Examination of Witnesses (Questions 40-59)|
9 NOVEMBER 2005
Q40 Susan Kramer: May I just come in
with one question on this section. Last July, the Treasury found
that it had mistook itself on the timing of the current economic
cycle and adjusted the date identified as the beginning of the
cycle, which by serendipity gave a bit more space under the Golden
Rule. To what extent was your department involved in the assessment
of the timing of the economic cycle?
Ms Dunnell: We just produce the
statistics that the Chancellor uses to make these kinds of decisions.
Do you want to say anything more about that, Colin?
Mr Mowl: The short answer is not
at all. We provide the regular flow of statistics about the economy
including GDP, which the Treasury uses in its assessment. We also
provided some new, experimental estimates in the summer, of market
sector output or business sector output which both the Bank and
the Treasury have drawn upon, but we were not directly involved
at all. So we had no role in the assessment of the cycle.
Q41 Susan Kramer: You said earlier that
you thought it was important, perhaps, for your office, in order
to establish the independence of statistics, to go further along
the path of interpretation rather than simply providing such data
to departments who would then make that interpretation themselves.
Is this an example of an area where the decision or, as it were,
the determination of the economic cycle should be in the hands
of your operation rather than in the hands of Treasury? Is that
the kind of distinction you are talking about?
Ms Dunnell: I think we would like
to have more resources to set out different pictures of how we
view the economy and society, and whether that included understandings
of economic cycles, maybe. I do not know whether you have got
a strong view about that one, Colin?
Mr Mowl: I certainly have views,
but I think it is largely a question of priorities. It may be
helpful for you to know that we are assisting the National Audit
Office in its assessment of the Treasury analysis and we have
had meetings with them and we write papers for them; papers that
explain how we put together the GDP figures which the Treasury
use, why revisions occur and why the particular revisions the
Treasury refer to in their paper occurred. We are assisting the
National Audit Office, but it is the case that very few national
statistics offices throughout the world undertake this sort of
analysis. There is no reason inherently why we should not, but
it is a question of priorities. At the moment we have got a major
programme in terms of modernising the statistics that we produce,
including the national accounts, so it is not our priority at
the moment and I think there are probably sufficient experts in
the UK to scrutinise the Treasury analysis in the form of organisations
like the National Institute, the IFS, and so on. As I have mentioned,
the National Audit Office is now also doing this assessment, so
we have not deemed it to be a priority at the moment.
Q42 Chairman: It brings us back to this
ambiguity that you are both a regulator, a policewoman, of statistics
and a provider of statistics. The NAO can decide what it wants
to audit, but you are told by the Treasury which are the assumptions
that they want you to audit. Would you not prefer to be in the
position that you could decide which of these assumptions to audit?
Ms Dunnell: I do not think that
they tell us which assumptions to audit. We have
Q43 Chairman: They refer certain assumptions
to you to audit, from the PBR and the Budget.
Mr Mowl: No, they refer them to
the NAO; they do not refer any to us.
Q44 Chairman: They do not refer any to
Mr Mowl: No, not at all. Our only
involvement in this particular issue is that the National Audit
Office contacted us to ask for our assistance and we are providing
it. At no stage did we get asked by the Treasury to audit any
of their assumptions, other than in this particular case. The
NAO chooses for them to carry out their responsibility to audit
the assumptions, they need to consult us. So, for example, there
was another case where there were questions about the extent of
spirits fraud in the country so we assisted the NAO in that context,
but we are never asked directly by the Treasury to audit any Budget
or pre-Budget Report assumptions.
Chairman: Let us turn to the modernisation
programme that you referred to. Mark Todd?
Q45 Mr Todd: You appear to have run into
some difficulties with the modernisation of the information systems
that would support this programme. Could you expand a little on
the fairly modest reference to it in your departmental report?
