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Office for National Statistics correspondence to the Treasury Committee on labour market statistics

Dear Dame Meg,

As National Statistician and Chief Executive of the UK Statistics Authority, I am responding to your letter of 21 November regarding the Labour Force Survey.

The Office for National Statistics (ONS), as the UK’s National Statistical Institute (NSI) and largest producer of official statistics, delivers independent and relevant statistics and analysis, continuously responding and improving to ensure these are of high quality and meet user need. The ONS is delivering a programme of improvements to increase the quality of data from the Labour Force Survey (LFS). While we are starting to see the positive impacts of these recovery efforts, our continued work to stabilise the data in partnership with key users is our highest priority. Alongside this, we are progressing our strategic solution to the international fall in survey response rates and sizeable inflationary impacts, through the online-first Transformed Labour Force Survey (TLFS).

Recovery of the LFS

The sharp fall in survey response rates, a long-term trend that rapidly accelerated during and after the pandemic period, has been a significant challenge in the UK as well as for other NSIs around the world. There are many reasons for this decline, including increased cautiousness around the sharing of personal information, declining trust in government and public institutions, a reluctance to have interviewers inside homes and increased challenges accessing secure/gated properties.

The LFS involves five ‘waves’ of data collection – an initial survey interview, then eligible households repeat the survey each quarter on four further occasions to track changes in employment over time. The voluntary nature of the UK’s LFS as well as its significant length (around 45 minutes per wave per household on average) have meant LFS response rates have been more heavily impacted than other countries.

We are acutely aware of the significance of reliable labour market statistics as a source of evidence for economic decision making and that some indicators are only available from surveys such as the LFS. We do not underestimate the challenges involved with the use of data to inform the decision making of central banks in times of uncertainty, as the 2023 Bernanke Review set out.

Following the disruption of the pandemic and a period of substantial inflationary impacts with difficult prioritisation decisions, the ONS worked to re-establish high quality survey data collection, by re-introducing face-to-face data collection survey by survey, re-training interviewers and re-establishing the operation. By 2023, it was evident that societal behavioural changes as a result of the pandemic had influenced the data collection environment and were contributing to the survey quality not recovering at the rate anticipated. At its lowest point in 2023, the LFS response rate was 17.4% (UK, including imputed cases). This had significant implications for the quality of the statistics derived from the survey, resulting in the temporary suspension of the LFS as a source of labour market data in October 2023. Due to the dwindling response rates, we introduced the LFS Recovery Plan to restore the quality of its estimates, focusing on data collection improvements and methodological enhancements. The complexity of the survey and issues meant the interventions would take time to fully embed in the survey and subsequently improve the quality of the estimates.

As part of data collection improvements, we increased the targeted sample by over 50% in January 2024 from 16,700 to 25,800 new households each quarter, returning it to the levels adopted in the aftermath of the pandemic period. We increased face-to-face interviewing and the incentives for participation from £10 up to £50, with a particular focus on Wave 1 responses (our initial collection with a household). As a result, the achieved sample is now 15,000 higher than at its lowest point, an increase in the overall UK response rate from 17.4% in Jul-Sep 2023 to 24.6% in Jul-Sep 2024. We are currently recruiting an additional 150 interviewers to further support Waves 2-5.

Methodological enhancements have focused on the weighting of survey results to support quality. Weighting utilises population projections and estimates to ensure data collected from only a sample of the population produces outputs that are representative of the entire population. Population projections are usually provided once every two years but during this period they were impacted by the unusual migration pattern following the pandemic and the effects of changes to the immigration system following the UK’s exit from the EU. Therefore, the ONS introduced an additional partial re-weighting in February 2024 as well as for December 2024. LFS quarterly person data has been reweighted back to 2019 using updated population numbers. An article to illustrate the impact was published on 3 December 2024 and full results will be released on 17 December 2024. Reweighted two-quarter longitudinal LFS person outputs are expected in spring 2025. A more complete reweighting of all LFS data will follow during 2025/26, as well as Annual Population Survey (APS) data which makes use of LFS responses and additional sample boosts to deliver regional and local level statistics.

As noted above, the wave nature of LFS means data collection and methodological improvements take time to feed through fully into the estimates. Autumn 2024 has seen significant volatility and we have supported users to navigate the data uncertainty in this interim period. This includes being clear on our website, social media and broadcast media interviews on the data limitations and how they affect the use and interpretation of LFS estimates. Our expanded commentary recommends that, at this time, users make full use of all available data sources when assessing the labour market, such as HM Revenue & Customs (HMRC) data on the number of people on payrolls and the number of workforce jobs, which the ONS has developed and published. We highlight that these sources are currently likely to be providing a better read of recent trends in employment, particularly of employees.

Acknowledging the complexities of the challenges and the vital importance of these statistics to users, we have strengthened our engagement with stakeholders and channels for external challenge, support and expertise to inform our approach. We introduced a new monthly Technical Engagement Group in October 2023 with members from the Bank of England (BoE), HM Treasury (HMT), Office for Budget Responsibility (OBR) and the Department for Work and Pensions (DWP) to provide a forum to discuss upcoming developments and improvements in an open and transparent manner, which is providing invaluable input and feedback on our plans for both LFS and TLFS. In addition, in June 2024, we established a Stakeholder Advisory Panel on Labour Market Statistics chaired by Professor Jonathan Portes with representation from academics, think tanks, core government organisations and the Devolved Administrations, to provide independent advice and guidance on the production, publication, uses and application of labour market statistics and their technical aspects.

