Select Committee on Treasury Second Special Report



SECOND SPECIAL REPORT

The Treasury Committee has agreed to the following Special Report:

NATIONAL STATISTICS: RESPONSES FROM THE GOVERNMENT AND THE STATISTICS COMMISSION TO THE COMMITTEE'S SECOND REPORT OF SESSION 2000-01

1. On 18 January 2001 we published our Second Report, National Statistics, as House of Commons Paper No. 137. The Report originated in our Sub-Committee. We have now received responses from the Government (dated 26 March) and the Statistics Commission (dated 21 March), which are appended below. For ease of reference, the two responses are collated under the Report's recommendations to which they refer.

Committee's Conclusions and Recommendations, with Responses by the Government and the Statistics Commission

Letter from Melanie Johnson MP, Economic Secretary to the Treasury, to Sir Michael Spicer MP, Chairman of the Treasury Sub-committee

In response to the Treasury Committee's report on National Statistics published on 18 January, enclosed are the Government's observations on each of the recommendations in that report.

I would like to thank the Committee for its work in scrutinising the new arrangements for National Statistics as they deliver our promise of official statistics that command the trust and confidence of Parliament and the public.

I have also enclosed a complete listing of National Statistics outputs as at early February,[2] as promised in the oral evidence submitted to the Sub-committee last November. I hope you find this useful.

Introduction to the Statistics Commission's response

The Statistics Commission was pleased to be invited to give evidence to the Treasury Committee at an early stage in the operation of the new National Statistics arrangements and to have the opportunity to respond to the Committee's second report.

Committee Conclusion

  (a) We identified a number of weaknesses in the management and structure of Government statistics. The Government has responded by introducing changes and innovations which, as far as they go, we support, although we are dissatisfied that the Government has not placed the new arrangements on a statutory footing, something to which we return in the concluding paragraph (paragraph 2).

Government Response

The Government welcomes the recognition and support of the Sub-Committee for the changes in the management and structure of Government Statistics that have recently been undertaken. The Framework for National Statistics has received a positive response from many key stakeholders, as shown in the written evidence submitted to the Sub-Committee by the RSS, SUC, Society of Business Economists and the British Retail Consortium.

The organisational arrangements make possible further changes to strengthen the statistical capacity and performance of the Government Statistical Service.

As stated in the Framework for National Statistics, the Government has asked the Statistics Commission to review the need for statistical legislation after its first two years and report back to the Minister for National Statistics, and keep the legislative framework under review thereafter.

Statistics Commission Response

The Commission's views on legislation and related general issues are set out at (l) below.

Committee Conclusion

  (b) It is important that the scope of National Statistics expands over time, so that Government policy-making, and the scrutiny of it by Parliament and the public, is increasingly well informed (paragraph 6).

Government Response

The Framework for National Statistics affirmed the Government's commitment to keep the scope of National Statistics under review. As the Framework notes, Ministers will take decisions about the coverage of National Statistics in the light of the costs and benefits involved. Under the Framework, the Statistics Commission advises Ministers of any widespread concerns about the quality of official statistics.

The current set of National Statistics outputs is very comprehensive and extensive, and spans the whole gamut of government statistical outputs.

Attached to this response is a complete listing of National Statistics outputs as at early February, as promised in the oral evidence submitted to the Sub-Committee last November.[3] This list has already been supplied to the Statistics Commission. The Office for National Statistics is working with other Departments to make such information continuously available from the National Statistics website in future.

Committee Conclusion

(c) We welcome the intentions of the Statistics Commission and the National Statistician to advise on scope, and recommend that, in its reply to this Report, the Government acknowledges and clarifies their roles in this area (paragraph 7).

Government Response

The Framework for National Statistics sets out the roles of the Statistics Commission and of the National Statistician. The National Statistician is both the Head of National Statistics and the Director of the Office for National Statistics; he is the Government's chief professional adviser on all statistical matters. The Framework gives the Statistics Commission a specific responsibility to advise Ministers of any widespread concerns about the quality of official statistics so that Ministers can take these considerations into account when making decisions about National Statistics.

