Executive Summary
What we found
ES.1 The classification of economic units or transactions arising from policy initiatives is important because of the impacts these decisions can have on deficit and debt figures. These in turn have implications for fiscal rules that can affect government spending decisions and the day-to-day management of public money. The direct users of these decisions are not only those who monitor fiscal rules and government spending but also, because of the integrated nature of classifications decisions, compilers of the UK National Accounts, public sector finance statistics and public sector employment statistics that are also affected by a decision. Classification decisions also have non-statistical practical implications, such as compliance with public sector pay controls or Managing Public Money requirements. Thus, bodies subject to classification, and their sponsor departments, can be significantly impacted by classification decisions.
ES.2 Overall, we found a classification process that operates well to make complex and technical decisions in a way that is robust and independent from any outside influence. The process has seen external change over the last few years with the UK’s departure from the EU, and economic events prompting novel policy responses for the committee to consider. The committee’s processes have been robust to these changes. Through our review, we have identified six requirements for ONS to undertake to enhance assurance.
ES.3 So that good-quality decisions continue to be made consistently, ONS should ensure that there is sufficient capability in the ONS Economic Statistics Classification Committee (which makes the recommendations on classification cases) and the ONS Economic Statistics Classifications Team (which engages with users and acts as the Secretariat for the Classification Committee). Capability considerations should include an enhanced focus on succession planning, talent pipelines and staff retention. ONS should also review the arrangements it has internationally, so that the UK can be involved in conversations about international standards. Finally, ONS should review its arrangements for receiving advice on complex cases.
ES.4 It is especially important that the Classifications Team effectively communicate its decisions to key stakeholders and to the wider public. The team has made good progress in this area in recent years, especially in communicating with key stakeholders. However, ONS should ensure that improvements continue alongside its user engagement and the published outputs of its work so that decisions are more accessible to all users. Finally, although classification decisions are usually implemented into the relevant statistics in a timely manner, there are sometimes lags. These lags are even longer for cases that are especially complex to implement. Although the classification decision should not consider implementation, ONS should give more consideration to implementation in the Classifications Team’s communication with users to keep them informed of how implementation is progressing.
List of Requirements
ES.5 We have identified six requirements that ONS must meet to maintain the quality of the classifications decision-making process. These focus on the Quality pillar but also touch on the Trustworthiness and Value pillars of the Code of Practice for Statistics.
Requirement 1:
In order to ensure that capability in classifications is sustainable, ONS should develop and implement a plan covering succession planning, talent pipeline and retention of staff members who have accumulated critical substantive expertise in classifications.
Requirement 2:
To ensure that the Classifications Team has an in-depth understanding of new standards and access to the work of peers working on comparable classification cases, to better inform its work, ONS should effectively develop and enhance the use of its international relationships. These arrangements should be clearly communicated to stakeholders.
Requirement 3:
To ensure that the quality of decision-making remains continuously high, ONS should strengthen its arrangements for accessing technical expertise to provide independent advice on complex, precedent-setting or highly specialised classification decisions. These arrangements should be clearly communicated to stakeholders.
Requirement 4:
To continue improving the understanding and transparency of its classification decisions, ONS should enhance its communication approach. Efforts here should include:
- improvements to engagement, for example with the OBR and with affected non-ONS statistics producers
- better integration of the monthly release, the Public Sector Classification Guide (PSCG) and the Forward Work Plan (FWP), in the form of improved sign posting, harmonisation of consistent messaging and making the latest month’s decisions easier to find in the PSCG
- expanding the regularity of technical articles and compendium articles
- investigating the use of more-innovative methods of disseminating information
- renaming the PSCG to better reflect its purpose and use
Requirement 5:
To ensure that users have a better knowledge of progress around implementation, ONS should communicate more openly about how the implementation of the suite of classification decisions is progressing, including, for example, in the monthly classification outputs.
Requirement 6:
ONS should assess implementation at an earlier stage in the classifications process; this work should be done independently of the Classification Committee. Also, to ensure that the implementation of classification decisions better meets user needs, ONS should speed up implementation, within the constraints of wider prioritisation.
ES.6 Following the publication of this review into the classifications process, OSR will ask ONS to publish a plan for how it will implement the requirements set out in this report by October 2024.
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