One focus has been on exploring how survey response challenges might be introducing potential bias in the LFS estimates, in particular for young people and ethnic minorities. This was considered at the Stakeholder Advisory Panel on 24 October 2024 and will be further addressed in a special session later this month that will also be attended by members of the Technical Engagement Group to assess whether any further methodological actions are necessary. We plan to extend our work on the coherence of key labour market data sources, with a further publication planned in the new year.

In summary, progress has been made in recovering the LFS with the achieved sample now significantly higher and the incorporation of the latest population information into the estimates. The major changes we have made to the LFS will be fully included through all five of the survey waves by the first quarter of next year, which will inform the LFS estimates for publication in May 2025.

Progress on the TLFS

Our long-term solution to falling response rates and quality challenges on the LFS is the development of an online-first evolution of the LFS called the Transformed Labour Force Survey (TLFS). The ambition of the TLFS is to improve the quality of our labour market statistics, provide a more adaptive and responsive survey to meet user needs and enhance respondent experience. While the online-first nature of the survey enables a far larger sample size than the LFS, to ensure quality of the survey and reduce bias, ONS field force still visit 3,855 addresses a week on the TLFS to encourage them to complete the survey, referred to as ‘knock-to-nudge’.

The ONS started a full parallel run of the TLFS alongside the LFS in October 2023 to determine whether the performance of the survey met operational and statistical quality criteria. Compared with the LFS, in this pilot the TLFS provides a larger achieved sample (quarterly datasets include more than double the number of people than LFS), a higher response rate at every wave (40% compared to 36% at Wave 1) and the potential for more stable weighted outputs. However, there was bias in response towards older age groups, higher levels of partial responses compared with the LFS, and quality issues with the online response to some more complex variables such as respondents’ occupation and the industry in which they work.

The analysis of the parallel run data for headline labour market outputs demonstrates differences in headline labour market outputs between the two surveys. While some of this difference is expected (e.g. the TLFS uses the latest labour market definitions and updated methods which differ from those on the LFS), we have a strand of work to further account for the differences and identify adaptations, working with users to understand the implications for outputs and manage how data are used in their own systems.

As part of our open approach and bringing in of external challenge and expertise around the survey design complexities, the ONS has enhanced the role of the Methodological Assurance Review Panel (MARP). Through MARP, we commissioned Professors Chambers and Brown to undertake a methodological and design review of the TLFS in April 2024. This review recommended new work on a shorter online survey with the capacity for designed modular additions, as well as the need to continue the parallel run for five quarters to assess how the surveys captured seasonal variations in the labour market. Based on this review and feedback from both internal and external users, in July 2024 we announced an extension of the parallel run of the LFS and TLFS and plans to test further design improvements within the TLFS.

Since July we have completed a series of discrete online design tests to assess the impact of a shorter TLFS questionnaire that aims to reduce average household completion time from 37 minutes to around 15 minutes. The test also included questionnaire changes to address bias, rates of partial response and collection of complex variables, as well as the use of a QR code to ease citizen response.

Early indications show positive outcomes from the design tests with some areas for development. We are now conducting a thorough evaluation and reviewing the content of the shorter survey to ensure it meets key labour market requirements whilst reducing respondent burden as much as possible. Pending evaluation of the test activity, an examination of our assumptions and engagement with our expert groups, there are several scenarios for when we are able to transition from using the LFS to using the TLFS, involving the implementation of the shorter survey and further periods of parallel run. Therefore, we cannot yet set out a firm timetable for transition but will layout potential timetables in quarter one 2025. While one scenario based on a shorter questionnaire is 2027, my ambition is to transition in 2026, with the timings being determined in collaboration with key users to ensure the TLFS meets their quality and system needs.

The development of the TLFS has provided a continuous opportunity for the ONS to learn and refine how it delivers this complex transformation project. In summer 2024, the ONS conducted an internal lessons learnt exercise including historical cultural issues. Our colleagues are committed and passionate about producing high quality labour market statistics and the exercise provided colleagues with the opportunity to contribute views with candour from across the totality of the project. A summary of the lessons learnt and the initial actions taken to address the issues is at Annex A. In particular, we strengthened technical and methodological leadership, including appointing two experienced senior colleagues to shore up analytical leadership capability. Additionally, the Director for Methodology is supporting oversight on the conditions for quality and the journey towards stability of the TLFS. We also raised awareness of channels that colleagues can use to escalate known issues and are promoting a culture that encourages the surfacing of risks and invites constructive challenge. While the report suggested a pause in development of the TLFS, the critical nature of the statistics and the decisions that flow from them means we are redoubling our efforts to improve and roll out the TLFS as soon as is practicable, with a continued focus on the wider issues raised.

International comparisons and further development

While some other countries do achieve higher response rates on their equivalent labour market surveys, many NSIs have also seen falling response rates in recent years. We are continually engaging with, and learning from, partner NSIs to boost response rates and reduce any response bias. The insights we receive from these NSIs are contributing to the ongoing evolution of TLFS design, specifically on the shorter survey, which harnesses the benefit of large-scale, online, self-completion.

