What is the impact of leaving the EU on scrutiny of UK economic statistics?
The UK’s departure from the EU and the European Statistical System (ESS) will end its legal requirement to comply with EU regulations on compiling main economic statistics using the European System of Accounts (ESA 2010) and their transmission to Eurostat. This will remove several functions provided by Eurostat in verifying the quality and validity of these statistics, such as the direct verification on the main statistics used to derive UK’s Gross Domestic Product (GDP) and Gross National Income (GNI). The latter was known as the fourth resource which determined each Member State’s contribution to the EU budget. Further information on the EU’s use of UK National Accounts data and the timescales for legal requirements around them ending can be found in this Blue Book chapter on Statistics for International Purposes.
How will what you do differ from what Eurostat used to do?
Eurostat assured the quality of UK economic statistics in the European context, principally to ensure that the UK’s contribution to the EU budget was accurately calculated. The uses of economic statistics in the UK context are wider. Therefore, we will be seeking to provide broader assurance on the quality and independence of economic statistics in the UK. This will include providing assurance on a wider range of statistics, such as those outside the Gross National Income boundary and those produced by producers other than the Office for National Statistics. We will also be engaging with a wide range of users within our reviews of quality, both domestic users and in the international community, to gain a broader perspective on the quality of the statistics. The reviews will consider quality in more depth than our previous programs but will not require the same level of detailed step by step GNI verification process undertaken by Eurostat. The timescales and outcomes of our reviews will also differ from those of the GNI audit. The outcome of our reviews, whether the National Statistics status of the statistics are confirmed or not and details of any requirements to retain that status will be published around six months from commencement of the review. In contrast the GNI audit process is undertaken over four-year cycles.
What are economic statistics used for in the UK?
Economic statistics are very important to both domestic users, such as the Bank of England, the Office for Budget Responsibility, HM Treasury as well as the international community, such as the Organisation of Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF), they rely heavily on GDP, GNI and the economic statistics used to estimate them.
Economic policies and how much money is spent on vital public services, such as health, education and infrastructure are often reviewed as a proportion of GDP and the UK’s support for international development is considered as a proportion of GNI, while the UK’s economic performance is often compared with that of the G7 countries. Therefore, users require reassurance that these statistics will continue to be compiled at a high quality.
How will the new framework for assessing quality work?
We recognise that economic statistics are not compiled in isolation as individual data series. They are derived within a complex and organic framework of economic variables and models, all coming together to build a comprehensive picture of the UK’s economy, starting from the goods and services produced, transformed and consumed, taking into account public sector finances and our relationship with the rest of the world and ending with the balance sheet, that shows how the transactions in our economy have affected our net worth.
We are therefore developing a new assessment model, that allows us to respond to the complexity of the economic framework that is used to compile these important economic indicators. The approach will allow us to focus our scrutiny on the elements of quality that are most relevant to each set of statistics, enabling us to dive deeper into the sources, methods and wider quality assurance than our standard assessments.
Which economic statistics are you planning on reviewing using this framework?
All economic statistics are in scope of this programme. We are developing prioritisation criteria and will be discussing priorities with stakeholders to identify the forward plan of reviews of economic statistics.
Will you use the quality framework to review statistics beyond economic statistics?
We are developing the approach with the core aim of providing assurance on the quality and independence of economic statistics. However, a secondary aim is to develop a tool that can be used wider than economic statistics where appropriate.
How does this work link with to the work of the National Statistician’s Committee for Advice on Standards for Economic Statistics?
The role of the National Statistician’s Committee for Advice on Standards for Economic Statistics (NSCASE) is to advise the National Statistician on standards for economic statistics. We will continue to engage with NSCASE in our work to develop our approach to providing assurance on the quality and independence of economic statistics.