Executive Summary

What we found

ES.1 ONS is highly regarded by users for producing Business Investment statistics as a standalone measure rather than just as a component of Gross Fixed Capital Formation, as is the case with most other national statistical institutes. Users also appreciate the quarterly frequency at which the statistics are released.

ES.2 The primary source of data for Business Investment statistics is the Quarterly Acquisitions and Disposals of Capital Assets Survey (QCAS), which accounts for roughly 80% of the estimate. However, QCAS does not sample small businesses (those with between 0 and 19 employees), instead accounting for these businesses through weighting and benchmarking. ONS needs to conduct analysis to understand the impact of not sampling these businesses on the quality of estimates. If the analysis demonstrates an impact on quality, ONS should take action to reduce error and communicate the findings of this analysis to users.

ES.3 While users recognised that some revision is unavoidable, they also raised concerns around the magnitude of revisions to Business Investment statistics. Revisions to Business Investment statistics grew substantially in 2020, in relation to the COVID-19 pandemic, but have since reduced in magnitude. ONS needs to conduct a revisions analysis for recent years, aiming to identify the reasons for revisions and explore potential strategies to minimise them further. It should communicate the findings with users to reassure them and improve trust.

ES.4 ONS uses a variety of software systems to produce BI statistics. However, many of these systems are outdated. For example, Common Software (a legacy system) cannot be updated and so increases the risk of errors. The BI team acknowledges the need to modernise its current systems, although it operates within the broader software constraints across ONS. Addressing these issues is a broader challenge across ONS and the BI team has been actively engaging with ONS on the need to modernise. Within the current constraints, the Business Investment team should aim to enhance the efficiency of the production and reduce the risk of processing errors by adopting Reproducible Analytical Pipelines (RAP) principles.

ES.5 ONS should ensure it provides quality and methodological information alongside estimates and that it keeps this information up to date. Users want ONS to provide more quality and methodological information for its more granular breakdowns of Business Investment. The team has recently updated the Quality and Methodology Information document for the Business Investment bulletin. However, the QMI documents for some of the data sources are outdated.

ES.6 ONS is proactive and consistent in its engagement with key users of Business Investment statistics. However, some wider stakeholders reported not having direct contact with ONS. ONS is therefore losing out on industry-specific intelligence that could help it to better understand the quality of the data and improve the statistics. ONS should engage with a broader range of users of Business Investment statistics.

Next steps

ES.7 We have identified five requirements that ONS must fulfil to improve the quality of the statistics to the standards required by the Code of Practice for Statistics. To reassure users that it is taking actions to improve these statistics, ONS should publish a development plan by January 2025 setting out how it will address the assessment requirements, and report back to us publicly every three months on its progress.

List of Requirements

Requirement 1: Although the Quarterly Acquisitions and Disposals of Capital Assets Survey (QCAS) is benchmarked against other, more-comprehensive ONS business surveys, there may still be an issue regarding the representativeness of Business Investment statistics. To understand whether, and to what extent, Business Investment statistics are representative of all business investment activity in the UK, ONS should analyse the impact of the non-sampling of businesses with fewer than 20 employees within the QCAS survey. ONS should use the findings of the analysis to describe quality in a way that supports beneficial use of the statistics. If this analysis demonstrates that this practice does meaningfully impact Business Investment estimates, ONS should investigate and implement ways to reduce non-sampling errors in the estimates.

Requirement 2: Substantial revisions to Business Investment statistics since the start of the COVID-19 pandemic have impacted user confidence. To regain that trust, ONS should:

• conduct a comprehensive revisions analysis covering the period from 2020 onwards, including for estimates published as part of the annual Blue Book process. The findings of this analysis should be effectively communicated to users, along with a clear plan for any methodological improvements aimed at minimising future revisions
• reinforce transparency and reliability, by publishing revisions analysis annually with explanations of the reasons for any revisions, reassuring users about the quality of the data and restoring their confidence in the statistics

Requirement 3: ONS should streamline its production processes according to Reproducible Analytical Pipelines (RAP) principles to reduce reliance on manual processing. This approach will enhance efficiency and minimise the risk of production errors.

Requirement 4: To improve users’ understanding of Business Investment statistics, ONS should:

• keep published Methods and Quality Information up to date
• enhance the visibility and accessibility of links to supporting materials. Specifically, ONS should more prominently signpost Quality and Methodology Information and related documents within BI bulletins, as well as offer clearer explanations of where users can easily locate relevant supporting information

Requirement 5: ONS should engage with users of Business Investment statistics across a broad range of industries, providing opportunities both for ONS to improve its understanding of user needs and for users to improve their understanding of the statistics. Wider engagement could also enable ONS to improve the quality of Business Investment statistics, by providing a route to access industry-specific knowledge through discussion with field experts that may help improve methods and the resulting statistics.