CSO rethink on jobless count could add 100,000 to total

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The Independent Online
The Central Statistical Office is believed to have decided on a change to the collection of unemployment statistics that will add more than 100,000 to the official unemployment count.

The switch to a new method of collecting the figures has been expected since the CSO took over responsibility for them after the Department of Employment was abolished in July.

Last month the CSO set up a task force to study the options for collecting monthly unemployment figures on an international definition, which are at present only available quarterly.

The task force was not expected to report until early next year, but the presumption in favour of switching to this more widely-accepted definition was very strong.

Tim Holt, the new head of the CSO, said last month: ``There is an expressed need for an ILO estimate at monthly intervals, and we shall see if this can be satisfied.''

The ILO definition of an unemployed person is someone without a job who has been looking for work in the past four weeks and is available to start work in the next two weeks. This is measured by a survey. The Government's current measure of unemployment is the number of people claiming unemployment benefit.

The ILO measure for March to May showed unemployment to be 2.43 million, an increase on the previous quarter. The official claimant count was just over 2.3 million in May, and is still falling according to the latest published figure.

The claimant count has been discredited by numerous changes in benefit rules which have mainly reduced the official figure for unemployment. April's changes to invalidity benefit have distorted the measure again, this time by adding to the register.

Earlier this year the Royal Statistical Society strongly recommended a switch to a monthly ILO measure. Bill McLennan, the CSO's former director, told the Independent last January that use of the claimant count definition had reduced public confidence in government statistics.

Simon Briscoe, an economist and statistics expert at the investment bank Nikko Europe, said: ``A switch to the ILO measure would be heartily welcomed by users. The changes to the current measure have gone a long way to undermine confidence in the official statistics.''

The former Department of Employment opposed the change on grounds of cost, estimating the extra annual cost of full monthly rather than quarterly surveys of the labour force at pounds 10m. However, shorter monthly surveys would be far cheaper.

The CSO's move follows confirmation last week that it will be merging with the Office of Population Censuses and Surveys to form a new ``Next Steps'' agency, the Office for National Statistics.

The new agency will be responsible for important economic and social statistics. Dr Holt is said to be determined to enhance the its reputation for the quality of its statistics.