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How to fix the ONS

The management and compilation of the UK’s vital national statistics is in disarray. There are longstanding problems with the main source of employment, unemployment and other labour market data – the Labour Force Survey – which have still not been properly sorted out.  Earlier this year, the Office for National Statistics (ONS) suspended its data on producer prices – covering both manufacturing and services activities. Other areas affected by data quality concerns are trade statistics and, most recently retail sales. The publication of retail sales data, which should be taking place tomorrow (Friday) has been pushed back by two weeks for further ‘data checking’. There was also a mention in this week’s consumer price inflation press release of a ‘minor error’ in key inflation data, though the ONS argues that this has not affected the headline figures.

While all this has been going on, the management and oversight of the ONS has also been in turmoil. Ian Diamond, the National Statistician and head of the ONS, stood down on ill health grounds in May. A highly critical review into the management and culture of the ONS was carried out earlier this year by Robert Devereux – a retired Permanent Secretary – and published in June. One of Devereux’s key findings was that new projects within the ONS had distracted attention from the day-to-day work of publishing high quality economic statistics. Devereux also revealed there had been a large exodus of senior staff from the ONS. To add to the leadership vacuum in the management of official statistics, Robert Chote, Chair of the UK Statistics Authority (UKSA) – which oversees the ONS – also resigned over the summer.

The result of all this turmoil and change is that the Government is now looking for a new Chair of the UKSA as well as a National Statistician to provide professional leadership for the ONS and Government Statistical Service. The only positive thing that has happened on the management front is that a new Permanent Secretary has been appointed at the ONS – Darren Tierney – to take over the management responsibilities previously carried out by Sir Ian Diamond.  This follows Sir Robert Devereux’s recommendation that the top job at the ONS be split between a Permanent Secretary and the National Statistician. It remains to be seen how this will work in practice though – whether it will create more management problems, or help to resolve them.

What a mess, you will be thinking, as you read this. And it is a serious problem for the conduct of government in general and economic policy in particular. If we do not have reliable, accurate and timely economic statistics, then mistakes will be made in running the economy. This has already been recognised in recent statements by the Governor of the Bank of England and the Chair of the Office for Budget Responsibility.

So what should be done to rectify the situation? First of all, the key positions of National Statistician and Chair of UKSA should be filled as soon as possible. The appointment process for the UKSA Chair is underway and at present Emma Rourke is Acting National Statistician. In both of these roles, however, we need someone with experience and deep knowledge of economic statistics – something which has been lacking for some time in the head of the ONS. If necessary, consideration should be given to recruiting from outside the UK.

Second, urgent steps should be taken to plug the deficit in senior and middle management at the ONS. That will require a combination of new appointments and secondments from elsewhere in government and the private sector. In particular, the leadership team in the ONS should seek to ensure that the key areas of the ONS dealing with economic statistics are properly staffed with managers who have the appropriate knowledge and experience.

Third, the Chancellor needs to take a personal interest in the performance of the ONS and the UK Statistical Authority – and inject more money if needed – to ensure problems are dealt with quickly and effectively. The independence of our statistical authorities from ministerial control, which is enshrined in the current structure for managing and overseeing the ONS, appears to have also led to a lack of ministerial oversight and interest – particularly when there have been many other competing priorities for government. The Chancellor has the greatest interest among all government ministers in good quality UK national statistics, and should be strengthening mechanisms for ensuring any problem areas – particularly with economic statistics – are quickly and effectively addressed.

There is no quick fix to the problems affecting the ONS and UK national statistics. But we cannot afford a continuation of the current policy of benign neglect of the management and production of key statistics, particularly when it risks having an impact on crucial measures of the economy such as GDP, employment and inflation.

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