Statistics Commission Response (to recommendations (b) and (c))

The Commission believes it is important that the scope of National Statistics should evolve over time and respond to the changing needs of society. We have already made clear our intention to advise on scope when appropriate and would expect to extend our role in this area as our understanding of the needs of users and other stakeholders develops.

Committee Conclusion

  (d) Our concerns remain about the role of Ministerial discretion in determining the scope of National Statistics and we prefer the scope of National Statistics to be an independent decision for the National Statistician, in consultation with the Statistics Commission (paragraph 8).

Government Response

The Government's view is that the roles and responsibilities of Ministers, the Statistics Commission and the National Statistician should remain as set out in the Framework for National Statistics.

Statistics Commission Response

We believe the role of the National Statistician (advised by the Commission) should be strengthened in order to reflect the importance of professional issues here.

Committee Conclusion

  (e) Users of statistics, particularly in Parliament and the media, should pay careful attention to whether or not Government statistics carry the National Statistics badge. We hope the media will adopt a practice of reporting whether or not a particular Government statistic is a National Statistic (paragraph 8).

Government Response

The Government would encourage and support the greater use by the media of references to National Statistics when reporting on these official statistics.

The Government believes that National Statistics deserves wide support and recognition. It is the biggest overhaul of official statistics for over thirty years and puts the nation's statistics on a new and better footing.

Committee Conclusion

  (f) The Statistics Commission could complement Parliament in scrutinising the work of the ONS, the statistical work of other Government departments, and the ways in which the Government uses statistics. We hope that our successors in the next Parliament use the Statistics Commission's reports to continue our scrutiny of National Statistics (paragraph 9).

Government Response

The White Paper on Statistics made clear the Government's belief that a scrutiny role for Parliament within the new arrangements would be desirable. The Economic Secretary wrote to the Chair of this Sub-Committee last year welcoming its offer to continue its scrutiny of National Statistics.

The Framework for National Statistics affirms the Government's intention that the Commission should have a vital role in providing an additional safeguard on the quality and integrity of National Statistics.

Statistics Commission Response (to recommendations (e) and (f))

We agree that the media's awareness of National Statistics should be encouraged and we aim to play our part in doing this, for example in our annual report. We also hope that this report (along with more specific reports we will produce from time to time) will be helpful to Parliament in its consideration of National Statistics.

The emphasis of our first (part year) annual report will be on the broader National Statistics context and on the strategic direction we are establishing for our future work, but it will include reports on the five specific projects we have initiated including those on National Statistics to monitor the NHS Cancer Plan, the reliability of National Statistics and progress with implementing the Review of the Revisions to the Average Earnings Index.

Two broader National Statistics topics we also plan to cover are the new National Statistics code of practice and the high level programme for National Statistics covering the three-year period from 1 April 2001, although in both cases delays in receiving these documents mean that our work will be less advanced than we would have hoped by the end of the reporting year.

Committee Conclusion

  (g) Irrespective of the Minister's understanding that direct access to the Prime Minister is usually indirect, through the Head of the Home Civil Service, in this case, where the National Statistician is responsible for guaranteeing the integrity and quality of National Statistics, we recommend that direct access should mean direct, not through the Head of the Home Civil Service (paragraph 11).

Government Response

For as long as records we have to hand make it clear, the Head of the Government Statistical Service (now the National Statistician) has been granted direct access to the Prime Minister on matters concerning the integrity and validity of official statistics. This position was reaffirmed in the Framework Document.

In this context, direct access is distinct from the normal mode of access to the Prime Minister, which is via Departmental heads and Departmental Ministers. The National Statistician is asked to ensure that the Head of the Home Civil Service is kept informed. That request does not stand in the way of the National Statistician's right of access, i.e. it is about the way the right of access is ascertained and is not a qualification of it.

Statistics Commission Response

We hope it will be possible to resolve this issue between those most directly involved but we would expect the National Statistician to inform the Commission if he wanted direct access to the Prime Minister on a particular occasion and this was not forthcoming.

Committee Conclusion

   (h) We welcome the early attention which the Statistics Commission will pay to the division of responsibilities for the Retail Price Index (RPI) between the National Statistician and the Chancellor of the Exchequer. We have heard no sound argument why the scope and definition of the RPI, like the features of any other important statistical series produced by the ONS, should not be under the control of the National Statistician and we reiterate our earlier recommendation that the Chancellor should not control these matters (paragraph 12).

