Bean Review calls for excellence in UK economic statistics

Written by Olivia Varley-Winter on . Posted in Features-OLD

The final report of Professor Sir Charles Bean’s Independent Review of Economic Statistics - published on 12 March 2016 - follows in the footsteps of other reviews of various aspects of economic statistics.

However, where it differs from those previously published is the extent to which it considers the challenges of statistical measurement in the modern economy. It takes the measurement of GDP as an example:

'[Measuring real GDP] is hard enough when an economy largely produces physical goods, but becomes even harder in developed countries like the UK where services constitute a large fraction of the economy [...] Quality improvements and product innovation have been especially rapid in the field of information technology [and] have also made possible completely new ways of exchanging and providing services. Disruptive business models, such as those of Spotify, Amazon Marketplace and Airbnb, are often not well-captured by established statistical methods, while the increased opportunities [of the internet] have muddied the boundary between work and home production. … Measuring the economy has never been harder.'

A video of Sir Charles Bean summarising these challenges can be viewed here.

His report recommends 24 Actions across the following six strategic recommendations (A to F), calling for the UK’s statistical system to:

A. Address established statistical limitations in measuring the modern UK economy
B. Become more agile in the provision of statistics that properly reflect its changing characteristics and structure
C. Refocus the culture of ONS toward better meeting user needs
D. Make the most of existing and new data sources, and the technologies for dealing with them
E. Become better at understanding and interrogating data, and
F. Strengthen the governance framework so as to help support the production of high-quality economic statistics.

We particularly welcome recommendations reflected in our Data Manifesto, for example, the Review’s support for access to data from the private sector to be better explored (at 1.41 Action 11), and for rules against pre-release access to statistics to be robustly enforced (at 5.32).

The RSS highlighted key requirements for investment in the UK statistical system in our initial press release on the published review, and the need for UK Budget plans to support these important developments:

  • The establishment of a new centre of excellence for the analysis of emerging issues in the modern economy (1.33 Action 4). ONS needs to build up its capability to make the most of existing and new data sources, and this should be facilitated through collaboration with academia, the private and public sectors, and internationally. The RSS’ evidence to the Review highlighted the need for greater collaboration between ONS and the Bank of England on economic statistics as a component of this.

  • Recruitment of a cadre of data scientists to widen the ONS’ skills base, alongside the establishment of a data science hub in and around ONS for the development and application of techniques (1.41. Actions 13 and 14). The Review broadly discusses the user requirement for ONS to leverage its value as custodian of much of the data, and to provide a service for understanding of statistics. It recommends the establishment of a high-profile stakeholder group.

    This is a call that the RSS gives qualified support for, and that such arrangements should apply to other statistics as well. The RSS’ supplementary evidence to the review called for a well-resourced structure to operate across all areas of statistics, to nurture long term engagement between the producers and users of those statistics. Mike Hughes, Chair of the RSS National Statistics Advisory Group said: 'The Review takes the right approach in saying that statistics must be made more answerable to its users. We support the idea of a new high level stakeholder group of economic statistics users. This approach could be usefully mirrored in areas beyond economic statistics.'

  • Removing obstacles so that more public administrative data can be accessed for statistical purposes, through changing the associated legal framework, whilst ensuring ethical safeguards are in place (1.41 Action 10). The RSS supports amending legislation to strengthen ONS’ powers to access data. We are holding a consultation event on 17 March regarding current Cabinet Office proposals which addresses some of ONS’ requirements.

  • The UK Statistics Authority should have the power to decide that a piece of data be classified as an official statistic (1.54 Action 18). Greater use of administrative data should be accompanied by appointment an independent person or body to oversee their application (1.54 Action 20).

    The RSS believes that alongside the proposal of these mechanisms, the recommendation to strengthen the regulatory function within the UKSA should be welcomed. In recent years we have seen greater use of de-designation of statistics, and an increased focus on data quality. The creation of a new Independent Regulation and Evaluation Office within UKSA could be a powerful way of giving greater profile to the regulatory function of the UKSA, and of ensuring that users and the public see the regulatory function as clearly separate.

The Bean Review argues that the binary notion of designation of National Statistics should be made more graduated. However, the RSS takes the view that the binary nature of the National Statistics designation should not be compromised, as this gives clarity and trust in the minds of the public and users as to which statistics are trustworthy.

The Review’s final report follows an interim report released in the autumn, which we have previously covered here and discussion at meetings and events, including an open meeting held at the RSS of which a report can be viewed here.

Finance & The Economy Sir Charles Bean

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