Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 260-279)


28 JANUARY 2008

  Q260  Jim Cousins: You do not publish it, that is one thing, but do you have it whether or not you publish it?

  Ms Dunnell: No, we do not because we are constantly changing the methods, especially at the moment, by which we input into the population estimates. This is something which we will take away from this meeting and think about but it is very, very complex methodologically because the data is coming from such a huge variety of sources and each of the sets of data has a different level of reliability so, yes, it will depend very much on which element of change is present in each local authority.

  Q261  Jim Cousins: Sir Michael, that is something you might care to bear in mind for the future. I think that is an important point, that we do not have a margin of error. Can I bring you to this Labour Force Survey adaptation of the migration figures. My attention was drawn, because it happens to be a submission that the Committee has had from my particular part of the country, I represent the City of Newcastle in the North East of England and the North East of England is the smallest region—there is an issue about whether the north of Ireland is a region or a country and I am not getting into that, but the North East is the smallest region—to the fact that the number of contacts relevant to international migration using the Labour Force Survey in the North East, which is a small region, is tiny. It varies between six a year and 24 a year over the last six years for which we have had any information. That is six cases. Wales, which is also a small region, has similarly small numbers, but in the case of Wales the pattern of the answers does not vary. In the case of the North East you have a very small sample, a tiny sample, and the results vary quite a lot from year to year. There is a 70% variation in these six to 24 cases over six years. The effect in the latest three year estimates, based upon these six to 24 cases, is to reduce the population of the North East by roughly 9,000, but because the impact of international migration in the North East is heavily concentrated on the City of Newcastle almost all of that regional variation hits the city of Newcastle. 6,000 of that roughly 9,000 reduction hits the City of Newcastle. Surely that is not a sound or robust method of calculating the real impact of migration. I am not here asking how you do it statistically because I can understand that, what I am saying is the result is to produce a huge margin of error.

  Ms Dunnell: I think you are actually talking about the International Passenger Survey that is based on those small numbers. As I said at the beginning, out of the 90 million movements in and out of the country we have to identify migrants and sample them and that is based on what we have already accepted is not a large enough number, which is why we are now boosting the numbers. What we are now doing with the Labour Force Survey, given that we are reasonably confident about the total number, the net migration in the UK, we are now using the Labour Force Survey to apportion them between local authorities.

  Q262  Jim Cousins: The information I have just given you is precisely in the Labour Force Survey.

  Ms Dunnell: Okay.

  Q263  Jim Cousins: It is precisely after you have made those changes.

  Ms Dunnell: Okay.

  Q264  Jim Cousins: Right?

  Ms Dunnell: Right.

  Q265  Jim Cousins: So you agree that is a serious point?

  Ms Dunnell: I do not know exactly what you are referring to there. What you are saying is we have identified six migrants in the LFS, recent migrants in the LFS. It is very hard without looking at what you are looking at to see exactly what it is.

  Q266  Jim Cousins: In the case of the North East, each year in the LFS there is a discovery of between six and 24 international migrants in the LFS Survey in the North East.

  Ms Dunnell: Right.

  Q267  Jim Cousins: On the basis of that, the overall population of the North East is being reduced by 8,500 and 6,000 of that reduction is being attributed to Newcastle. That cannot be a sound or robust method of being so sure about those things now, can it?

  Ms Dunnell: Have you got any more information?

  Ms Matheson: I have not without looking at the numbers.

  Ms Dunnell: We will have to look at that in detail.

  Q268  Chairman: I think we will need a note on that.

  Ms Dunnell: We will come back to you on it.[4]

  Q269 Jim Cousins: Now we move on from the difficulties of arriving at the information to how that information gets used. We have had a number of representations from local authorities on this point. Do you think, and I am not here asking the statistical margins of error, which clearly are potentially quite great in this, it is a sound method for allocating resources through the Department of Communities and Local Government or through the Department of Health to use information based on this kind of data?

  Ms Dunnell: That is really up to DCLG to answer. I would say that the Office and its predecessors have been doing population estimates for many, many years and they are based on data that are available. At the moment we are working very, very hard to improve them. It is not just the total numbers in the population that are taken into account in these formulae, as I think I explained earlier, lots of other factors about areas are taken account of in the formulae.

  Q270  Jim Cousins: Let us just consider those two departments, DCLG and the Department of Health. The Department for Communities and Local Government used to allocate resources annually with a post-dated correction for new population information as it became available and there were data changes which were retrospective, so there was a built-in method of adjustment. The method from this year that the Department is using is in a three year slab which does not change, so in the year 2010-11 the Department for Communities and Local Government will be allocating resources on the basis of the mid-year estimate of populations of 2004 projected forward for those years with no system of retrospective adjustment. Do you think that is a sound method for distributing resources fairly?

