ONS Regional Economic Forum present the current state of the UK economy and present data and analysis for your area at a local level.

1. ONS Regional Economic
Forum
24 May 2022
@ONSfocus #economicforum

2. Deputy Chief Economist
Office for National Statistics
@ONSfocus #economicforum
Welcome
Richard Heys

3. Agenda
14:00 – 14:05 Welcome and introduction – Richard Heys, ONS
14:05 – 14:20 Understanding the UK Economy – Richard Heys, ONS
14:20 – 14:40 ONS plans for subnational statistics – Abbie Davies and Emma Hickman,
ONS
14:40 – 15:00 Q&A
15:00 – 15:15 Coffee Break
15:15 – 15:35 Picture of the Scottish Economy – Sandy Stewart, Head of National
Accounts, Scottish Government
15:35 – 15:55 ESCoE – Building a Suite of Subnational Socioeconomic Indicators
for the UK: Opportunities, Challenges and Recommendations –
Sharada Davidson, Fraser of Allander Institute, University of Strathclyde
15:55 – 16:05 Q&A
16:05 – 16:15 Closing remarks – Richard Heys, ONS
@ONSfocus #economicforum

4. Deputy Chief Economist
Office for National Statistics
State of the UK Economy
May 2022
Richard Heys
@ONSfocus #economicforum

5. Economic growth slowed in February & March
Source: ONS – Monthly GDP Source: OECD and ONS first quarterly estimate
-1
0
1
2
3
Mar
2021
May
2021
Jul 2021 Sep
2021
Nov
2021
Jan 2022 Mar
2022
Services
Production
Construction
GDP
Percentage
points
Contributions to Monthly GDP, UK Q1 2022 GDP vs pre-pandemic (Q4 2019) levels
-1% 0% 1% 2% 3%
Germany
Italy
United Kingdom
France
Canada
United States

6. Business investment remains subdued
UK Gross fixed capital formation and business investment, chained volume (100= Q1 1997)

7. Goods imports higher, exports relatively flat
UK good exports, excluding precious metals
UK goods imports, excluding precious metals
£0bn
£5bn
£10bn
£15bn
£20bn
£25bn
£30bn
Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22
EU exit
deadlines
End of EU
transition period
Import data
collection
changes
£0bn
£5bn
£10bn
£15bn
£20bn
£25bn
£30bn
Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22
Coronavirus Pandemic EU Non-EU
Export data
collection
changes
End of EU
transition period
EU exit
deadlines
Source: ONS – UK Trade

8. Inflation remains well above historical averages
Source: ONS – Producer prices, Consumer prices
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
Jan-
06
Oct-
07
Jul-09 Apr-
11
Jan-
13
Oct-
14
Jul-16 Apr-
18
Jan-
20
Oct-
21
2nd Decile 9th Decile
Source: ONS – Household costs indices
-10%
-5%
0%
5%
10%
15%
20%
2010
JAN
2012
JAN
2014
JAN
2016
JAN
2018
JAN
2020
JAN
2022
JAN
CPI PPI (input)
CPI experienced by high and low income households
UK consumer and producer prices, annual change

9. Business and consumer responses to inflation
0% 10% 20% 30% 40% 50% 60%
Other
Request change to mortgage
Take up employment
Borrow money
Ask for help from family or…
Ask for a pay increase in…
Look for a higher-paid job
Work longer hours
Use existing savings
Save less each month
Household plans to fund cost of higher inflation
Businesses passing price increases onto customers
Source: ONS Business Insights & Conditions Survey Source: NMG Consulting, Bank of England survey
0% 10% 20% 30% 40% 50% 60% 70% 80%
All
Services
Construction
Production
Early March 2022 Early April 2022 Late April 2022

10. Lower business turnover, consumer confidence
-50
-40
-30
-20
-10
0
10
20
01/1985 01/1991 01/1997 01/2003 01/2009 01/2015 01/2021
Source: GfK Consumer confidence barometer
UK confidence nearing 2020 pandemic lows
Net change in business turnover expectations,
April 2022
Source: ONS Business Insights & Conditions Survey
-8% -6% -4% -2% 0%
Production Construction
Services All businesses

