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This publication is available at https://www.gov.uk/government/publications/independent-review-of-uk-economic-statistics-final-report/press-notice-take-economic-statistics-back-to-the-future-says-charlie-bean
UK economic statistics need to be transformed in order to fully capture all the activity in the economy according to a new report published by Professor Sir Charlie Bean today (Friday 11 March 2016).
Charlie Bean, a former deputy governor of the Bank of England, set out his findings in his final report into UK economic statistics which was launched at Europe’s largest data observatory, the Data Science Institute at Imperial College London.
The review builds on his interim findings from last year and concludes that the current statistics are showing their age having being designed over fifty years ago when the economy was dominated by goods not services. The digital revolution and fast technological advancements of recent years, have changed the way many businesses operate (Amazon, Skype), given rise to new ways of exchanging and providing services (Airbnb, TaskRabbit), have muddied the waters between work and leisure, and made it far harder to accurately measure economic output. Many businesses also operate across national boundaries and depend on intangible assets, which adds to the complication of accurate measurement.
The report suggests that if the digital economy was fully captured by official statistics, it could add between one-third and two-thirds of a percent to the growth rate of the UK economy. To tackle this challenge a key recommendation is for ONS to set up a research centre and work with academics and businesses to find ways to better measure this economic activity.
The report also recommends ONS set up a data science hub which, along with a new cadre of data scientists, would allow them to make more use of big data. This hub would draw on the hoard of administrative data which already exists in the public sector and which has the potential to greatly improve economic statistics. This report comes shortly after the government launched a consultation on proposals that would increase ONS access to data for statistics – as Professor Bean calls for.
Professor Sir Charles Bean said:
We need to be candid about the limitations of UK economic statistics. The UK was one of the original pioneers of national accounting. We need to take economic statistics back to the future or we risk missing out an important part of the modern economy from official figures.
I have recommended two new centres are set up to better measure economic activity, and also to use the treasure trove of big data available – especially in the public sector.
There is also a need for culture change in ONS, to bolster economic capability and place users’ needs at the heart of everything it does. ONS needs to be innovative enough to produce the statistics we need for the future.
On governance, the report identifies the need for greater scrutiny following its finding that many economic statistics are deficient. The report calls for a new Independent Evaluation and Regulation Office within UKSA to monitor both the quality of statistics and ONS’ performance. This body would subsume the existing UKSA regulatory function.
A number of recommendations focused on the need for culture change at ONS. Other interim recommendations, such as building up the capability of its operation in Newport, while also increasing its London profile, remained unchanged.
Professor Sir Charlie Bean was commissioned by the Chancellor of the Exchequer and the Minister for the Cabinet Office at the 2015 Summer Budget to carry out an independent review of UK economic statistics. Professor Bean was supported by a small team consisting of staff seconded from HM Treasury, ONS and the Bank of England.
The full list of high-level recommendations made by the full report are:
- address established statistical limitations
- become more agile in the provision of statistics that properly reflect the changing structure and characteristics of the economy. One of the specific recommendations here relates to the new research centre
- refocus the culture of ONS towards better meeting user needs
- make the most of existing and new data sources and the technologies for dealing with them. This includes recommendations for use of admin data and for the creation of the data hub
- become better at understanding and interrogating data
- strengthen the governance framework so as to help support the production of high-quality economic statistics
The Cabinet Office consultation on better use of data in government was launched on 29 February 2016.
Imperial’s Data Observatory comprises a circular wall of 64 monitors which enables decision makers to fully immerse themselves in complex data sets, visualising them in an innovative way in order to uncover new insights.
Imperial’s Data Science Institute is positioning the UK as a pioneer in big data technologies, helping to improve predictions of diseases, stimulating innovation, unleashing waves of productivity and creating new consumer services.
A short summary video covering the report’s key findings can be found on YouTube:
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