The Independent Review of the UK Statistics Authority (the Authority) conducted by Professor Denise Lievesley earlier this year recommended that the Authority explore the consequences of mandatory completion of the LFS. Mandating would align with the census and business surveys and is akin to the civic duty of undertaking jury service. A move to mandating responses to the LFS would require legislation (as is the case for census and business surveys) and is not something the ONS can consider alone. We welcome a broader national conversation about the importance of citizens being represented in the country’s statistics and championing the value of data as critical national infrastructure.

Given the strategic challenges that surveys are facing, we are establishing a new Surveys Innovation Hub, expanding our portfolio of surveys research and are continuing to work closely with the Economic and Social Research Council (ESRC) funded Survey Futures project. On Survey Futures, the ONS is collaborating with other survey providers to explore the feasibility of using names and contact details to cross-reference with our address database to make contacting individuals easier. We are conducting a suite of research to improve our ability to reach the public, build trust and gain consent to overcome barriers to completion of our household surveys. We are also exploring the use of alternative data sources in our end-to-end survey design, for example enabling us to adapt our samples and focus operational effort on contacting those population sub-groups that are typically less likely to engage in our surveys.

The common picture across many countries, and the UK’s survey sector (public and private) as a whole, of falling response rates suggests that we can no longer rely on surveys alone. While there are some questions that only can be accurately answered by large surveys, such as the distinction between unemployment and inactivity, we have already begun publishing other data sources to build a fuller picture of the labour market. The Integrated Data Service (IDS), a functioning cross-government hub that allows full value to be extracted from data collected across the public sector and beyond, will seek to identify, share and link securely these and other data sources across government to further build our understanding of the labour market. LFS data and HMRC tax data (PAYE RTI) were linked through the IDS in November 2024 and this integration of survey data and administrative sources will be used to inform labour market quality assurance and survey methods. More effective sharing of de-identified administrative data across government will further improve the quality of statistics and evidence to support national and local decision making.

Working in partnership with our key stakeholders, and learning from other countries, we will extend our exploratory work on integrating survey and administrative data to produce a holistic picture of the UK’s labour market. This includes our plans to produce Labour Market Accounts, which aims to provide a comprehensive understanding of the UK’s labour market through the optimum balance of survey and administrative data.

Resourcing

As with other parts of the public sector, the Authority’s funding position throughout the Spending Review 2021 (2022/23 to 2024/25) has been one of constraint overall, including flatlined core funding, ring-fenced budgets, and substantial inflationary impacts. Operating within our budget in this context has led to difficult prioritisation decisions and the need to deliver efficiencies and cost savings across the organisation. Our efficiency and cost savings figure was approximately £11.4m for 2022/23 and £17.8m for 2023/24. We plan to deliver an estimated £12m in efficiencies and cost savings in 2024/25 taking the cumulative impact for the Spending Review 2021 (SR21) period to over £40m.

The work to prioritise activity and reduce costs started in 2022/23 and continued through 2023/24, impacted by the cost of increased colleague salaries and a notable inflationary effect on our cost bases, including through surveys. Significant cost saving measures to remain affordable, the need to dual run the LFS and TLFS and restrictions from ring-fenced budgets curtailed our ability to use the totality of organisational funding and dedicate the resources we would have ideally wanted to our social surveys operation.

The survey recovery plan in late 2023 set out how existing resources could be utilised to pivot to support the LFS/TLFS and other surveys to start to redress the downward trend. Given the skills and capabilities required to drive improvements and the scarcity of options, we further prioritised within the survey workforce. Simultaneously we set out our plans and a request for additional finance to HMT for the Surveys Quality Recovery Plan 2023/24, which was supported and the funding made available.

Prioritisation of surveys recovery formed a key component of our recent Spending Review 2025 (SR25) Phase 1 submission. Whilst funding for 2025/26 will remain at the same level as 2024/25 (flat cash) as part of our financial objectives we have been supported in significantly reducing the level of ring-fenced funding we receive as a proportion of the whole. This added flexibility will be vital for us in being able to pivot resources at pace in future and enables us to implement an LFS sustainability plan.

Throughout 2023 and 2024, the ONS’s three highest field data collection priorities have consistently been the labour force surveys (LFS and TLFS parallel run) and the Living Cost and Food Survey. Our decisions to not reapply for the contract to collect data for the National Survey for Wales for the Welsh Government in March 2023 and reduce interviewer resource on its financial surveys in February 2024 (including pausing the Survey of Living Conditions) reflect these priorities. Other surveys have also seen reduced support.

The additional investment allocated in the last year to recover the LFS and the ONS’s wider social surveys is enabling significant field interviewer recruitment. Our permanent face-to-face field interviewer community has grown from 477 (Dec 2023) to 544 (Nov 2024). Within the same timeframe we have also built up an agency workforce of 130 temporary field staff specifically to complete the ‘knock-to-nudge’ function on the TLFS, which releases an equivalent number of fully trained interviewers to support recovery across ONS’s social surveys. Compared with the 145 interviewers in October 2023, in the last month 275 face-to-face interviewers have worked on the LFS (across all waves). Recruitment continues, with a further 28 interviewers confirmed to start on the LFS in December to support improvements in Waves 2-5 response and recruitment ongoing to deliver the full requirement of 457 face-to-face interviewers across all LFS waves by the end of March 2025.

