Review of Statistics for Economic Policymaking First Report

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Review of Statistics for Economic Policymaking
First Report
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Terms of reference

• to deliver an assessment to the Chancellor, the
  Governor of the Bank of England and the National
  Statistician, with a first report by the 2003
  Pre-Budget Report on the following
• the regional information and statistical
  framework needed to support the Governments key
  objective of promoting economic growth in all
  regions and reducing the persistent gap in growth
  rates between the regions
• whether the changing economic structure of the UK
  is being properly reflected in the nature,
  frequency and timeliness of official economic
  statistics.

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Outline

• Data demands
• Framework for analysis
• Recommendations
• Macro
• Micro
• Institutional
• Key part 2 issues

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Data Demands - Institutions

• Public Sector devolved administrations, RDAs,
  Government Offices, Regional observatories
• Government departments HM Treasury, ODPM, DTI,
  ONS, DEFRA, DWP, DfES, and local government
• Private sector bodies Experian, OEF, Cambridge
  Economics, TUC, CBI, BCC, businesses
• Political bodies / Academics
• Bank of England

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Data Demands - Policy Agendas

• Devolution
• Joint PSA target on regional growth convergence
• Assessing Economic Performance, including EU
• Productivity
• Flexibility (including labour, migration)
• Welfare/Distribution
• Public Services
• Regional Price Indices and Pay
• Neighbourhood Renewal
• Sustainability (Quality of Life, rural/urban)

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Organising Principles

• Two overarching policy principles
• Devolution with constrained discretion
• Devolved budgets and distribution
• Plus
• Focus on economic statistics
• Implicit Cost-Benefit
• All countries and regions treated equally
• Improve national data

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Macro-Regional Data

• Organising principles explain data demand
• at regional level
• Data needs are clear
• Broad consensus on way forward
• But inadequate data on regional GDP and no
  deflators
• Requires detailed and technical solution, eg ABI
• Necessarily resource intensive
• Compliance costs

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Macro-Regional Data Recommendations

• GVA
• Annual real measure based on production / output
• Fundamental survey issues (ABI)
• Other Macro
• Labour market
• Consolidate boost arrangements
• ABI/LFS
• Regional Migration
• Regional price levels and deflators
• Not recommending
• Quarterly GVA
• Inter-regional trade matrix

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Micro-Regional Data

• Key policy driver - Delegation to regional
  organisations
• Implies huge data requirements of variety of
  kinds
• Measure policy impact
• Monitoring and assessment
• Understanding transmission mechanism
• Different regions need different data sets

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Micro-Regional Data

• Review cant direct what each region should have
• But need standardisation (Kitemark), coordination
  and improved dissemination
• Take into account in survey design as matter of
  routine
• Platform based on Neighbourhood Statistics
• Institutional solution
• Coordination of regional demands for micro data
• Framework for decision making between ONS and
  regional demands

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Statistical Infrastructure

• Significant ONS/GSS presence in the regions
• Improve regional GVA through back and forth
  process
• Improve quality and comparability of micro data
• Institutional framework for micro data
• Administrative data

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Regions v. Industries

• Micro / macro
• Reasons for industrial classification
• Statistical stratification
• Supply-use
• Deflation
• Policy
• Survey consolidation
• Across time
• Across different surveys

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Costs and benefits

• Better informed policy
• Improving regional data will require additional
  financial and staff resources for ONS
• And additional costs and burdens on firms
• Current compliance costs of ABI 6m, could rise
  to 20-25m (for Rolls-Royce option)
• Some possible savings
• Stratification of ABI
• Consolidation of surveys, eg Continuous
  Population Survey
• Access to administrative data
• EU requirements, eg PRODCOM

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Next steps

• Responses by 13 February
• allsopp.review_at_hm-treasury.gov.uk
• Part 2
• Final Report for Budget 2004