Ms Dunnell: Yes. This programme,
for which we received funds in the spending review of 2002, was
a very ambitious programme and something not ever attempted on
quite such a scale by any other national statistics office and
we realised very early on, at the end of the planning year, and
we acknowledged it in the Annual Report that our targets would
be delayed, so that is the situation we are in. However, as you
know, the main investment was for last financial year and the
current financial year so, after just one and a half years of
the key investment years, we have achieved quite a lot. I accept
that it is not as far along as was originally envisaged, but we
spent a lot of last year proving to ourselves that the whole concept
of a single database, all connected with the different bits of
software that we use for collection, for sampling, for processing
and for outputs and so on, all works. We are now developing the
prototype and by March 2006 we will be ready to start implementing
them on our two key systems, which are the national accounts and
our labour force survey. We have also, of course, as part of that,
identified all the tools and software that we need to do this.
We have also commissioned, got set up and are currently beginning
to fill up our new modern data centre in Cardiff Bay and we have
already transformed our telecommunications infrastructure and
our Web hosting, which is very important. We have also gone some
way on the corporate services front, getting the first stages
of our human resources and finance systems in place. Unfortunately,
quite a lot of this is very internal and it is quite difficult
to explain, but we are only 18 months into the two years of the
initial investment and we have gone a long way with it. It is
not very visible to the public at the moment, unfortunately.
Q46 Mr Todd: I am not so worried about
that. What I took from what you said was that you had set aside
a budget for this particular programme, you had got a substantial
way into it and found that it was not as readily achievable as
you had thought. You have now spent most of that budget and you
are wondering how to fund the rest of the programme. That is how
I vaguely took it, but
Ms Dunnell: I can explain that
more clearly. On statistical modernisation and technological modernisation,
which go hand in hand, so that our data centre and telecommunications
are all part of it, we originally received £72 million, which
was all to be spent, basically, by March, ie in two years. To
date, this year we will have spent only £56 million of the
£72 million, because when we realised we could not achieve
it in two years and we had somehow to achieve our relocation and
our efficiency targets that were unplanned at the time, we decided
to slow it down and incrementalise it, so we have a plan now for
the next two years which will end up, we estimate at the moment,
costing £88 million instead of £72 million. That is
the situation within the plan.
Q47 Mr Todd: Have you been allocated
the resources to complete, or are you bidding for it?
Ms Dunnell: In the 2004 spending
review we acknowledged that we needed to carry on investing in
our modernisation programme through that period and we have allocated
the money in our budget to cover that, yes. In our 2004 spending
review we highlighted all the things we needed to do, including
finishing the modernisation programme; the spending review just
gave us the extra money to cover all the things we were asked
to do and did not specify how much we were to spend on each one.
Q48 Mr Todd: The incremental approach
that you are now taking is driven within a strategic view of what
you require now because you have remodelled what you are designing,
presumably, based on your experience to date.
Ms Dunnell: Very much. The original
vision was to have everything we do in one database, everything
we do using just the 10 basic sets of statistical software. Because
everything changes around us, the sequencing of it just has not
made a lot of sense; it has not made a lot of sense to invest
in putting surveys into this system when we are going to modernise
those surveys anyway and turn them into something else.
Q49 Mr Todd: You have moved it on to
the next thing I was going to ask, now, which is you have got
a lot of legacy stuff which is still going to have to keep running
while you are carrying out your changed programme. I would imagine,
and I think you have said it yourself somewhere, that these legacy
systems are fragile to some extent and carry risks. How are you
going to make sure that the continuation of these older systems
work effectively in parallel, with the modernisation of the information
systems that you will rely on to produce the new sets of data?
Ms Dunnell: Basically, the re-working
of the programme was done on the basis of which parts of the programme
we should do in what order to maximise the benefits. Since the
major part of the benefit is to reduce risk, and lots of the risk
comes from the fragility of the systems, we are doing the most
risky first, so that helps to reduce it. Also, we are having to
use our resources very carefully and we are having to do some
upgrading of some of our legacy systems while we are also doing
Q50 Mr Todd: That is costed into your
Ms Dunnell: Yes, that will be
ongoing until we have managed to
Q51 Mr Todd: Because that is effectively
some cost, you are putting money into systems you are going to
throw away very shortly.
Ms Dunnell: Yes, but it is
Q52 Mr Todd: I am not arguing that you
have got to do it, but
Ms Dunnell: It is fairly minimal
because, obviously, we are under lots of pressure from resources.
Hilary, do you want to come in on this?