As an organisation, we fully comprehend the critical importance of high-quality labour market statistics and recognise the significant impact the response challenges are having on the reliability of data informing our key outputs. We are confident that by continuing to seek out internal and external challenges and expertise, progressing the improvements already made and delivering the solutions outlined above in partnership with our key stakeholders, we will be able to recover the quality issues with the LFS and continue our progress towards transition to the TLFS. Achieving a successful outcome from these programmes of work is the top priority for the ONS.

Yours sincerely,

Professor Sir Ian Diamond

 

Office for National Statistics follow-up correspondence to the Work and Pensions Committee on Defined Benefit pension scheme funding

Dear Ms Abrahams,

Firstly, congratulations on your appointment as Chair of the Work and Pensions Committee. I previously responded to a letter from your predecessor, Sir Stephen Timms MP, on Defined Benefit (DB) pension scheme funding at the beginning of this year. I wanted to write to update you on progress made on these statistics, prompted, in part, by the Committee’s interest in them.

The Work and Pensions Committee previously recommended that the Office for National Statistics (ONS), The Pensions Regulator (TPR) and the Pension Protection Fund (PPF) should reach an understanding of the funding position of DB schemes and publish the results. We note that the Secretary of State for Work and Pensions wrote to you with an update that the Department for Work and Pensions (DWP) is working to provide a full response to the report on this topic in the new year.

The ONS, TPR and PPF have worked alongside each other for many years, with increasing closeness since autumn 2022, to understand the differences between our respective datasets on DB pension schemes. Tomorrow, the ONS will publish a joint statement with TPR and the PPF to acknowledge and summarise the different approaches taken to both data collection and how the data are used by the three organisations, making this as clear as possible to our users and stakeholders. We will continue working together on an ongoing basis and expect our datasets will show greater alignment in future based on our collaboration and proposed changes.

Please do not hesitate to contact us if any questions.

I am copying this letter to Sir Stephen in his role as Minister for Social Security and Disability at the Department for Work and Pensions.

Yours sincerely,
Rebecca Richmond
Deputy Director, Financial Sector Accounts and Corporations

Office for National Statistics follow-up written evidence to the Welsh Affairs Committee inquiry on the impact of population change in Wales

Dear Mr Crabb,

I write following my appearance in front of your Committee on 6 December 2023 with my colleague Jen Woolford, as part of the Impact of Population Change in Wales inquiry, and your subsequent letter dated 22 February 2024. I have addressed the queries raised during the session and in the letter in turn.

Population Age and Economic Growth

During our discussion, the committee asked if a “Younger population always positively correlated with economic growth” and I agreed to share some further information on this topic.

There is evidence that average population age tends to be lower in cities and larger towns, and higher in smaller towns and rural areas.  For example, as outlined above the median population age of local authority districts in Wales range from 34.4 years in Cardiff in mid-2022, to 51.1 years in Powys. However, in terms of economic growth there is not a straightforward statistical relationship between population age (or type of area) and economic growthTo illustrate, the highest economic growth rates between 2011 and 2021, did not occur in Wales’ major cities (where population is youngest), but instead occurred in the local authorities of Pembrokeshire, Flintshire, and Merthyr Tydfil. The lowest economic growth, did occur in relatively rural local authorities with older populations, namely Ceredigion, Gwynedd, Isle of Anglesey and Powys.

The reason why there is not a direct correlation between age and economic growth is that there are a wide range of different factors that can influence economic growth. These will vary by place but can include, for example, an area’s industry mix, its levels of business investment, recent infrastructure improvements and changing consumer demands amongst many other factors.

Economic Inactivity

Rob Roberts MP asked me how the levels of economic inactivity in Wales compare to other parts of the UK.

Mr Roberts quoted that in Wales, 33.8% of working-age people were economically inactive because of long-term sickness. The figure of 33.8% shows that of those who were economically inactive, 33.8% were economically inactive due to long-term sickness, with the remaining 66.2% economically inactive for other reasons.

At the time of the quoted 33.8%, only 23.8% of the population of Wales aged 16 to 64 years was economically inactive. Of these 33.8%, or just over one third were economically inactive due to long-term sickness. Therefore, this represents 8.0% of the whole population aged 16 to 64 years who were economically inactive because of long-term sickness. For the period October 2022 to September 2023, 7.6% of the population of Wales aged 16 to 64 years were economically inactive because of long-term sickness.

Generally, Northern Ireland has the highest percentage of the population who are economically inactive because of long-term sickness, with recent rates in excess of 9% of the population aged 16 to 64 years. Wales tends to be in a group with Scotland, and the North East and North West of England with rates around 7-8.5%. Below this there is a group at around 5.5-6.5% consisting of Yorkshire and The Humber, and the East and West Midlands. Then the East of England, London, South East and South West have the lowest rates at around 4-5%.

Areas of Significant Population Change

During the session, it was discussed if there were any areas in Wales that stood out as having particularly significant levels of population change. Between mid-2011 and mid-2022, the local authority district in which the population is estimated to have increased the most is Newport, where the population increased by 10.8%. Cardiff (7.7%) and Vale of Glamorgan (5.4%) were the only other local authority districts in which population growth exceeded 5% over this period.