11. Earnings growth and industry shortages
Source: ONS Average weekly earnings, Job vacancies, Unemployed persons
Note: Growth for combined industries is weighted according to AWE employment share
A, B, D, E** Agri/Mining/Utilities
C Manufacturing
F Construction
G Wholesale & Retail
H Transport and Storage
I Accommodation and Food
J Info and comms
K, L Finance and Real Estate
M Pro Sci Tech
N Admin and Support
O Public Admin
P Education
Q Health
R, S, T** Arts, Ent/Other
[CELLRANGE]
[CELLRANGE] [CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6
Annual
growth
in
average
earnings,
3mma
Number of unemployed people per vacancy by industry
Stronger
pay pressure
Size = Employment share
Shortages more likely

12. Summing up
• Although UK GDP rose 0.8% in Q1, monthly growth has slowed
• More businesses are passing on higher costs to consumers,
while households are planning to run down their savings
• Other headwinds to growth include higher interest rates, weak
consumer confidence and sluggish business investment
• UK goods imports markedly higher, exports remain relatively flat,
• Little sign to date a tight labour market is driving earnings higher

13. ONS Plans for
Subnational Statistics
Deputy Director
Subnational Statistics and Analysis Division
Abbie Davies
Lead Analyst
Office for National Statistics
Emma Hickman
@ONSfocus #economicforum

14. Senior Subnational Data Group
Strategy and workplan

15. Senior Subnational Data Group
GSS Subnational Data Strategy (December 21)
A framework to guide the GSS in producing and
disseminating more timely, granular and harmonised
subnational statistics, that meet user needs
Referenced in the Levelling Up White Paper as a key enabler in the Government’s ambition
to improve subnational data and improve transparency and accountability to the public

16. Senior Subnational Data Group
GSS Subnational Data Strategy ambitions
Produce more timely, granular and harmonised subnational statistics
Build capability and capacity for subnational statistics and analysis
Improve the dissemination of subnational statistics
Explore Subnational Statistics service

17. Senior Subnational Data Group
ONS Subnational Workplan
ONS committed to follow up the Strategy with a workplan
Published 16 May 2022
A cross-cutting overview of the wide range of new or improved subnational
outputs and initiatives, planned for the next 18 months, across the Office
A strong commitment for UK-wide coverage, where possible, enabled by
solid collaboration with the Devolved Administrations

18. Senior Subnational Data Group
Examples of workstreams on ONS subnational workplan

19. Senior Subnational Data Group
Plans will be further developed over the next few months and will result in additional milestones
Examples of workstreams on ONS subnational workplan

20. Timely, granular
subnational statistics
and insight

21. Model-based early estimates of regional GVA
• Started publishing model-based
quarterly estimates of regional GVA
from October 2021 onwards
• Early indication of quarterly GDP,
published 5 months in advance

22. Productivity in towns and travel to work areas
• Experimental labour
productivity data for
TTWAs and towns made
available for the first time
in December 2021
• Complements existing
annual subregional
productivity release

23. Disaggregating annual subnational GVA to
lower levels of geography
• As part of the ONS strategy to provide more granular
data to our users
• Experimental statistics using granular geographies as
building blocks to derive GVA for flexible geographies
• Improve our understanding of the local economy
• Provisional publication for second version Autumn 2022

24. Coherence
• Not all levelling up metrics and evidence base are available
or coherently measured across the UK
• Challenge to understand regional disparities across the UK
• GSS Coherency programme will disseminate qualitative
research findings into what UK wide data users need and
where data gaps are
• ONS will work with departments and DAs to prioritise and
harmonise measure where relevant

25. Improved
Dissemination
25 May 2022

26. Explore Subnational Statistics
• Announced in GSS subnational data strategy
• One-stop-shop for subnational data and statistics
• Standardised geographies and user-defined areas
• Prototyped as Subnational indicators explorer – second
iteration published in May 2022

27. LUDA
• Cross Govt levelling up data collaboration
platform – develop suite of dashboards to
support decision making across Govt
• Space for shared analysis and output production
• Stores all levelling up data, including ESS data.
• Will allow Govt colleagues to respond rapidly to
queries using available data
Example of current LUDA
environment
Example of proposed
visualisations

28. ONS Local
• Commitment outlined in the white paper
• A statistical advisory service for local leaders, with
dedicated analysts based in hubs across the UK,
ensuring they have access to data, statistics and
analysis to support decision making
• Small teams of analysts based in each region, with
teams shadowing across regions to build resilience and
a central coordination team to align priorities
Senior Subnational Data Group

