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Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18
Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18
Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18
Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18
Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18
Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18
Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18
Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18
Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18
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Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18

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  • 1. Office for National Statistics 1 Consultation Response to the public consultation on National Accounts and Related Statistics Work Plan 2013/14 to 2017/18 Introduction This document summarises responses to the public consultation on the 2013/14 to 2017/18 National Accounts and Related Statistics work plan (hereafter referred to as the NA work plan. The purpose of the NA work plan is to give users a clear set of national accounts objectives with an associated timetable. Against a backdrop of legally required changes over the coming years the Office for National Statistics (ONS) needs to prioritise developments and improvements to fit the available resources, and the NA work plan is one mechanism for doing this. The NA work plan consultation ran from 31 May 2013 to 31 July 2013 and invited all users and potential users of national accounts and related statistics to comment on a draft work plan. The consultation was sent to a variety of stakeholders as well as to previous customers of national accounts. The consultation was also posted on the ONS website, was sent out on the ONS twitter feed and was publicised on the Statistics User Net website. The consultation was conducted in line with the UK Statistics Authority Code of Practice. Summary of Responses Five responses were received to the consultation, representing key government users of national accounts and related statistics, as well as wider users within the statistical community. It was clear from the responses that almost regardless of the exact content of the work plan, the very fact that there was to be a publicly available work plan giving clear direction and prioritisation to the national accounts and related statistics for the next three to five years was welcomed by all respondents. This section provides the response summaries to each heading within the draft work plan, commenting where appropriate and concludes with some next steps.
  • 2. Office for National Statistics 2 Section 2: ONS and National Accounts Strategic Aims The nine strategic aims, published as part of the 2013-2023 ONS strategy, were linked to the NA work plan. Respondents supported the published ONS strategy and what it meant for the NA work plan (Paragraph 5). Financial & Economic Statistics Users’ Group (FESUG) – ‘Of course, FESUG supports the published ONS Strategy for 2013-2023 and its aims.’ Bank of England (BOE) – ‘Pushing forward this work plan should not be at the cost of delivering business-as-usual timely and accurate economic data.’ ‘Section 3: Looking back’, and ‘Section 4: The next five years: Summary’ received no detailed comments and the remainder of the responses relate to the detail contained within section 5. Section 5: The Next Five Years: Detailed Work Plan The topic areas in section five have been broken down into groups of paragraphs, and each addressed in order. Where there is no mention of a topic it is because this received no comments from respondents, and where there is no response from ONS it is because the comments are in line with the work plan commitments. Paragraph 14 – the regular production and presentation of outputs In this paragraph ONS set out the continued goal of publishing all outputs in an easily accessible and understood format: HM Treasury (HMT) – ‘Our essential priority remains the publication of robust, timely and accurate headline National Accounts that are subject to minimal revision and error. We consider new additions to the dataset are less important relative to this core priority. Similarly, while work for example on the productivity puzzle has been helpful, we do not see this as playing best to ONS’ comparative advantage.’ BOE – ‘We appreciate ONS’ briefing material that helps users to understand the drivers of particular movements, supplementary to the available published data. For example, we found ONS analysis of the one-off factors affecting growth during 2010-2012 extremely useful. And we find ONS commentary similarly useful on the assumptions they have made in coming up with estimates (e.g. month three assumptions in the initial GDP release). We would prioritise the provision of timely, accurate and detailed statistics over economic analysis of statistics. While we value collaboration with ONS and help on economic analysis of topical issues (e.g. the productivity puzzle), we believe that it is most efficient for ONS focus their efforts in areas where they have a comparative advantage. ’ FESUG – ‘FESUG recommends that ONS continues to build on existing opportunities to engage appropriately with its audiences. Our members are typical of the informed/expert user audiences