Government Response

The RPI is an indicator of the utmost economic importance which is used for many different purposes. As a reflection of its special importance to the UK economy and in line with long-standing arrangements, the scope and definition of the RPI remain under the ultimate authority of the Chancellor.

The Framework Document is not ambiguous. It defines the principles and procedures that underlie the relationship between the National Statistician and the Chancellor on the governance of the RPI.

The RPI comes within the scope of National Statistics, so the National Statistician takes the lead in advising on methodological questions concerning the RPI, but the scope and definition of the index will continue to be matters for the Chancellor of the Exchequer.

Statistics Commission Response

While this interpretation goes a little further than the chairman's undertaking that this is "... a matter which the Commission will in due course take a view on", the Commission shares the Committee's view of the importance of this area of National Statistics. We have decided to undertake a broadly-based scoping study on price indices and deflators generally and will assess in the light of that what the priority areas are for further work. We will certainly not hesitate to look at issues of organisation and governance if this initial work points to problems.

Committee Conclusion

   (i) It is promising that the Statistics Commission has paid early attention to the reliability of National Statistics and we look forward to the development of clear, consistent guidance for users on this issue (paragraph 13).

Government Response

The Government believe that it is essential that all National Statistics are accompanied by information on their reliability, to aid users' interpretation. To ensure that this is done, the National Statistician will be setting high standards on this in the forthcoming National Statistics Code of Practice.

The ONS have already supplied the Commission with information to help them in their investigation, and plan to have further discussions with them shortly to determine how this can be taken forward.

Statistics Commission Response

We have made clear to the National Statistician that we believe that information on the reliability of National Statistics should be improved. This will need resources but we believe it is important they should be made available by the statistical service for this work which underpins National Statistics as a whole.

Committee Conclusion

   (j) The ONS's reassessment of the reliability and use made of job vacancy statistics is a positive indication of the impact of the new arrangements for National Statistics. We recommend that the Statistics Commission, in its work on the reliability of National Statistics, pays close attention to labour market statistics (paragraph 16).

Government Response

This is for the Statistics Commission to decide in the context of its responsibilities in the Framework for National Statistics.

Statistics Commission Response

The Commission has already focused its attention on one area of labour market statistics by

seeking a report on progress implementing the Review of the Revisions to the Average Earnings Index. We note the Committee's views on the importance of this area of statistics as a whole and will take them into account in formulating our future work programme.

Committee Conclusion

   (k) We recommend that, in reply to this Report, the Government publishes in full its thinking on the future development of average earnings data (paragraph 17).

Government Response

In the draft National Statistics Work Programme, which the National Statistician sent to the Statistics Commission on 8 March, the following proposals were made in respect of average earnings data:

(i) ONS will pursue the options for expanding the sample size of the survey upon which the Average Earnings Index is based;

(ii) the Average Earnings Index is scheduled for a routine quality assurance review.

Statistics Commission Response

As indicated above the Commission has already demonstrated its interest in these data. We would welcome publication of the Government's thinking on this.

Committee Conclusion

   (l) It is absolutely essential that the new arrangements for National Statistics should be enshrined in a Statistics Act. If the Statistics Commission concurs with our opinion in two years' time, we expect Ministers to bring forward legislation as a matter of priority (paragraph 19).

Government Response

The Government will consider the Statistics Commission's report at the appropriate time.

Statistics Commission Response

The Commission takes its responsibility to advise Ministers on the need for statistical legislation very seriously and is not waiting until the initial two year period has ended to address the issue. At present the balance of the arguments is strongly in favour of legislation although we recognise that precisely what that legislation should cover and how will need careful consideration in the light of experience of the new arrangements. It is also important to ensure that this advice takes account of experience in other countries and we are grateful to the Royal Statistical Society for its offer to invite a number of international experts to London this summer to brief us.

Meanwhile the key missing component of the non-statutory framework, the new National Statistics code of practice, must rapidly be put in place. We are extremely disappointed that the National Statistician has not yet been able to issue the consultation version of this code and are anxious to see it as soon as possible.


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Prepared 29 March 2001