Between mid-2011 and mid-2022, there were six local authority districts in which the population is estimated to have decreased. These are Ceredigion (-4.9%), Blaenau Gwent (-4%), Gwynedd (-3.2%), Caerphilly (-1.5%), Isle of Anglesey (-1.2%) and Conwy (-0.9%).

Welsh Speaking Population Change

You asked what Census 2021 data indicated that the number of Welsh speakers in Wales is falling and any data that offers insight into changes in the Welsh speaking population. According to Census 2021, there were around 538,000 people aged three years or older reported as being able to speak Welsh in Wales, or 17.8% of the population.

This is the lowest percentage ever recorded in a census, driven largely by a decrease in reported Welsh speaking among children and young people. Although the percentage of the population able to speak Welsh decreased overall, there has been a slight increase in the percentage of people who can speak Welsh in the young adult groups (16- to 19-year-olds and 20- to 44-year-olds), with decreases in the older age groups.

The percentage of people aged three years or older who can speak Welsh fell between 2011 and 2021 in all of the 22 local authorities in Wales, except in Cardiff, the Vale of Glamorgan, Rhondda Cynon Taf and Merthyr Tydfil. Furthermore, all local authorities saw a decrease in the percentage of 3 to 15-year-olds reported as being able to speak Welsh between 2011 and 2021. The decreases for these age groups tended to be greater in areas with a lower density of Welsh speakers, such as in Blaenau Gwent, Newport and Torfaen.

Information about Welsh language skills in the census is based on a person’s self-assessment of their ability. In some cases, especially for children, Welsh language ability was reported by another person, for example, a parent or guardian. Census 2021 was held during the coronavirus (COVID-19) pandemic, on 21 March 2021. This followed periods of lockdown, remote learning for children and many people were working from home. It is not known how the pandemic may have impacted reported Welsh language ability (or perception of the Welsh language ability of others).

Alongside this letter, we have included a spreadsheet that details the change in the number and percentage of Welsh speakers by local authority and age band by comparing Census 2011 data to Census 2021 data.

Community Crisis Point

The Committee also asked us if the ONS has data indicators that can “identify definitively when a community reaches a crisis point”. Generally, this is a very complex question that ONS data alone could not answer. The topic and question would possibly be more holistically explored by local communities and academic experts in this field.

However, on the specific issue of second homes, our data can provide some insight. As part of Census 2021 the ONS has published data on the number of vacant and second homes in England and Wales. Unfortunately, this data is not comparable with 2011 data, so it is not possible to directly compare over time.

The Welsh Government regularly releases council tax dwellings statistics which include information about second homes and did an in-depth look at the variety of statistics available for Wales in the Second Homes: What does the data tell us? publication. ONS works closely with our colleagues in Welsh Government and elsewhere to provide data and statistics that can be used to provide evidence on priority housing topic areas such as second homes.

I hope this evidence is useful to the Committee. Please let us know if there is anything further we can provide as the inquiry continues, or on any other matter.

Yours sincerely,

Emma Rourke

UK Statistics Authority supplementary evidence to the Public Administration and Constitutional Affairs Committee’s inquiry on Transforming the UK’s Evidence Base

Dear Mr Wragg,

Following the submission of the Office for National Statistics’ (ONS) written evidence to the Committee’s Transforming the UK’s Evidence Base inquiry on 31st August 2023, I then gave oral evidence to the Committee on 5th September 2023.

One of the topics that I am aware the Committee has been interested in, during the course of this inquiry, is analytical capability across government. I am pleased to be able to provide some additional evidence on this topic, as requested.

Analytical Skills

 The Analysis Function (AF) is committed to building skills and knowledge across our community of 17,000 analysts, supporting effective career planning, and ensuring that we have skilled people in the right place at the right time. We have developed a suite of materials, designed to support analysts to navigate their careers across government analysis. These include the AF Career Framework, which features multidisciplinary role profiles and career pathways, as well as career stories showcasing the variety of entry points and available career progression routes.

The Analysis Function remains focussed on providing a learning and skills offer that meets the diverse needs of our community and adds value to the work being delivered by analytical professions and departmental colleagues.

Analysis Function Standard Assessment Framework

In my previous letter dated 5 October, I noted that Departmental Directors of Analysis were asked to undertake a self-assessment against the standard in 2023, for the first time. This process is a framework designed so that organisations can assess how well they are applying all aspects of the Analysis Function Standard. Consequently, this means that the assessment covers issues beyond analytical capability, such as capacity, governance and structures.

The Cabinet Office mandates that all functions conduct such exercises. The assessments were carried out in Q4 of 2023/24 and we had responses from 21 organisations across government. As the assessment is meant to drive improvements within organisations, only high-level information was returned to the

Analysis Function Central team, under the agreement that these responses would not be shared more widely. The returns showed a mixture picture of strengths and weaknesses across government. The summary information returned has been used

to develop further actions to support organisations in meeting the Analysis Function Standard, for example, setting up sessions to share best practice on key areas of the Standard.

Analytical Capability Audit of Policy Professionals

As part of his review of the effectiveness of government functions in 2021, Lord Maude commissioned a review of the analytical capability of policy professionals. The AF worked closely with the Head of the Policy Profession, Tamara Finkelstein, to identify areas of strength in the analytical capability of policy professionals, as well as development areas for improvement. This work further fostered positive working relationships between analysts and policy makers in government.

