The Office for National Statistics must take “decisive action to restore confidence” in the economic data it publishes, the UK’s stats regulator has said.
The ONS should publish a “fully resourced plan” to recover its social-survey operation and reduce risk in its business survey operation within the next four weeks, the Office for Statistics Regulation said.
The plan should “set out the risks that continued data-quality challenges pose to economic statistics”, the UK Statistics Authority’s regulatory arm said in an interim report arising from its systemic review of economic statistics, which began last summer.
The report comes days after former permanent secretary Sir Robert Devereux was commissioned to conduct an independent review of the ONS’s performance and culture.
The OSR found stakeholders had “expressed widespread concern” about the quality of ONS survey data – in particular, but not limited to, the Labour Force Survey, which has seen response rates plummet over the last few years. Its report also highlights concerns about the “quality and representativeness” of business surveys, despite response rates staying higher.
The interim report also highlights a need for cultural change at the ONS, saying staff have said early warning of emerging problems “has not always been welcomed”.
The plan is one of four steps mandated by the watchdog. The report also says that within the next three months, the ONS must develop a “clearer strategic articulation of the purpose and priorities for economic statistics”; develop and publish a regularly updated vision and strategy for the data sources used to compile its economic stats; and take a more strategic and systematic approach to quality reviews of its data sources.
The recovery plan should make a “credible case for increased resources”, the report says, noting that the ONS has struggled to maintain real-terms funding for core economic statistics and supporting data sources “in the context of growing demands and a changing environment, including the Covid pandemic.
“Moreover, resource pressures on economic statistics and on the ONS as a whole have intensified in the last two years,” the report adds.
The report stresses that “insufficient investment” is a principle reason for data-quality issues that have emerged in recent years, pointing to a fall in staff and budgets for data collection.
The OSR found budgeting challenges have been “exacerbated” by the Treasury’s decision to ringfence some of its funding for specific purposes. “Moreover, resource pressures on economic statistics and on the ONS as a whole have intensified in the last two years,” the report adds, which has “reduced ONS’s flexibility to respond to new demands and challenges”. These ringfences were relaxed on 1 April.
“Greater transparency over the prioritisation challenges that ONS faces, the efficiencies it has achieved, and the trade-offs it has to make, would both explain the situation to stakeholders and build a credible case for increased resources,” the report says.
Once the plan is in place, progress against it should be regularly monitored by the UK Statistics Authority Board and made public, “given the impact of these challenges on confidence in the statistics system”, the report says.
Looking beyond the recovery plan, the report says “greater strategic clarity of purpose and transparency on prioritisation” would help to restore confidence in the ONS’s work.
It says there has been a “lack of transparency about what ONS regards as its core purpose for economic statistics” and that ONS staff and stakeholders have expressed concern about the effectiveness of its decision-making in allocating resources.
For example, it says stakeholder confidence could be improved if the ONS “more clearly communicated” its recent decision to prioritise funding for economic statistics through an overall strategy for delivering economic statistics.
“In short, a more engaged and transparent process would assist users of all ONS’s statistics in understanding the trade-offs ONS faces and how it has addressed them,” it adds.
The decision to reduce some outputs to focus on the ONS’s core priorities for economic statistics was set out in its most recent business plan, published last week. Writing in the foreword to the business plan, national statistician Sir Ian Diamond said “difficult decisions” would be needed “given the tight financial and human resources backdrop and the need to prioritise our most critical statistics”.
In a letter to Diamond, OSR director general Ed Humpherson said the four requirements set out in the report “provide an opportunity for ONS to show that it is addressing stakeholder concerns”.
“The overall aim of the report is to offer constructive requirements to help ONS address the stakeholder concerns and the risk of a growing loss of confidence,” he said.
An ONS spokesperson said: “We recognise and share concerns about data quality and are addressing these as a matter of urgency. Our new strategic business plan includes a renewed focusing of resources on our core economic and population statistics.”