29. Service offer
Senior Subnational Data Group
Analytical
Teams will provide resource to scope and support analytical projects to provide statistical
insights that support decision making
Strategic
Using our unique position within central government to understand, identify, and align priorities
for both local and central decision makers, alongside capturing user needs
Data
Connecting local users to key government datasets, whilst also looking for opportunities
where local data can add value to central decision making
Network
Establishing local partnerships with a range of external stakeholders to bring together regional
expertise, share knowledge, and draw on research capability

30. Provisional Milestones
Summer/Autumn 2022: Regional roadshows to showcase offer and provide opportunity
for feedback
Winter 2022: ONS Local regional teams are established and working with partners to
establish a longer-term workplan for each region
Spring 2023: Regional workplans finalised and shared with relevant teams across
gov/ONS
Summer 2023: ONS Local teams fully operational with clear workplan. Summer
roundtable hosted by ONS as opportunity to share progress and review/evaluate the
service so far

31. Thank you for listening

32. Q&A

33. Break

34. Picture of the Scottish Economy
Sandy Stewart
Office of the Chief Economic Adviser

35. CONTENT
Office of the Chief Economic Adviser
• Picture of the Scottish Economy
• Long term trends
• Current State
• Global challenges
• COVID-19
• Brexit
• Russia/Ukraine conflict
• Inflation
• Recent developments in Scottish National Accounts
• Future developments

36. Long term trends – Scottish GDP – Jan 2007 –
Feb 2022
Office of the Chief Economic Adviser
70
75
80
85
90
95
100
105
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Notes:
(1) Monthly estimates begin in 2010. Results for 2007-2009 are an illustrative path based
on quarterly GDP.
(2) Users are advised to be mindful that the axis on this chart does not start at zero.

37. Long term trends – Scottish and UK real GVA per
capita – 1946-2021
Office of the Chief Economic Adviser

38. Long term trends – Scottish GVA by Section –
1946-2021
Office of the Chief Economic Adviser

39. Global Economic Context
Office of the Chief Economic Adviser
• The global economy is continuing to recover from the economic shock of the pandemic. In 2021 global output grew 6.1%,
rebounding robustly from the 3.1% fall in 2020, as economic activity strengthened with the easing of Covid restrictions.
• In April the IMF projected that global growth would to slow to 3.6% in 2022 and 2023 (down 0.8 and 0.2 points respectively
on the January forecast).
• Global industrial production and trade in goods also continued to strengthen into February 2022, however the economic
outlook has weakened significantly as a result of the situation in Ukraine and the significant sanctions imposed on the
Russian economy.

40. Global Inflation and Commodity Indices
Office of the Chief Economic Adviser
• Global inflation rose sharply during 2021, reflecting rising energy prices alongside disruption in global supply chains as the
economy rebalanced from the impacts of the pandemic.
• The war in Ukraine has exacerbated these inflationary pressures reflecting the importance of Ukraine and Russia in the
production and supply of a range of commodities particularly in energy (oil and gas), various agricultural products (notably
wheat) and an array of precious metals.
• The recent lockdowns in China to contain COVID outbreaks is expected to further exacerbate existing supply chain disruptions
and inflationary pressures.

41. Scotland’s economy has continued to recover at the start of 2022 with output from consumer facing services growing as
COVID restrictions have eased.
Office of the Chief Economic Adviser
• In February, Scottish output grew by 0.4% (UK: 0.0%) and GDP is now 1.3% above its pre-pandemic level in February 2020.
• Growth in February was driven by the Services (+0.7%) and Production (+0.3%) sectors while Construction output fell (-0.1%).
• Within the services sector, consumer facing services grew 2.1% in February, and is now 0.6% above pre-pandemic levels. Output
in health, education, public services fell by 1.2%, while output in all other services grew by 1.3%.
• Output in the production, construction and agriculture group fell by 0.4% during February, and is 2.1% below pre-pandemic levels.
• More recent UK GDP data indicates that the UK economy contracted by 0.1% in March. Equivalent data for Scotland will be
published on 1 June.

42. Business Trading Capacity
Office of the Chief Economic Adviser

43. Business Financial Performance
Office of the Chief Economic Adviser
• When considering turnover in March 2022, relative to February 2022, 36% of all businesses reported that turnover had
increased, 10% reported turnover had decreased and 46% reported that turnover had stayed the same.
• Looking to the month ahead, 18% of all businesses expected turnover to increase in April, while 58% expect it to stay the same,
15% expected turnover to decrease.
• Data for March showed that 53% of businesses reported that input prices increased more than normal, and 59% reported that
input prices had increased compared to the previous month.

