Memorandum from HM Treasury
As the White Paper on statistics set out, extending
the initial coverage of National Statisticsat the extreme
to cover all statistics put out in the public domainis
not a straightforward issue. Too ambitious a programme of expansion,
or too broad a definition of initial scope, would pose considerable
practical difficulties, particularly in terms of establishing
priority-setting and quality assurance processes.
Of particular importance in this context is
the programme of quality assurance processes which are planned
under the new arrangements. The White Paper set out plans for
a programme of thorough reviews of key outputs, at least every
five years, with the involvement of methodologists and outside
expertise, as appropriate. Each review will advise on implementing
desirable change and quality assuring the result, and any recommended
methodological improvements will need to be factored in to future
National Statistics work programmes presented by the National
There would thus be significant resource implications
from the extension of the scope of National Statistics. It is
for these reasons that the White Paper proposed a considered
expansion of the scope of National Statistics over time, having
regard to available resources.
A NOTE ON
1. DETAILS OF
ON 16 FEBRUARY,
On the day of the alleged leak following study
of the news agency wire transmissions, the ONS sought advice on
whether any atypical market movements were seen.
ONS staff made contact with officials from the
Debt Management Office who analysed the movements of short sterling
interest rates. These were seen as the most significant rates
in this context because other markets were liable to have been
influenced by movements anticipated due to predicted activity
in the German Bund market. Within the short sterling market, while
there were some relatively sharp movements before the labour market
and earnings data were released, the DMO felt that such movements
were within the level of activity expected on the morning of release
of market sensitive data.
ONS staff, via the Treasury, also met with those
LIFFE Officials who had been monitoring the trading activity in
the short sterling futures contract. The LIFFE Officials were
able to confirm that this activity had not been regarded as anything
other than proper.
On the basis of evidence from the Debt Management
Office and LIFFE, ONS concluded that an investigation of the specific
incident appeared unwarranted. However, given that rumours had
circulated, the then Director of ONS decided that a general review
of the security arrangements surrounding the pre-release access
to all market sensitive statistics should be undertaken.
2. CURRENT ONS
Security Arrangements for Pre-Release Recipients
Packs containing the data for pre-release recipients
go out from the ONS Press Office 40 hours in advance of official
release. They are double-sealed, with a clear "personal and
confidential" marking on the inner envelope. The outer envelope
has a "timed immediate" label, in line with ONS security
Draft releases and the briefing sent to advance-recipients
are clearly marked with a "Do not photocopy" watermark
and a dated personal and confidential warning.
Packs are delivered by hand to the security
desks or post rooms of the departments of named pre-release recipients.
Security Procedures During Production
All pre-release material, including work in
progress, is kept in a security cupboard equipped with a combination
All electronic files are kept in restricted
areas of the server. Access to these folders can only be granted
by one named individual designated as data custodian.
The area where Labour Market Statistics are
produced within ONS is a self-contained unit. It would not be
possible for a non-team member to see documents or computer screens
without the team being aware of this.
Staff are under strict instructions to lock
away documents relating to the production of these statistics
when they are away from their desks.
The list of addresses of advance recipients
are checked on a regular basis to ensure that material is delivered
3. THE TERMS
ONS has an extremely good record in its security
arrangements. Indeed, officials from EU Member States and around
the world come to the UK to learn from our experience.
Although there was no compelling evidence for
a full inquiry, ONS takes the allegation of a breach of security
extremely seriously. For this reason and to maintain market confidence
in the security surrounding our outputs, Dr Holt, the then Director
of ONS, ordered a general review of security procedures. This
review will be undertaken with HM Treasury, the Department for
Education and Employment, the Department of Trade and Industry,
the Scottish Office, the Welsh Office and the Northern Ireland
Office who receive pre-release statistics to review the way in
which the releases are handled.
The terms of reference for the security review
are as follows:
To review security procedures surrounding
all market moving statistics.
To review internal security procedures
such as desktop security.
To involve other departments in a
review of the way in which ONS data is disseminated.
The published Jobcentre vacancy statistics in
"Labour Market Trends" are accompanied by a health warning
in the form of a footnote: "Vacanies notified and placings
made by Jobcentres do not represent the total number of vacancies/engagements
in the economy. Latest estimates suggest that about a third of
all vacancies nationally are notified to Jobcentres; and about
a quarter of all engagements are made through Jobcentres."
On occasions where, for the sake of brevity, this footnote is
omitted it is always made clear that the statistics relate to
Jobcentre vacancies only.
As explained in the earlier evidence provided
to the Sub-committee, it is clear that the quoted market shares
of the Employment Service are only broad estimates. For this reason
the official vacancy statistics are not generally presented in
a grossed up form to correspond to the whole economy, and where
an overall figure has been given, for example, in paragraph 4
of the report "The Goal of Full Employment: Employment Opportunity
for all Throughout Britain", it has been assumed it would
be clear that the estimate of "around 1 million" vacancies
is only broadly indicative, without giving a specific health warning.
While this estimate is not precise, the available evidence is
that it gives a realistic order of magnitude.
The Office for National Statistics is aware
of the demand for better estimates of the number of vacancies
and has been experimenting with a simple regular enterprise survey-based
approach to provide a fuller measure of vacancies across the economy.
It is planned to commence such a survey, in consultation with
departments, towards the end of this year with results beginning
to be published next year.
The Economic Secretary is happy to confirm that,
both at present and under the new arrangements for National Statistics,
she and other Ministers will continue to be fully accountable
to Parliament through written and oral questions, adjournment
debates, Opposition Day debates and other procedures for all aspects
of the statistics that the ONS and other Government departments
are responsible for.
The White Paper confirmed the Government's view
that a scrutiny role for Parliament within the new arrangements
would be desirable and that it would be for Parliament itself
to decide how this might be achieved. In her oral evidence on
1 March, the Economic Secretary reiterated that the Government
is attracted to the option that the scrutiny role on cross-cutting
statistical policy issues could fall to a single committee, such
as the Treasury Committee (or this Sub-Committee), given its wide
ranging interests in both economic and social outcomes. In addition
to this, it would be for other committees to consider statistical
issues in their areas as they see fit. She has been glad to receive
a letter subsequently from Mr Giles Radice confirming that the
Treasury Committee is prepared to assume such a role.
10 April 2000
1 This memorandum was requested following the oral
evidence session held on 1 March 2000. Back