  • 3. Office for National Statistics 3 and have derived benefit and understanding from ONS presentations on conceptual changes and dialogue on outputs within FESUG’s range of interests.’ ONS response – ONS welcomes these comments and will seek to continue to provide commentary to explain movements in our data series to aid interpretation. We would welcome working with FESUG and the wider user community in further developing our approach to user engagement. We see economic analysis as an essential component in quality assuring, understanding and explaining our statistics. Paragraph 15 – Proposals for changes to the current range of products This paragraph proposed three main changes to the range of products produced by ONS: 1) The production of a monthly output based GDP estimate 2) Reducing the frequency of Economic position of households to an annual publication and merging with Consumer Trends 3) Exploring the feasibility of expanding the current Business Investment publication to include all components of Gross Fixed Capital formation. Taking each of these in turn, for a monthly GDP estimate the respondents were against the development: Sigmaplus Ltd (Independent Statistical Consultant) – ‘Monthly GDP is a lower priority development (let the users deduce the monthly path from existing series).’ FESUG – ‘We have concerns about impacts on the credibility of quarterly estimates and we do not feel the argument for this is sufficiently made.’ BOE – ‘We do not attach a high importance to the investigation of whether to produce a monthly output based estimate of GDP. Our initial view is that the additional noise that the publication of such a series would introduce into economic commentary might outweigh the benefits.’ HMT – ‘At this stage we have serious reservations about the desirability of a monthly measure of GDP. Monthly figures for the headline indices of construction, production and services can be very volatile from month to month and can also be subject to significant revision. The introduction of a new monthly measure of GDP may serve more to confuse than support economic debate. That said, the introduction of the monthly detail into the headline releases for GDP has provided valuable context, and seems for the moment to get the balance right between the making available monthly information and integrating that detail with headline measures.‘ ONS response – Based on the responses to this work plan consultation ONS will not develop monthly GDP. Users may wish to note that a table of the latest monthly estimates for the components of GDP output (with the exception of agriculture) is now included in the separate statistical releases that feed into GDP output e.g. Index of Services and Index of Production. Respondents felt that the plans to reduce the frequency of Economic Position of Households to an annual publication and integrate with Consumer Trends needed to be made clearer:
  • 4. Office for National Statistics 4 Sigmaplus Ltd – ‘Dropping the quarterly series on the economic position of households – What will remain on a monthly or quarterly basis for the household sector – net saving? Consumption expenditure? Some indicators are needed more frequently than annual.’ BOE – ‘We would be content for the Economic Position of Households publication to be reduced to annual frequency, and merged with Consumer Trends.’ FESUG – ‘The loss of quarterly information on household income and expenditure appears to be a retrograde step, leaving a knowledge gap in identifying emerging trends.’ ONS response – There has been some confusion over this proposal. ONS is proposing a reduction in the publication schedule for the Economic Position of Households publication to annually from quarterly, reducing the frequency of the additional commentary and analysis on the household data but not reducing the amount of data available. No quarterly data for the household sector would be withdrawn - it will all still be available in the quarterly United Kingdom Economic Accounts publication. Expanding the current Business Investment publication was supported by several respondents: FESUG – ‘Expanding Business Investment data to all Gross Fixed Capital Consumption will be welcome, but there is an associated need for segmentation across industries, regions and business size.’ BOE – ‘We would support the inclusion of the full asset and industry breakdown of data in the provisional business investment release (available in month 2). We use these disaggregate data intensively, and would welcome the earlier publication of these full splits.’ ONS response – ONS are currently trialling the publication of Gross Fixed Capital Formation (GFCF) asset and industry breakdowns in the month two provisional release. Unless we receive any feedback that this is not what users require we plan to continue with this approach, which supports the responses received. In relation to the provision of GFCF by region, it is not possible to provide regional splits using the current data sources. Unfortunately this would require a larger sample size, which would place a cost on ONS and respondents to the capital expenditure survey, one of the major sources for GFCF. With respect to publishing GFCF by business size, this is not possible but we will look at the feasibility of publishing capital expenditure survey results by business size, following the publication of Blue Book 2014. Paragraph 19 – The ONS Website The main medium for disseminating national accounts is the ONS website. This section looks at the move to using data explorer and to open data: BOE – ‘Access to data via your website is important for our analysis. In particular, we appreciate ONS efforts to improve the search facility on the website. But we attach less importance to data manipulation features via the website (e.g. tabulation/graph functions).’