44. Google Mobility
Office of the Chief Economic Adviser
• Google Mobility data indicates that
movement around retail and recreation
hubs is continuing to recover from the
sharp fall in January during the Omicron
wave and holiday period.
• Having fallen 30% below pre-pandemic
levels in January, movement around retail
and recreation hubs recovered to around
5% below pre-pandemic levels at 12 May.
• Looking across the economy, visits to
workplaces remain 20% below, transport
20% below and grocery and pharmacy
9% above pre-pandemic levels.
• Visits to parks in Scotland have
unsurprisingly been very seasonal with
significant increases during the Summer.
• The amount of time spent in residential
settings remains above the baseline.

45. Trade
Office of the Chief Economic Adviser
• Business survey data for April indicates trading
conditions remain challenging for businesses.
• 63% of Scottish businesses report to be
exporting as normal for the time of year while the
share reporting they are exporting less than
normal has risen to 26%, up from around 20% at
the start of the year.
• This is likely to reflect ongoing supply chain
disruptions which are expected to be
exacerbated by the situation in Ukraine and the
recent Covid lockdown restrictions in China.
• In April, 41% of exporters and 50% of importers
reported facing changes in transportation costs
(down from 48% and 57% respectively in March)
• 26% of exporters and 39% of importers reported
facing challenges with custom duties and levies
(down from 33 and 40% respectively in March).

46. How has Scotland’s trade in goods with the EU been affected by the new UK-EU trading arrangement? Synthetic Control
modelling.
Office of the Chief Economic Adviser
• Model estimates how Scottish trade
in goods (excluding oil and gas) with
the EU would have looked without EU
Exit (on Jan 1st 2021), using a
"synthetic control" – a weighted
average of similar countries which
closely track Scotland’s trade with the
EU before the implementation of the
Trade and Cooperation Agreement
• The impact on imports was
statistically significant for each
quarter in 2021, resulting in 18% to
25% lower imports in 2021 than
without EU Exit (£1.7 to £2.5 billion
lower).
• The impact on exports is only
significant for the first quarter in 2021,
resulting in 9% to 14% lower exports
in Q1 2021 (£200 to £300 million
lower).

47. Estimate of supply chain impact of lost exports to Russia using the Scottish Government Input – Output model.
Office of the Chief Economic Adviser
• Prior to 2022, Scotland exported around £300 million of
goods/year to Russia. Estimated to support Scottish GDP
by around £250 million or around 0.2%.
• Around £170 million of the impact is the direct impact on
output from reduced exports, with the remaining £80 million
a result of the indirect impacts on supply chains and from
reduced wages in the wider economy.
• Impact is small overall but more pronounced in certain
sectors.
• Manufacturing of machinery and equipment and
information services are two of the most affected industries
in Scotland, although both see their output only fall by
around 2%.
• This loss in output is likely to have an adverse impact on
employment, although it will be difficult to identify this
directly due to the wide pressures that the labour market is
currently facing. Overall, the analysis suggests that around
3,500 jobs were being supported by exports to Russia.
This is a partial measure of the overall impact.

48. Inflation
Office of the Chief Economic Adviser
• UK CPI inflation rose to 9.0% in April 2022, up from 7.0% in February and has risen to its highest rate in the historical
constructed series which began in January 1989, presenting increased cost of living challenges.
• Inflation rates have also continued to rise in the US (8.3%) and in the Eurozone (7.4%), in part reflecting rising global food and
energy prices over the past year.
• In April, UK consumer prices rose over the year across almost all goods and services monitored.
• The CPI figure in April accounts for the Ofgem energy price cap uplift which resulted in 12- month inflation rates of 53.5% for
electricity and 95.5% for gas, compared with rates of 19.2% and 28.3% respectively in the previous month.

