This guidance considers statements about public funding and has two aims:
- To support and aid understanding for those reading public funding announcements as to what to look out for so they are not misled.
- To encourage those producing or supporting statements to ensure any statements are clear and can be understood by all.
This guidance builds on a blog published by Mary Gregory, our Deputy Director for Regulation, in November 2019 on what to look out for in statements about public funding. It highlights the key areas of concern that have been raised with us previously.
It is hoped this guidance will encourage people to consider the trustworthiness, quality and value in public funding statements to support their understanding of what funding statements are being made.
The following information can be used as checklist of considerations for anyone reading public funding announcements, as well as an additional checklist of considerations for analytical teams supporting public funding announcements. (Click each heading for additional information.) These checklists should be considered alongside the Code of Practice for Statistics.
Top 5 considerations when viewing public funding announcements:
It is not always straightforward to include all of the necessary detail in public funding announcements. This is particularly the case in informal interviews, where the questions are not pre-prepared, and social media posts. It is vital for transparency, however, that statements are sourced clearly and can point to any supporting information which details how the figures have been determined and any assumptions that underpin them. Whilst in some cases statistics producers may wish to provide technical background for expert users, it is helpful when a summary of the methods used can be provided in plain English for all users.
Statements should be clear and transparent as to whether a public service or organisation is receiving new money that it did not have access to previously (in any capacity) or whether the money has been reallocated from existing resources (e.g. through reprioritising spending or removing barriers to spending). Where increases in funding include amounts that have already been announced, this should be made clear in the statement and should be reflected in any supporting statements about the future trend of the funding commitment.
The complexity of government funding structures can lead to confusion when money is reallocated from both central and local funding sources. This is particularly the case when components of a budget are set to increase by more than the relative increase in the overall budget. Statements should clearly present who has responsibility for the funding in question and specify where any additional funding is sourced from. If money is allocated from the central government’s budget but localised public services have the discretion to manage their budgets, this should be made clear in any supporting information.
The figures referenced in the statement are provided with appropriate context which includes (but is not limited to): changes to the target population, changes to the remit of the service/organisation or governance of funding arrangements which may present barriers to spending. The statement or supporting material provides information on the funding structures in place that are relevant to the announcement.
It is possible for overall funding to increase but the money seen by individuals receiving the service to fall. This may be a result of the target population size increasing (e.g. more pupils in schools or more patients in emergency services) or a change to the remit of the service receiving the funding and therefore the money is stretched more thinly across more services or more people. Public funding statements should provide context as to whether additional funding or reallocation of funding translates into a real increase for individuals who are receiving the service or whether the funding is expected to cover a wider remit for a service.
It is important to know whether a public funding announcement takes account of inflation. Statements made in cash terms (i.e. nominal terms) will reflect a change in funding based on the prices as at the time periods referenced. This will tend to show a greater change in funding than statements made in real terms (i.e. constant prices) which account for inflation and therefore account for the change in prices over time.
It is generally more helpful to make public funding statements in real terms to understand the impact on funding levels felt by public services on the ground. Some key terms you may want to familiarise yourself with are:
- Real terms increase – where inflation adjusted funding is increasing
- Real terms protection – where funding is stable once inflation is taken into account
- Cash freeze/cash protection – where budgets are stable in terms of actual numbers but which represent a reduction once inflation is taken into account
It may also be worth checking which deflator (the value used to transform a figure from cash terms into real terms) has been used for statements presented in real terms. For public funding announcements in the Budget, this will likely be the GDP deflator as it is used for consistency across broad areas of government spending. However, there may be times in other public funding announcements when this isn’t the case and an alternative is used which better reflects the changing costs for specific sectors or services.
It is normal for funding announcements to refer to previous years as they are often committing to increasing or decreasing spending from a previous level in time. It is therefore important to understand what the baseline comparator is and whether it is an appropriate comparator to use (e.g. is it year-on-year comparison or the change of funding since the last Budget announcement). The choice of baseline can change the sentiment of the statement and you should consider whether there has been any selectivity of data points to present a more positive announcement.
It may be useful to consider the following context when looking at the choice of baseline:
- Was the baseline period during austerity? Were there any other funding restrictions in place at this time?
- Was the same political party in power at the time of the baseline period?
- Were any funding arrangements devolved at the time which are not any more or vice versa?
Public funding statements should not select a baseline comparator which masks a longer-term trend. Comparisons should be consistent where possible to avoid selectivity of data points which could be liable to mislead.