  • 5. Office for National Statistics 5 FESUG – ‘User entry to the ONS website is myriad. Users (particularly citizen users) do not understand the structure of the website....’ ‘It would improve understanding of the ONS website if there was clear signposting, e.g. from a GDP release page, ‘latest articles’, ‘data download’ should be obvious routes and vice versa. We do not underestimate the challenges, but user views should be integral to website development.’ ONS response – Progress has already been made in improving accessibility and this has been noted by respondents, but clearly there is a need for further improvements as noted in the NA work plan. Paragraphs 23-24 ONS Key Accounts strategy and User engagement strategy This section describes how ONS will consult key users, and the wider user engagement strategy: FESUG – ‘Articles and an increasing willingness to explain issues to users are supported by FESUG. The user community is under constant change, so advertising ‘constitutional forums’ and contact methods are crucial to improving and maintaining user education and involvement.’ Sigmaplus Ltd – ‘It is not clear why the Financial and Economic Statistics User Group is not mentioned under user engagement?’ BOE – ‘We strongly support user forums for the Bank, HMT and OBR (e.g. the QNA briefing meeting and short-term indicators stakeholders group).’ ONS response – The user engagement section was not an exhaustive list of users, and the Financial and Economic Statistics User Group is one such group that ONS wishes to continue developing strong links with (as illustrated by their response to our consultation). Paragraph 26 European Regulations This section describes the approach which will be taken to address current GNI reservations, and make use of derogations and interim solutions going forward: Sigmaplus Ltd – saw the removal of existing Eurostat reservations on the UK National Accounts as one of ...’The highest priority and most welcome developments.’ Paragraph 29 GDP Improvement Project This paragraph describes the reviews of GDP methods which are currently being undertaken: BOE – ‘We strongly support the continuous improvements process. We place importance on all the reviews you mention in this context in paragraph 29 (construction survey methodology; industry reviews; methods for household expenditure; Living Costs and Food Survey; Government expenditure review; transaction reviews).’ Paragraphs 30-37 Quarterly Supply and Use balancing and annual Supply and Use balancing in constant prices
  • 6. Office for National Statistics 6 This section describes the longer term vision to balance annual GDP in constant prices and to also develop quarterly supply and use tables, as well as to reintroduce the ‘Purchases inquiry’: BoE – ‘We support the improvements you mention on Supply and Use Tables/Input Output Analytical Tables. We continue to support the long-term plan of calculating quarterly GDP growth using SUT balanced simultaneously in both current and constant prices.’ FESUG – ‘The development of Supply and Use Table is expected to improve description of the economy and improve measurement of GDP. However, it is important to put considerations over data limitations and perceived user benefit into ONS consultations – users often do not have enough information to be able to make balanced judgements over cost-benefit.’ Sigmaplus Ltd – ‘Quarterly Supply/Use tables to balance the quarterly accounts [are a lower priority development] - I am not convinced this is workable given the data limitations.’ Office for Budget Responsibility (OBR) – ‘We support the long-term aim of quarterly SUT balancing in constant and current prices as a basis of quarterly growth estimates and welcome the ONS's efforts in this area - although we appreciate the relative advantages of this over current methods would depend on the quality of the source data.’ HMT – ‘... we have supported ONS plans to calculate annual and quarterly GDP using supply use tables balanced in both current and constant prices since the idea was first raised in the context of the original modernisation programme. This change should enable a more coherent product at both aggregate and detailed levels, and set current price, deflators and constant price figures on a fully consistent basis. We are encouraged that ONS are likely to regard such an approach as “best practice”, but disappointed that the work programme sees these changes “not forthcoming before 2019”, though the other work planned ahead of this date should be helpful.‘ ONS response – ONS notes the general support for quarterly supply and use balancing but also recognises that users need more detail to judge whether this would be good value for money. Further consultations on the detailed proposals will be necessary. Paragraphs 38-39 Nominal GDP Investigations into improving the current methods for producing nominal GDP: BoE – ‘We would support an investigation into the compilation methods of nominal GDP, including the feasibility of earlier publication.’ HMT – [particularly important to HMT are]...’ the development of processes to improve the quality of nominal GDP.’ Paragraph 40 – 41 Revisions to GDP This describes improvements to revisions information and investigating the feasibility of separately indentifying revisions due to methodological changes: BOE – ‘We record the vintages of the main ONS series ourselves, so, while we think this is important, we do not attach a high priority to the publication of a real time database by ONS.