The report was completed in summer 2022 and has been well received. It is a key evidence base for the analytical skills development agenda across government, for both policy professionals and more widely across the whole Civil Service. This has led to a more robust analytical capability learning offer for all, ultimately ensuring that officials are more comfortable working with and analysing data when developing and delivering public services. The legacy of this work has been highlighted in core reform activities, such as the One Big Thing initiative in 2023, pushing the analytical capability agenda in government.

Cross Government Evaluation Capacity and Capability Survey

An Evaluation Capacity and Capability survey (ECCS) was conducted in Summer 2023. This was in response to a recommendation in the 2021 National Audit Office report Evaluating Government Spending to enhance the evaluation capacity and capability within government. The survey, conducted by the Analysis Function Central Team, aimed to assess government’s specialist evaluation capacity and capability and develop a plan to address any identified shortfalls.

The survey focuses on key research questions regarding evaluation skills and experience, confidence in applying evaluation-related skills, understanding of evaluation concepts among non-evaluation practitioners, engagement between analysts and non-analysts, and areas for improvement. The results are currently being analysed and associated recommendations developed, in collaboration with the Evaluation Task Force. High level results from the survey will be released through a blog.

We remain aware of, and draw on, the work of others who have influence in this space. This includes the Office Statistics Regulation, whom the Committee heard evidence from on 6 February.

I hope that you find this additional information useful. Please do let us know if we can assist the Committee further on the topic of the Analysis Function, or with any of its other inquiries.

Yours sincerely,

Professor Sir Ian Diamond

Office for Statistics Regulation supplementary evidence to the Public Administration and Constitutional Affairs Committee’s inquiry on Transforming the UK’s Evidence Base

Dear Mr Wragg,

Thank you very much for the opportunity to give evidence to your Committee as part of the Transforming the UK Evidence Base inquiry on 6 February. I enjoyed the session and I hope that you found my evidence useful.

I am writing to provide some supplementary evidence related to comparability of statistics across the UK.

During the session, I set out the expectations we have as the Office for Statistics Regulation for statistics producers on questions of comparability. I emphasised that where there are questions from users around how to compare the performance of public services across the UK, producers in the four nations should recognise and seek to meet that need.

Meeting that need is not straightforward. As I explained, the configuration of public services will probably be different, because of different policy and delivery choices that have been made by the different governments. This is consistent with the concept of devolution, but it does mean that administrative data may be collected and reported on different bases.

However, it is not in our view sufficient for producers to simply argue that statistics are not comparable. They should recognise the user demand, and explain how their statistics do, and do not, compare with statistics in other parts of the UK. And they should also undertake analysis to try to identify measures that do allow for comparison.

A very good example of this approach is provided by statisticians in the Welsh Government. Their Chief Statistician published two blogs on the comparability of health statistics, Comparing NHS performance statistics across the UK and Comparing NHS waiting list statistics across the UK. These blogs recognise the user demand and provides several insights to enable users to make comparisons of NHS performance.

In addition, the Welsh Government’s monthly NHS performance release also highlights what can, and cannot, be compared. For example, it shows that in November 2023, there were approximately 22 patient pathways open for every 100 people, while for England, the figure in November was 13 pathways for every 100 people. More generally, I would commend the Chief Statistician’s blogs as a good example of providing guidance and insight to users across a wide range of statistical issues.

During my evidence session I also mentioned the approach taken by NHS England to highlight the most comparable accident and emergency statistics. NHS England provide a Home Nations Comparison file for hospital accident and emergency activity each year.

More generally, the ONS is leading comparability work across a range of measures. In addition to work on health comparability, they have produced very good analysis of differences in fuel poverty measurement across the four nations.

I hope this additional evidence is useful. I would like to reiterate that these examples show statisticians recognising the core point – that there is a user demand for comparability and that they are taking steps to meet that demand.

Yours sincerely,

Ed Humpherson

Director General for Regulation

Office for National Statistics correspondence to the Work and Pensions Committee on Defined Benefit pension scheme funding

Dear Sir Stephen,

Thank you for your letter of 13 December 2023 regarding Defined Benefit (DB) pension scheme funding. I am delighted to see the Committee’s interest in these statistics, following on from the work we have done to redevelop the survey. To take your questions in turn:

  1. Whether we have anything to add on the reasons identified by the PFF for the divergence between their estimates and on the value of DB scheme assets and those published from ONS’ Financial Survey of Pension Schemes (FSPS).

The current sample used in the survey began being used in Quarter 2 (April to June) 2022. However, as the FSPS is a quarterly survey, we have collected data from these schemes for more recent time periods, with our most recent bulletin covering data for January to March 2023. The FSPS captures data on asset allocations by type of instrument for private sector defined benefit and hybrid pension schemes, including estimates of LDI pooled fund holdings. These are included in the data tables published alongside the bulletin.

  1. Whether we plan on producing estimates of scheme funding levels in the future.

We collect and publish data on total assets, the net derivatives balance and non-pension entitlement liabilities but do not currently publish data on pension entitlement liabilities. We have an established work programme that recognises the demand for increased insight into UK funded occupations pensions and will explore the possibility of publishing these estimates to provide a full picture of scheme funding levels. This data will be subject to quality assurance and disclosure processes which may limit what we are able to publish.

