Quality control urged for national statistics

ONS needs its own IMF-style agency to police quality of its output, report finds

The regulator of the Office for National Statistics needs its own IMF-style agency to police the quality of the ONS’s output, a government-commissioned report has said.

In his final report on the quality of UK statistical output, Sir Charles Bean said there should be an “Independent Regulation and Evaluation Office” embedded within the UK Statistics Authority, which is currently supposed to regulate the quality of ONS statistics but has been accused of being “asleep at the wheel” in recent years.

The recommendation falls short of the complete governance overhaul recommended by Andrew Tyrie, chair of the Treasury Select Committee, who last month called for the UK Statistics Authority to be scrapped and replaced with a “new autonomous body”.

In his report, Sir Charles said this new evaluation arm would provide the authority’s board with “digestible and relevant information” on the quality of statistics and a public annual report. It would also have the ability to “recommend the creation” of new statistics or modify existing ones.

The UK Statistics Authority’s director-general for regulation, Ed Humpherson, welcomed Sir Charles’s report and said the body would consider how it might build the sort of office recommended over the coming months. “Of course we appreciate that there is more to be done,” he added.

Mr Tyrie said Sir Charles’s compromise solution “may have a good deal of merit”, adding that “the current arrangements have not been a success, to put it mildly”.

The International Monetary Fund established its own Independent Evaluation Office in 2001 to “enhance the learning culture” within the IMF. And it has not been afraid to bear its teeth. In 2014 it produced a report criticising the fund for advising governments, in 2010, to start cutting their budget deficits.

When Sir Charles. a former deputy Governor of the Bank of England, was commissioned in March 2015 by George Osborne to compile his report, it came in the wake of years of grumbling from users of national statistics about the quality of the ONS’s output.

The Independent reported in 2011 that some at the Bank of England were starting to question the competence of the ONS after a series of important reports were delivered late.  In its quarterly inflation reports, the Bank also produces its own “back-cast” of the path of GDP, with the implication that it does not think the ONS’s official figures are particularly reliable.

Another recommendation from Sir Charles’s report was for the ONS to establish a “data science hub” to better measure digital activity. The report said the UK’s true annual growth rate could be between 0.3 per cent and 0.7 per cent higher if this activity were picked up by statisticians.  The UK’s official growth rate in 2015 was 2.2 per cent.

“We need to be candid about the limitations of UK economic statistics,” said Sir Charles. “The UK was one of the original pioneers of national accounting. We need to take economic statistics back to the future or we risk missing out an important part of the modern economy from official figures.”

Sir Andrew Dilnot, the chairman of UK Statistics Authority, welcomed the recommendations and said it would “take time to read and consider the report and its findings”.

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