Detailed findings - relevance to users

Introduction

A household expenditure survey has been conducted each year in the UK since 1957, with the LCF being the approach since 2008. The LCF is the most significant survey of household spending in the UK and provides essential information for key social and economic measures, including Gross Domestic Product and price indices such as the Retail Price Index (RPI). LCF data feed into a number of Office for National Statistics’ (ONS) statistics on household income and expenditure and the main results from LCF are published in the annual report Family Spending in the UK. The Family Spending statistics are widely used by other government departments, local authorities, financial institutions, academia and the media. These users are often interested in using the data to analyse how spending behaviours vary for different levels of household income, as well as understanding how spending behaviours for different groups have changed over time. As well as information on income and expenditure, the LCF data are used by the Department for Environment, Food and Rural Affairs (DEFRA) in producing its statistics on food consumption.

A vital and unique source of information on spending behaviour

We found that the LCF is highly valued by users and is seen as unique in bringing together spending habits with information on the households who are doing the spending. This relationship is something that alternative sources of information on expenditure do not tend to capture, as administrative sources of income data do not contain the same detail of information on household characteristics. Users told us that they do not see an alternative to a survey-based approach in the short term as this relationship with household characteristics is more valuable than the expenditure data alone. We also heard from some users that LCF data are valuable in supporting distributional analysis – the process by which the effect that a policy programme or funding decision may have on individual groups within society is measured.

The nature and aims of household expenditure surveys have changed over time and some users raised concerns that the LCF may be trying to do too much in its current form and therefore is being used for some purposes for which it was not intended. Similarly, ONS needs to work with users to understand the ways in which the use of LCF data is being stretched beyond its purpose. Some users told us that the LCF is limited by its coverage of only private households and other users felt there would be value in reviewing whether the goods and services included in the LCF reflect spending in today’s economy.

The production of the LCF is supported by a steering group made up of statistical teams in ONS and other government departments who use LCF data, as well as external research agencies such as the Institute for Fiscal Studies and the Resolution Foundation. This group normally meets twice a year and is updated on the latest issues and developments concerning the LCF. While this group is designed to inform the developments of the LCF, we heard from the LCF statistics team that the group tends to be a forum for listening rather than for steering. Similarly, while ONS teams who use LCF data are invited, they do not always attend. The LCF team would like to enhance its engagement with internal and external users to ensure developments best meet user needs. ONS should enhance its understanding of the value of the statistics by improving its engagement with users, within and outside ONS, to capture a wide range of views and use these to drive its priorities for development. ONS should reflect on the Government Statistical Service’s User Engagement Strategy for Statistics and determine the best methods for engaging with users