  1. Whether the FSPS is able to estimate how much of the decline in asset values is due to market disruption, rather than a reflection of asset/liability matching strategies.

The FSPS also collects data on transactions, including acquisitions and disposals, realised and unrealised gains and losses by type of instrument, and investment income data which may provide additional insights into the questions asked by the Committee. We will explore the possibility of publishing this data, subject to quality assurance and disclosure processes. The survey does not directly ask pension schemes about their investment strategies.

Please do not hesitate to contact us if there are any further questions.

Yours sincerely,

Rebecca Richmond

Deputy Director, Financial Sector Accounts and Corporations

UK Statistics Authority supplementary evidence to the Public Administration and Constitutional Affairs Committee’s inquiry on Transforming the UK’s Evidence Base

Dear Mr Wragg,

Following the submission of the Office for National Statistics’ (ONS) written evidence to the Committee’s Transforming the UK’s Evidence Base on 31st August 2023, I then gave evidence to the Committee on 5th September 2023. I am now able to provide some supplementary evidence, as requested, on several topics of interest.

The Integrated Data Service (IDS)

As you will be aware, the IDS is a cross-government project, for which the ONS is the lead delivery partner. The project is a key enabler of the National Data Strategy and seeks to securely enable coordinated access to a range of high-quality data assets built, linked and maintained for richer analysis. Please find below some further detail on the background of this project and the progress towards its delivery.

What is the scope of the IDS?

The scope of the IDS is to deliver a secure scalable modern data service which operates on a cloud-native platform, hosting a rich and diverse data catalogue consisting of indexed and linkable data with the latest provision of data science and generative AI potential. The service has been designed to better inform effective policy making.

The vision of the IDS is to address the lack of a central integration platform that can cater for the future needs of both data providers and analysts looking to utilise integrated data to develop cross-cutting analytical results. The IDS builds on the success of the Secure Research Service (SRS) and offers to significantly reduce the time it takes to negotiate and access data and the provision of data assets.

The IDS provides a secure environment that enables streamlined data sharing across government improving the ways that data are made available via cloud native technologies, modernising the way departments and their professionals operate. The IDS is the first of its kind in the UK and will be setting the precedence for how data is being processed on a cloud native platform.

When is it expected to be delivered?

The programme has been in development by the ONS over the last 18 months and is funded until March 2025 (under the current Spending Review). After this date, the IDS becomes a live running service.

What is the cost of the programme?

The programme secured funding from HM Treasury (HMT) until the end of the investment period (financial year March 2024/25). The cost of the programme is estimated to be £228.7m which covers the development and running costs from 2020 – 2025. Furthermore, the programme continues to assess funding options beyond March 2024/25.

Who are the users likely to be?

The IDS is designed for use by accredited analysts, within government and the wider research community. The ambition for the IDS is to have every government analyst, roughly estimated at 14,000 individuals, capable of utilising the platform to better inform decisions for the public good.

What data do you expect to be available on the service?

There are currently 81 datasets available in the IDS from across government. This includes high-value data assets, such as levelling up; climate change and net zero. Additionally, health data assets are underway with identified datasets being indexed by the Reference Data Management Framework (RDMF) – which enables multiple data to be linked and analysed, creating new comprehensive data assets – and published on the IDS so that analysts can link data according to their requirements.

The programme intends to continue to work with data owners across government and the private sector to acquire more datasets in conjunction with the RDMF.  However, this is dependent on data owners signing up to data sharing agreements to make this data available.

In accordance with the Central Digital and Data Office’s roadmap for 2022-25, departments have agreed to share their essential shared data assets across government, including through IDS. This further enables the IDS as a Trusted Research Environment to facilitate and support this commitment.

However, discussions with government analysts have highlighted a range of concerns about how current incentives for departmental data sharing fit with the needs of ministerial-facing departments. There is also a wider financial risk regarding other department’s ability to fund activity such as data cleansing, which may limit their ability to effectively share data. Although HMT set out the expectation that OGDs will support data sharing in all SR21 settlements, no specific funding was provided, which may limit activity in some cases. As part of the IDS Programme, ONS is working with Chief Data Officers across government to minimise frictions around the sharing of data via IDS. One of the pilots in development is looking at Data Ownership and Stewardship approaches to streamline the governance arrangements and make it quicker for departments to agree to share data via IDS, and for analysts to subsequently access that data for a broad range of analysis in the public good. As always, I would welcome support from the Committee to share and promote the benefits of data sharing across government for the public good.

What safeguards will be in place to protect data?

The IDS is a trusted research environment which means it adheres to the 5 Safes in accordance with the Digital Economy Act (DEA); The 5 safes of secure data are as follows:

  • Safe projects – Is this use of the data appropriate, lawful, and ethical?
  • Safe people – Can the users be trusted to use it in an appropriate manner?
  • Safe settings – Does the access facility limit unauthorised use?
  • Safe data – Is there a disclosure risk in the data?
  • Safe outputs – Are the statistical results non-disclosive?

These principles enable the safeguards and governance for the IDS to operate with sensitive data which in turn ensures public confidence in the security and processing of data. Access to the IDS platform is granted via secure gateway in line with the data legislation; furthermore, the IDS utilises strict policies around the cleaning, linkage, validation and controlling data.

