Select Committee on Treasury Eleventh Report

3  Why accurate population statistics matter

Uses of population statistics

49. The Statistics Commission told the Sub-Committee that population estimates were the bedrock of every national system of official statistics. The estimates measured the fundamental characteristics of society and underpinned key statistics such as macro-economic indicators, unemployment rates or crime rates. They were used as the core component in statistical formulae that allocate very large sums of public money to the devolved administrations, to local government, the health service and public services. They were also used as the basis for projections such as forecasts of household numbers and life expectancy, which, in turn, influenced assumptions about housing demand, social care and pensions. [60]

50. Professor David Martin noted that population estimates had at least three critical uses: resource allocation and the determination of financial settlements, of particular concern to central and local government; as the basis for establishing rates of deaths, accidents, health, crime and conceptions; and the planning of local services, or in the commercial context, business decisions on the basis of estimated population need and demand. [61]

IMPLICATIONS FOR ECONOMIC USES

51. Mr Charlie Bean, Chief Economist, Bank of England, told the Sub-Committee that the Bank's primary need for the population data was essentially to "get a handle on the size of the available labour force, which is a key determinant of the supply potential of the economy".[62] In order to estimate the inflationary pressure within the economy one of the key determinants was the balance between demand and supply in the labour market. Mr Bean explained that population data helped to determine the sustainable rate of growth of the UK economy and "therefore how fast we can let demand in the economy expand". [63] Mr Christopher Kelly, Head of the Macroeconomic Prospects Team, HM Treasury, also told the Sub-Committee that accurate estimates of the population were "extremely important".[64] HM Treasury used population statistics to develop macroeconomic forecasting. [65]

LOCAL AUTHORITIES

52. Good population statistics are fundamental for local policy development and for the planning and allocation of funds for public services. Local Authorities, such as Westminster, Slough and Manchester, have experienced difficulties where inaccurate statistical data resulted in reduced allocation of financial resources. The confusion between local and national migration estimates has made planning and service provision more difficult for some Local Authorities.[66]

53. It is accepted that population estimates are central to every national system of official statistics. They are used in statistical formulae that allocate vast sums of public money to the devolved administrations, to local government, the health service and public services. It is therefore a matter of social responsibility to ensure that population statistics are calculated accurately.

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60   Ev 33 Back

61   Ev 24 Back

62   Q 77 Back

63   Ibid. Back

64   Q 78 Back

65   Ibid. Back

66   Ev 44, 53, 59, 64, 69-108, 124-132, 142, 150--157, 166-183, 198 Back

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Prepared 22 May 2008