  • 7. Office for National Statistics 7 It is more important to us that ONS are able to provide an assessment of the impact that methodological revisions have had on key data series.’ Paragraphs 42 – 43 Historic Data This section looks at the expansion of the ‘core dataset’ pre-1997 as well as producing pre-1997 data alongside the implementation of ESA 2010 in 2014: BOE – ‘A long and consistent time series is important to us. The lack of data prior to 1997 in the period up to the publication of Blue Book 2013 has been a major concern. We strongly support the publication of the more detailed split of household consumption and gross fixed capital formation prior to 1997.’ OBR – ‘We remain very interested in the production of consistent historical series for investment sub-categories (business, government and residential), and consumer trends variables outside the 'core' dataset. We look forward to these becoming available through 2013 and 2014 and support the ONS' commitment to publish historic ESA10 compliant data alongside Blue Book 2014.’ HMT – [particularly important to HMT are]...’ robust systems for the preservation and uninterrupted provision of historic (pre-1997) data.’ Paragraphs 47 – 48 Flow of Funds Providing full counterparty information in the financial accounts: Sigmaplus Ltd – ‘New flow of funds accounts’ – listed under highest priority. HMT – ‘We also argue that high priority should be given to improving measures of financial flows, and specifically to improving the measurement of the financial sector.’ BOE – ‘We, particularly the Financial Stability area of the Bank, continue to attach high importance to the sector disaggregation of the Flow of Funds data.’ Paragraph 49 Other international initiatives Sigmaplus Ltd – ‘What is it about SDDS+ that ONS can not meet? It will look bad for the UK to fall behind the rest of the developed world, especially when we were the first country to sign up to the original SDDS.’ ONS Response – ONS is generally supportive of SDDS plus and our plans for flow of funds should make us ‘compliant’. The issue of when we sign up is still being considered as discussed in the work plan. Paragraph 50 Historic Sector and Financial Accounts data BOE – ‘We would support the publication of the pre-1987 Sector Financial Accounts that was available at the time of the 1997 Blue Book, but this is only a low priority for us.’ Sigmaplus Ltd – Describes historic data on the new basis prior to 1987 as being a ‘Lower priority development’.
  • 8. Office for National Statistics 8 Paragraphs 51 – 53 Balance of payments and trade Sigmaplus Ltd – ‘Monthly BOP [is a lower priority development] - although I note that this will become a legal requirement.’ Paragraphs 56 – 60 Aligning Public Sector Finances and National Accounts and Blue Book 2013 changes Sigmaplus Ltd – viewed as the highest priority ‘Reinstate consistency between the national accounts and the public sector accounts’. OBR – ‘We welcome and support the commitment to ongoing alignment of Public Sector Finance (PSF) statistics and the National Accounts. As forecasters of both the economy and public finances we are required to produce forecasts using both sets of statistics and significant inconsistencies between the two can often create a number of difficulties. We would reiterate the importance of maintaining as much consistency as possible between PSF statistics and the National Accounts- subject to respective revisions policies - which should help to avoid the very significant discrepancies that have often built up in the past.’ FESUG – ‘The increased focus on public sector finances and the reports of the OBR leads FESUG members to view the alignment of Public Sector Finances to National Accounts as an important high priority work area.’ HMT – [particularly important to HMT are]...‘the maintenance of alignment between the Public Sector Finances and National Accounts.’ Paragraphs 61-63 International Directives impacting on Public Sector Finances OBR – ‘We remain very keen to understand the implications of ESA10, particularly for the public finances.’ Paragraph 71 Accessibility and presentation of Public Sector Finances Sigmaplus Ltd – ‘Highest priority and most welcome developments in my view are: Simplification of the public sector accounts and review of the X measures of debt and deficit.’ Paragraphs 74 – 80 Regional Economic Statistics FESUG – ‘understanding regional activity is crucial for economic assessment, policy intervention and social infrastructure. Publication of a development plan for Regional Accounts would be welcomed.’ ONS response – Regional Accounts has recently completed a user consultation over our latest planned developments; to improve the measurement of residence and workplace based regional
  • 9. Office for National Statistics 9 gross value added in order to better reflect the impact of commuting between regions. By the end of September we will publish a formal response for users detailing how and when we will be taking forward these and other developments to our regional statistics. Paragraphs 83-84 Training/Capability BOE – ‘We have found the training provision on National Accounts helpful and welcome the invitations to attend specialist training courses at ONS.’ Next steps The National Accounts and related statistics work plan for 2013/14 to 2017/18 will be republished within the next week, and will be available in the publication area of the ONS website. © Crown copyright 2013

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