49. Recent Developments in Scottish National
Accounts
Office of the Chief Economic Adviser
• Introduction of Monthly GDP system
• Integration of Monthly GDP system into Quarterly GDP and QNAS systems
• QNAS – 2021 Quarter 4
• Constrained to 1998-2018 Supply Use tables
• Introduction of double deflation
• Rebased to 2018=100

50. Recent Developments in Scottish National
Accounts – impact of double deflation
Office of the Chief Economic Adviser
• Large revisions at industry level, but similar to UK patterns
• Overall impact – small increase in overall growth rate.
• Scotland similar to UK overall
• More consistent with UK estimates and methods

51. Future Developments in Scottish National
Accounts
Office of the Chief Economic Adviser
• Resume Labour Productivity estimates for Scotland
• Research into Prices and data availability
• Resume GNI estimates for Scotland
• Streamlining of GDP systems and publications

52. Building a Suite of Subnational Socioeconomic Indicators
for the UK
Sharada Nia Davidson, Kevin Connolly, Ciara
Crummey, Niccolo Brazzelli, Mairi Spowage
sharada.n.davidson@strath.ac.uk
ONS Regional Economic Forum: Glasgow, 24th May
2022

53. ESCoE Projects on Regional Indicators
• Framework for Interregional Trade Data Collection and Estimation – ESCoE Technical Report 2021.
• A Framework for the Production of Supply and Use and Input Output Tables for the Four Nations –
resubmitted to ESCoE in Spring 2022 for publication
• Developing of a Suite of Subnational Socioeconomic Indicators for the UK - resubmitted to
ESCoE in Spring 2022 for publication
• Note: I will use the terms “subnational” and “regional” interchangeably through the presentation
to refer to different spatial areas including: the four UK nations, the 12 ITL1 regions (formerly
NUTS1) and smaller areas such as local authorities, constituencies and super output areas.

54. The Need for Subnational Indicators

55. Purpose of Such a Suite
1. Identification of the overarching characteristics and dynamics of a given region
2. Identification of inequalities within and between different regions of the UK
3. Assessment of the relative needs of different regions  crucial when allocating funding
4. Identification of the appropriate policy levers and reforms required to reduce inequalities
5. Evaluation of the efficacy of policies implemented and their impact on socioeconomic outcomes

56. Report Objectives and Scope
• Complements GSS subnational data
strategy with similar target audience:
producers and users of subnational
statistics
• Rather than focussing on categories of
indicators (health, housing, education
etc.), considers the challenges
associated with building profiles of local
areas across the four nations
• Hundreds of indicators which could be
considered…objective is not to pin down
exactly which to include
• Adopt a four nation perspective and provide a series
of recommendations:
1. How Timely Should the Indicators Be?
2. Which Levels of Geographical Granularity Are
Required?
3. Do the Indicators Need to be Comparable Across
the Four Nations?
4. Which Indicators Should be Included in the Suite?
5. How Can Measurement Issues, Comparability
Issues and Data Gaps be Minimised?
6. How Should the Data be Disseminated?

57. How Timely Should the Indicators Be?

58. Indicator Timeliness
• Recent academic and policy literature emphasises need for high-frequency indicators
• Partly driven by the UK’s withdrawal from the EU and pandemic
• But timeliness of the indicators should be aligned with the purpose of the suite…
• …And there is a trade-off between timeliness and granularity, given sample sizes required
• When examining socioeconomic outcomes/structural issues, low frequency data is fit for purpose
• Recommend baseline frequency of suite is annual – suitable for skills, education, health, poverty etc.
• Subset of indicators should be available at quarterly or monthly frequency – cost of living, labour
market, claimant count

59. Which Levels of Geographical Granularity Are Required?

60. UK Geographies and Users’ Needs
• To examine socioeconomic statistics need to focus on small area geographies (< ITL3 formerly NUTS3)
• Devolved administrations: support policymaking in their respective nation
• Subnational indicators designed to reflect specificity of their nation and support devolved policymaking
• Indicators designed to align with their unique administrative geographies
• UK government departments including ONS: support policymaking across the UK
• Greater emphasis is placed on the comparability of data across the four nations
• Assess the relative needs of different areas of the UK - crucial for allocation of LUF and CRF
• Loss of specificity
• Reconciling these two different sets of needs is key

61. UK Geographies and Users’ Needs

62. UK Geographies and Users’ Needs
• We recommend that the baseline granularity for the suite of indicators is at the Local Authority (LA)
level for Scotland, Wales and England and at the Local Government District (LGD) level for Northern
Ireland
• Northern Irish case - we also recommend that issues around the construction of historical time series
are investigated since in 2015 the LGDs were reduced from 26 to 11.
• While LAs may provide a useful starting point, there can still be considerable variation in
socioeconomic outcomes, for example, poverty and health  all indicators should also be available at a
lower geographical level which is still relevant within a devolved context  “building block” approach
may provide a way forward