It is common for public funding announcements to reflect spending for a number of years cumulatively, despite commitments being made on an annual basis. Whilst a cumulative figure can provide helpful context for the overall investment into a public service, it can lead to confusion as to how much of an increase will be seen in the interim periods covered by the overall allocation.
Statements should be clear and transparent as to whether cumulative increases will be distributed equally over the years which the period covers or whether the changes to funding are variable year on year over this time period. When referring to annual spending, statements should use the appropriate wording to distinguish between funding commitments “per year” and “every year” to avoid implying that the increase will happen every year if the commitment is not ongoing.
It is also helpful to understand whether any commitment is ongoing or relates only to a specific time period. There are instances where cumulative funding announcements make more sense than referring to ongoing investment in a service, for example capital projects such as building of new transport links or roads, as these projects will relate to a large level of funding over a number of years.
Top 3 additional considerations for analytical teams involved with supporting announcements:
Previous queries raised to OSR from the public have highlighted issues with coherence of data sources between government departments for statements on public funding. Where there are noticeable discrepancies in expenditure figures between departments, this can reduce public confidence and trust in these statistics. We encourage public funding commitments to be based on the best available data and any related statements should be clear in the supporting material as to why the data source used is the most appropriate.
The figures used in the statement are clearly labelled as being in cash terms or real terms and the supporting information explains which deflator has been used for real terms figures. The language used in the statement is clear on the level of uncertainty associated with future funding commitments.
Public funding announcements often refer to “record highs” or “record levels”. Taking the earlier points into account, you should consider whether the language used in public funding statements can be supported by the statistics or whether selectivity of data has changed the sentiment of the statement. Language should also be used effectively to present the level of uncertainty associated with the statement – particularly if funding allocation is directly linked to changes in the size and demographics of a target group which may change over time.
What concerns have OSR dealt with to date on public funding announcements?
OSR have published a number of letters in correspondence to public queries around public funding announcements or statements by government departments over the last two years. The concerns raised in these queries can largely be grouped under five headings:
- Complexity of funding structures and arrangements
- Use of cash terms versus real terms.
- Lack of context and use of other relevant statistics to complete the picture.
- Selectivity of data. Inappropriate or inconsistent choice of comparisons being made.
- Visual presentation of public funding announcements – particularly on social media.
Why is it important to be clear in public funding statements? What should people expect from those making or contributing to these statements?
Understanding the way public services are funded is essential in informing public debate about the use of taxpayers’ money and can influence the way people view the government of the day. It is important that statements on public funding are clear and not open to misinterpretation so that fair and transparent public debate can be facilitated.
In the context of this guidance, we are considering public funding statements to reflect any claim made by the government and its departments about the allocation of either new funding, changes to existing funding or claims about the levels of funding as compared to historic time periods. This can take many forms including published government statements, articles, Prime Minister’s Questions, interviews or even social media posts.
We recognise that it can be difficult to include all of the necessary detail within some methods of communication. We also acknowledge that the level of detail will differ somewhat between initial funding announcements and more detailed worked through proposals where the full supporting analysis is available and can be referred to. However, we would expect that any information needed to clarify the statement is readily available in the public domain as soon as possible after the announcement and that it provides the relevant context for the figures in a way which can be easily understood. This information should be accessible, presenting a clear source for the statement that sets out the funding arrangement in an unambiguous way.
We anticipate that people may wish to understand how funding has changed over time and where relevant, how this compares to other countries in the United Kingdom or internationally. Any comparisons made in the statements themselves or supporting information should be appropriate and justified. This means avoiding selectivity of data points or metrics and ensuring any context which could impact the suitability of comparisons (e.g. changes to policy or funding arrangements within the time period) are made clear.
Who else can I look to for guidance on understanding public funding announcements?
There are a number of fact checking organisations which tend to investigate public funding statements made by the government. These include Full Fact, BBC Reality Check, Channel 4 Fact Check, FactCheckNI and The Ferret. These organisations often produce helpful summaries of the data and information which supports the statements being made and help clarify any elements which may be open to misinterpretation.
As well as fact checking organisations, it is also worth keeping an eye out for think tank summaries of statements on public funding. Organisations such as the Institute for Government and the Institute for Fiscal Studies provide independent analysis and commentary on public funding announcements – particularly for the Budget.
Transparency and clarity are the key elements in avoiding the risk of misinterpretation or misleadingness in public funding statements. We encourage people to challenge and question the basis of statements and hope that those making the statements are proactive in pointing to readily available material to support understanding of the announcements being made. In doing this, it is hoped that transparent and fair public debate can be facilitated on the issues that matter as opposed to the validity of the data in question.