  Ms Dunnell: It is not up to me to judge what decisions my colleagues in DCLG—

  Q271  Jim Cousins: What margin of error will there be by 2011 based on such methods of doing things?

  Ms Dunnell: We would have to go away and try to estimate that. 5[5]

  Q272 Jim Cousins: I would be grateful.

  Ms Dunnell: What they have done this time, which they do not always do, given they have decided to give people a three year settlement, is to use projections which do take account of the future changes in the population. What they have not done is wait to do that until we had the latest population projects, but we were in contact with them about that obviously.

  Q273  Jim Cousins: Let us look at the Department of Health then. In the current year, 2007-08, the Department of Health is allocating resources to primary care trusts. They have a complicated system of weighting but the raw population data is done in this fashion: they take the 2003 population projections for the relevant year and adjust it for the 2004 transfers across areas using GP registration data of a completely different kind. For the forthcoming year, 2008-09, the Department of Health has chosen to freeze all of this data and they are simply going to carry the same information forward to 2008-09. So the Department of Health will be allocating resources to primary care trusts in 2008-09 on the basis of 2003 estimates projected forward, adjusted by the 2004 changes between areas on the basis of GP registrations. Does that strike you as being a sound basis for arriving at a correct impression of the population in 2008-09?

  Ms Dunnell: It may not have been the one I would have chosen but the Department of Health have an awful lot of information about patients in their own systems and they have decided to do it their own way. The only thing I can do is talk to their chief statistician and see what impact he has had on the whole matter, but their funding decisions on allocation are not something that they regularly consult us about. They consult us about what we think about the estimates and projections that we produce each year.

  Jim Cousins: If you were able to do that and report it back to us, that would be very helpful to us. Thank you. [6]

  Q274 Chairman: Professor Rhind told us that there was some concern that local authorities had a vested interest in finding ways to increase their population count. How do you ensure that particular local authorities, given some of the problems last time, are not all in the game of actually inflating their population count at the edges where they can?

  Ms Dunnell: That is exactly why we are very, very clear that when we do our annual population estimates we actually use a method which is comparable for every single local authority across the country and why, when we talk about working very closely with local authorities, this is not so that they can influence our numbers and why we are very keen to work with them to identify new ways of using administrative data but we are not prepared to accept a figure on this from one local authority which may be on a very different basis from another local authority. We will uphold the provision of estimates that are based on the best methodology that we can do given the data sources that are comparable across the country.

  Q275  Chairman: Coming back to the questions asked by Nick Ainger, what are the barriers to the adoption of a system that is more based on administrative records rather than the Census? I think the National Statistician mentioned "cultural barriers". What are the barriers? There are legal barriers presumably.

  Sir Michael Scholar: I think there were some important legal barriers which are potentially removed by the 2007 Statistics and Registration Services Act. That Act provides gateways for opening up some barriers between government departments which until now make it difficult or impossible to communicate administrative information from those departments to the ONS. I think that one of the streams of work coming out of the 2007 Act will be to identify in a list of priorities for moving and seeking to put to Parliament a case for opening up this or that gateway.

  Q276  Chairman: So there will be an incentive for the Board to get on and identify where data could be shared?

  Sir Michael Scholar: Absolutely. From the evidence that you have heard this afternoon, and I have been listening to, it is clearly of the first importance for improving the UK's statistical system that we should make the maximum use of administrative sources, not only from the point of view of accuracy and coverage but, I also suggest, from the point of view of cost-effectiveness.

  Q277  Ms Keeble: Just looking at the construction of the Board, there was a proposal that you should have somebody from a commercial background as a non-exec. Has that actually been achieved?

  Sir Michael Scholar: Yes, indeed. There are two people on the non-executive cadre of the Board who have that kind of background. Lord Rowe-Beddoe of Kilgetty has a distinguished career in business, both behind him and he is currently involved in a number of businesses here and abroad, and Partha Dasgupta has, until very recently, held an executive position in a financial institution in the City of London. So there you have two people who have current and very recent business experience.

  Q278  Ms Keeble: They only meet formally in April as a Board, is that right? Have you met informally as a group?

  Sir Michael Scholar: No. I think it was before you came into the room that I mentioned the first meeting of the Board is on Saturday 2 February, this coming Saturday. It is our first meeting of any kind and we are planning two further meetings before April. I say they are formal meetings, they are formal meetings of the Shadow Board because the Board does not exist until 1 April. We are having those meetings first of all to be able to respond to the various pieces of consultation which the Government has launched and seeks our view on, and also to be ready to hit the ground running on 1 April.

  Q279  Ms Keeble: One of the things you have got to respond to is the pre-release consultation with the Government, is it not?

  Sir Michael Scholar: Yes, it is.

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