63. Do the Indicators Need to be Comparable Across
the Four Nations?

64. Do Indicators Need to be Comparable?
• Recommend suite includes a subset of indicators which are comparable across four nations.
• The remaining indicators should be equivalent (i.e. attempt to capture the same characteristic) but not
necessarily comparable.
• Where an indicator is included for England, the same indicator should only be omitted for the devolved
nations under exceptional circumstances.
• Should be cautious in terms of terminology: may be drawn into labelling indicators which are
comparable as “headline” indicators while noncomparable indicators are “supporting” indicators
• However, in this case, “headline” indicators may not be the “best” or most representative of a specific
characteristic

65. Which Indicators Should be Included in the Suite?

66. Towards a Socioeconomic Suite
We considered:
• Key Economic Indicators
• Labour Markets
• Skills, Education and Social Mobility
• Income and Poverty
• Housing
• Health
• Demography and Rurality
• Other Indicators

67. • Economic Activity
• Small area GVA and productivity (GVA per job filled) estimates now produced by ONS
• LSOA data used as building block to derive bigger geographical areas
• Comparisons can still be tricky…LSOA and MSOA should not be directly compared; GVA per head
inappropriate way to compare areas with high net in- or out-commuting
• Inflation - area of ongoing development but sample sizes are a major barrier
• Trade - very important from an economic perspective (see Davidson and Spowage, 2021) but less
critical in a socioeconomic suite and not required at the same level of granularity
• All other indicators considered from a socioeconomic perspective
Key Economic Indicators

68. Labour Markets
• Labour supply
• Employment, unemployment, economic inactivity, employment by occupation, payrolled employees
• Labour Demand and Business demographics
• Employee jobs by industry, job vacancies
• Enterprises births/deaths, no. of active enterprises, enterprise survival rates, high growth
enterprises, business count
• Skills Mismatch, Shortage or Gaps
• Overqualification, skills shortage vacancies, skills gap by occupation

69. Labour Markets – Future Development
• Many labour market statistics are published at a local level and could be included directly into the suite
• Some require further development
• Skills mismatch, shortages or gaps - some data does exists but needs to adapted to be included in
suite of indicators
• Business Demography by Region and SIC - Current business demography indicators based on the
IDBR, are published at either a regional or SIC 2007 level, but not both

70. Skills, Education and Social Mobility
• Each nation has its own distinct education policy and system  obtaining education indicators that are
comparable or even similar across the four nations is highly challenging
• Skills: NVQ4+, No qualifications
• Social Mobility Commission (2017) builds social mobility index for by considering the following:
• Early years: Nursery quality, early years attainment
• School: Primary school quality and attainment, secondary school quality and attainment
• Youth: Positive destinations after KS4, average A level or equivalent points score, A-levels or
equivalent by 19
• Levelling Up White Paper also emphasises the importance of capturing different stages of education
• Important decision on whether to focus on the entire population or only children and youth from
disadvantaged backgrounds

71. Education – Future Development
• School inspection reports as well as other individual school level data provide a rich opportunity to
develop detailed datasets on education in local areas
• This will require considerable collaboration between the ONS and Devolved Administrations (DAs)
• Augmenting this data with proxies of disadvantage will facilitate analysis of social mobility –
traditionally free school meal eligibility has been used to do this but differences across the four nations
would likely make comparisons infeasible

72. Income and Poverty
• Key to ‘levelling up’ and social policy are indicators that reflect earnings, income, benefits and poverty
• Annual Survey of Hours and Earnings: earnings data at low geographical level
• HMRC Pay as you Earn Real Time Indicators: of high frequency data on employees and pay
• Data on claimant count and spending on debit and credit cards captures short-term trends during crises
• Income: Gross disposable household Income, Annual household income
• Earnings: Average weekly earnings, Earning by place of residence/work and gender, pay
• Out of work benefits: Claimants by demographic
• Poverty: Absolute and relative child poverty, fuel poverty, food security, absolute and relative poverty
of working-age adults and pensioners, percentage of households in poverty  most uneven coverage
in terms of regularity and granularity

73. Poverty – Future Development
• Most poverty indicators at ITL1 level with child poverty most developed
• Income-based measures of poverty for smaller geographical areas is problematic due to small size of
family resource survey
• Could be supplemented with other data such as the Households below average income (HBAI) statistics.
Although this is not publicly available lower than ITL1 geography
• Other poverty indicators needed:
• In work poverty – Low pay and zero-hour contracts motivate the need for an indicator to determine
how this impacts poverty
• Fuel Poverty – data available for English constituencies but different definitions across nations of UK
• Food security – recently introduced but higher granularity is needed as only available at ITL1
• Household type in poverty – Needed for targeted approach to combat poverty