Ms Douglas: We are doing it only
where it is essential in order to keep the system going and you
are driving towards, I think, this is a considerable challenge
in managing the resources around all of this and yes, that is
true, it is. The fact that it has taken longer than was originally
expected to deliver on modernisation does mean that we are having
to drive out our efficiencies earlier within the business to support
the completion of the programme.
Q53 Mr Todd: Which wise consultants did
you use to advise you on the original approach to this? Or maybe
you did it all yourselves?
Ms Dunnell: The modernisation
programme? We have used a range of consultants. We used a New
Zealand expert on statistical organisations, but we have used
a range of more technical consultants to help us build what we
call the "architecture", the whole idea of it.
Q54 Mr Todd: Clearly they, you think,
got it wrong to some extent because you found once you started
to get into the harder tasks, it did not quite deliver what you
Ms Dunnell: I do not think that
anything has been proved wrong with the general idea and vision
of the modernisation programme. The huge extent of it, and we
had to develop that idea into a very carefully planned programme
that has to be looked at, regularly, by the OGC and so on. The
vision is rather different from constructing a very detailed,
well planned programme.
Ms Douglas: I think perhaps, if
I may just add to that, the programme was started off at a time
when the immediate delivery of efficiency savings was not such
a strong pressure, and I think it seemed a reasonable thing to
do at the time to attempt the "big bang" approach, if
you like, but the big bang with 400 to 500 live application systems
that were inherited from the previous organisations
Q55 Mr Todd: That is why I asked you
who advised you to do this, because nowadays not many people recommend
big bangs in information systems, do they? Normally, for very
Ms Douglas: It was thought at
the time, working with the various different companies that ONS
consulted, that this could be done, and considerable progress
was made with getting the right infrastructure in place, but as
the financial pressures came in and it became more and more important
to bring the early benefits in, we said, "Let's stop. Let's
look at this again. Let's re-scope it. Let's learn from the experience
and let's chunk it so that we are delivering the benefits programme
Q56 Mr Todd: Big bangs in information
systems carry much the same risks as big bangs in most other things
in life. They are very hard to achieve and carry massive risks
and require extraordinarily high quality management, which not
that many people have. May I ask you a bit, if I may, Chairman,
about publications and output? You have suggested that maybe you
can thin down your publication portfolio because some of the production
of it is not absolutely necessary. Have you had any reactions
to that idea?
Ms Dunnell: Our publication portfolio
is constantly under review and the main thing we are doing at
the moment of course is to try to move as much as we possibly
can on to the Web, which is much better from many people's points
of view because it is freely available, it is instantly accessible,
and so on. What we are trying to do is to rationalise the things
that we publish, so, for example, we have a plan to join together
our labour market regular publications with our economic trends
publications, so that we are just having one quarterly journal
looking at the whole of Colin's side of the business, for example,
and some of our other publications we are cutting down considerably
because we were repeating things. Social trends, for example,
cover an awful lot of things which we feel we do not need to cover
again, separately, when we have published an individual survey.
Q57 Mr Todd: Reaction from your consumers?
Ms Dunnell: Initially, when you
withdraw anythingthis is one of our problems with statisticswhen
you suggest taking anything away we always get Outraged from Woking
on our backs, as it were, but with very careful explanation of
where the information will be available and where else they might
find reporting on that particular subject, we usually manage it,
but it does require a lot of communication.
Q58 Mr Todd: So how many Outraged of
Wokings have you had? Are they persisting in being outraged in
Ms Dunnell: Outraged of Woking
has not been too bad lately, but certainly in the past when we
have withdrawn things, like the General Household Survey report
as a book, we have had a lot of negative feedback, but on the
other hand we have then introduced more focused publications,
like our one on ethnicity and our one on gender, and they find
that there is much more in there because there are things from
lots of other surveys.
Q59 Chairman: May I just ask a question
on the registrar role that you have. Do you yet have final figures
for the actual proportion of registration certificates that were
delivered on time in 2004-05? You had a target for this.
Ms Dunnell: I do not know whether
we have that as up to date as that, but I will pass over to Dennis
now, if I may.
Mr Roberts: I am not sure that
I have got the actual numbers in front of me; I thought we had
put it in the report. But the difficulty we have had