Private firm to collect RPI data in pounds 1m deal: CSO says contracting out work may speed up release of inflation figures

JOBCENTRE staff will no longer collect the 140,000 high street prices each month that are used to calculate the rate of inflation. The task is being contracted out to a private-sector market research company for around pounds 1m a year.

The Central Statistical Office believes contracting out will ensure that prices in London and the South-east will cease to be under- represented in the retail price index as they are at the moment. Prices will be collected more from large and small stores, rather than medium-sized outlets, which are currently over-represented.

Price collectors will be equipped with hand-held computers, which will allow instant comparison with prices collected for similar products by other collectors. The CSO hopes that more efficient collection will allow the inflation figures to be released more quickly.

Research International, founded in 1962 and Britain's fourth-largest market research company, has won the contract. Eighteen organisations expressed interest, of which eight - including the Employment Service - were asked to tender.

RI will collect price data in parallel with the Employment Service for a few months, providing data first for the February 1995 RPI. The CSO said that RI would ensure prices were collected from a representative sample of areas and outlets, rather than over-representing those near JobCentres. Choice of products and outlets will be controlled more tightly.

Simon Briscoe, economist at Warburg Securities, said the under-representation of prices in London and the South-east may have artificially depressed the measured rise in inflation in the late 1980s and the subsequent fall. A greater weight to large stores in the index might also put upward pressure on inflation next year as the discounting of own-brand goods unwound.