74. Early Warning Indicators
• UK has gone through major structural changes over the past years which have negatively impacted the
economy
• Some regions have seen larger effects than other
• Advantageous to include early warning indicators linked to a region's preparedness for future events
• Climate change risk – Foremost issue that will negatively impact the UK economy over the next
generation. Extreme weather events more likely
• Indicator would account for regions geography, topography, available emergency services,
transports, among other factors
• Future epidemic risk - Possibility of future pandemics and epidemics. Subnational suite should
include indicator for preparedness and account for the different types of jobs in a region
• Resilience – business demography, average earnings and income, labour market, skills

75. Composite Indicators
• In addition to individual indicator, subnational suite could include composite indicators
• Composite indicators
• Composite indices of economic activity are regularly produced using dynamic factor models (DFMs).
• DFMs summarise information from several variables into one index using data-based weights
• DFMs could also be used to produce annual indices of economic activity, performance and
prioritisation for small areas across the UK
• Similarity index
• Key component of any subnational suite of indicators would be to include a comparison index
between areas
• UK index of multiple deprivation

76. How Can Measurement Issues, Comparability
Issues and Data Gaps be Minimised?

77. Key Challenges in Measurement
• A range of household surveys across the four nations are used to collect economic data
• For business surveys, businesses are sampled from the interdepartmental business register (IDBR).
• Business data is collected from Great Britain or Northern Ireland Reporting Units (RUs).
• Can apportion activity to Local Units (LUs) to obtain, say, “Welsh” exports using an indicator variable
e.g. employment shares.
• LUs may also have different industrial
classification to RUs.
• Could instead ask GB RUs to provide information
on the activity of their English, Welsh and Scottish
LUs as in Scotland’s Global Connections Survey
and Wales’ Trade Survey for Wales.
• Sample sizes are often a key barrier to producing subnational statistics

78. Key Challenges in Comparability
• When comparing data across the four nations a comparability challenges can arise from:
• Different definitions of key concepts e.g. fuel poverty, rurality
• Different policy focus e.g. early years attainment vs early years attainment among the disadvantaged
• Devolution of specific policy areas leading to different systems e.g. education, housing, health
• Different data collection strategies e.g. UK wide survey vs devolved surveys

79. Minimising Measurement Issues
• Issues relating to apportionment warrant further investigation. In some cases:
• May be advantageous to ask GB RUs to report on the activity of their regional LUs.
• May also be advantageous to classify RU according to dominant activity across regional LUs.
• Issues around sample sizes can be minimised if ONS and DAs collaboratively identify:
• Areas in which a sample boost would be mutually beneficial
• When surveys deployed by the ONS and DAs can be harmonised (or include a subset of
harmonised questions)
• Identify areas in which small area estimation methods can be used
• Where definitions or the policy focus differs across the four nations, can break down characteristics
and seek to capture constituent parts e.g. rather than using a proxy for rurality collect data on: (i)
population density and (ii) transport connectivity

80. Minimising Key Regional Data Gaps
1. Consumer prices  sample sizes pose a considerable challenge but a boost is planned for NI
2. Working-age adults and pensioners in poverty  not produced for small areas, small area estimation?
3. Skills shortages and mismatch  some statistics produced by the four nations but requires
standardisation
4. Educational quality, attainment and positive destinations  data is available at the individual school
level but considerable collaboration required with the devolved administrations
5. Transport connectivity  uneven coverage across the UK
6. Business demography by industry  data available by region, a breakdown by region and industry
would provide valuable information on labour demand
Data used to capture different dimensions of indices of multiple deprivation across the four nations should
also be explored.

81. How Should the Data be Disseminated?

82. Dissemination
• Majority of subnational statistics are published
according to category (e.g. housing, health, labour market)
rather than geographical area.
• Exception is NOMIS which provides labour market
statistics for area profiles and NINIS which provides NI
neighbourhood data
• We recommend that this service is publicised more widely
and that extensions to the service are considered:
• Statistics on small areas in NI.
• Statistics on devolved constituencies.
• Ultimately, NOMIS (or the explore subnational statistics service) could provide area profiles on a wide
range of indicators.
• Should consider how to guide users so that comparisons across areas are only made where appropriate.

