that the Government consider whether it is appropriate that statutory responsibility for protecting confidentiality should rest with the independent board, given the possible implications for the authority and independence of the National Statistician. (Paragraph 179)

39.  We note the concerns of the Statistics User Forum regarding access to government statistics, including access to data on the ONS website. We invite the Government's comments on these concerns. The current review of the independence of statistics offers a good opportunity for the Government to consider making datasets held by government agencies and departments more freely available to third parties. (Paragraph 183)

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Prepared 26 July 2006