83. Summary
1. How Timely Should the Indicators Be?
• Annual with a subset at a higher frequency
2. Which Levels of Geographical Granularity Are Required?
• Local authority and local government district BUT this can mask considerable variation in large local authorities
• Lower level geographies which are meaningful in a devolved context should also be considered
3. Which Indicators Should be Included in the Suite?
• Economic, Labour Market, Education and Social Mobility, Income and Poverty, Housing, Health, Demography
and Rurality
4. Do the Indicators Need to be Comparable Across the Four Nations?
• A subset should be comparable with others equivalent
• Exert caution when referring to comparable “headline” and remaining “supporting” indicators

84. Summary
5. How Can Measurement Issues, Comparability Issues and Data Gaps be Minimised?
• Issues around apportionment and disaggregation need to be considered
• Identify areas in which the ONS and DAs can collaborate to boost and harmonise surveys
• Capture constituent parts where definitions differ
• Key data gaps: CPI; skills mismatch; education; poverty; transport connectivity; business demography
6. How Should the Data be Disseminated?
• NOMIS illustrates the usefulness of local area profiles
• Should guide users to make valid comparisons

85. Thank you for listening
Happy to take questions.
We anticipate the full report will be published soon in the ESCoE Discussion Paper Series.
Email - sharada.n.davidson@strath.ac.uk

86. Q&A

87. Deputy Chief Economist
Office for National Statistics
Closing remarks
Richard Heys
@ONSfocus #economicforum

88. Forthcoming ONS economic analysis
24 May 2022 – GDP and events in history: how the COVID-19 pandemic shocked the UK
economy
26 May 2022 – Long-term international migration, provisional: year ending June 2021
27 May 2022 – Health benefits of recreation, natural capital, UK: 2022
30 May 2022 – Youth unemployment by socioeconomic background, UK: 2014 to 2021
31 May 2022 – Quarterly regional labour productivity, gross value added, hours and jobs
10 June 2022 – The cost of living, current and upcoming work: June 2022
All information on upcoming analysis can be found via the ONS website
@ONSfocus #economicforum

89. ONS Consultations
ONS open participation activities: Research and Development (R&D)
survey
The ONS run a suite of Research and Development (R&D) surveys. Each of these annual
surveys are used to measure R&D activity in the UK. Outputs from each are combined with
administrative data that measures R&D activity for the higher education sector to compile the
ONS’ Gross Domestic Expenditure on R&D release. Headline statistics from this release are
used to measure progress towards government set targets linked to R&D.
We want to ensure that our data meets the needs of the people who use it. To achieve this,
we are conducting a review of our applied methodology, exploring alternative data sources
and reviewing our R&D questionnaires.
Please support to this important work by responding here. The survey is live until 2 June
2022.
@ONSfocus #economicforum

90. ONS User Survey
ONS open participation activities: Labour Market Statistics User
Engagement
The ONS is undertaking an ambitious transformation programme to improve labour market
statistics through survey transformation and increased use of data from administrative and
other sources. The main survey that provides labour market information from an individual
and household perspective is the Labour Force Survey (LFS). With recent developments,
including the addition of the ability to respond by telephone, the ONS is now in a position to
begin moving towards incorporating the transformed LFS data into the regular labour market
data releases.
Please support to this important work by responding here. The survey is live until
29 June 2022
More information, including on how to respond, can be found on our consultation and
stakeholder participation hub: https://consultations.ons.gov.uk
@ONSfocus #economicforum

91. ONS Subnational Workplan
Launched 16 May in response to the GSS subnational data strategy
New or improved subnational outputs and initiatives planned over
the next 18 months
Workstreams covering a wide range of themes, from the economy to
population, migration and Census
With a focus on UK-wide coverage, where possible, enabled by solid
collaboration with the Devolved Administrations
@ONSfocus #economicforum

92. Dates for your diary
25-27 May 2022 – ESCoE Conference on Economic Measurement – University of
Strathclyde, Glasgow
15 June 2022 – Economic Data Science Seminar Series - Alexandre Judes
20 June 2022 – ONS Economic Forum
Further details on the above events will be published at ons.gov.uk/economicevents
@ONSfocus #economicforum

93. Thank you for attending the
Economic Forum
You can keep up to date on all up coming events via
ons.gov.uk/economicevents
If you would like to ask a question or provide any feedback, please do so
via economic.engagement@ons.gov.uk