The IDS Programme is also working across ONS in the development of key governance through policy creations that will enable safeguards and the appropriate use of data. The policy workstream, which is coordinated by ONS’ Data Governance, Legislation and Policy and Security and Information Management teams, is helping to develop adequate governance for the programme via policy development. In developing safeguards, the programme employs the following principles:

  • Adapting successful policies within the ONS and across government analytical communities (e.g., GSS, GSR, GES) that can support the programme.
  • Working with the National Statistician’s Data Ethics Advisory Committee, which is underpinned by the UK Statistics Authority’s (UKSA) ethics framework for the use of data for statistical, research and analytical purposes, to identify and mitigate any potential ethical risks at project-level.
  • Access to all data are controlled through the concept of a analytical ‘project’, within supporting business and technical processes linked to user need.
  • An overarching programme Data Protection Impact Assessment (DPIA) is maintained to define key activities and associated data risks. Continued engagement with the Information Commissioner’s Office on the DPIA as it is maintained and updated as the programme develops.

The programme also adheres to the UK Statistics Authority/ONS Data Protection Policy (required by the Data Protection Act 2018 and the General Data Protection Regulation).

The ONS website

The Committee also asked for some insight into the current condition of the ONS website and any plans to change the site in the future. Below I have outlined our vision for dissemination, of which our website is an integral part, as well as some exploratory work we are undertaking to see how we could use AI technology to address some of the challenges with our existing website.

Our Vision for Dissemination

The ONS website supports the Statistics for the Public Good strategy by helping to build trust in evidence, enhance understanding of social, economic and environmental matters and improve the clarity and coherence of our communication. By helping people to be aware of the ONS and to find, understand and explore our data, statistics and analysis we are giving people the information they need to make decisions, and act, at a national, local and individual level.

Our vision for statistics dissemination goes beyond the website. We want people to have trust in our data and analysis. We know that our users want to find trusted ONS information wherever they look – whether that’s on the ONS website, on social media, in the media or through search engines. Our users want ONS answers to their questions and we are exploring a range of different approaches to serve this need, including providing answers to questions using Large Language Models (LLMs).

Our goal is for users to understand our data, statistics and analysis more quickly and easily, with the right contextual information to help people know how they can use them. We want our users to explore and tailor our information so they can find what is important to them – whether that is by creating their own datasets based on ONS data or through our expert curated view of key insights for the economy or society.

Our priorities for the website in recent years have been delivering the capability to support census 2021 outputs and the reliability of the service to all our users, particularly in response to the additional demand for ONS data on the economy, in response to changes in the cost of living. We’re currently running a package of work to address and improve website performance to meet demand and our next priority will be programmatic access to our data via application programming interfaces (APIs). This will improve the agility of all users of our data, both internal and external, to consume and gain insights from the ONS website.

We have also focused on improved search both on the ONS website and through greater visibility of our data and insight in search engines and in the media.

This year we are also setting the future direction for how we create and manage our statistical content in a more efficient and structured way to enable business agility and flexibility for our users, aligned to their broad range of needs. This will set out a forward plan to transform ONS data and insight and will make the case for the additional funding needed to deliver on our ambitions.

StatsChat

Additionally, the ONS Data Science Campus are currently exploring how new tools and technology can help the organisation disseminate information more effectively. We have developed a new product, ‘StatsChat’, that uses LLMs to search and summarise text from across our website, and present relevant sections of our web pages to user’s natural language questions.

We are aiming to make this available to a small selection of users for testing and fine-tuning, so that we can improve the relevance of the responses and provide assurance from a data ethics, data protection and security perspective.

Stakeholder engagement

The ONS conducts a wide range of user and stakeholder insights, consultations and listening exercises. This engagement is essential as it provides us with actionable insights on users’ and stakeholders’ views on the strength of their relationship with the ONS, feedback on its outputs, and on how stakeholders access and use our statistics and analysis.

As part of this, the ONS’s Engagement Hub conducts annual stakeholder ‘deep dive’ research and an annual stakeholder satisfaction survey. I understand the Committee is interested in understanding more about these exercises and insights from recent examples.

The deep dive research is conducted through in-depth interviews with senior representatives from around 45 key stakeholder organisations. The stakeholder satisfaction survey is an online questionnaire aimed at a wider range of users from a variety of sectors and roles to provide broader insight. Deep dive participants include those from central and local government departments, devolved administrations, research institutes, think tanks, public bodies such as NHS England and the ICO, international partners, business representative bodies and charities. The stakeholder satisfaction survey reaches similar types of organisations, with a wider range of responses at senior manager, operational, public affairs, analyst, researcher, policy maker and economist levels.

Deep dive interviews took place in summer 2022 and the findings were positive. Many stakeholders said that the organisation had built on and maintained its reputation for independence, trustworthiness, quality and reliability. They also felt that the ONS had developed its reputation for being flexible, agile and responsive to changing needs. Additionally, the ONS was seen to be working more collaboratively with policymakers than it had in the past.

The stakeholder satisfaction survey was conducted in early 2023. It found respondents to be positive across key sentiment measures on trust, quality, and on the ONS producing statistics which are relevant to issues of the day. There were also positive views expressed about the ONS as an organisation with reliability, responsiveness, and willingness to help being cited. It was also noted that ONS staff were knowledgeable and helpful.

There were areas highlighted for improvement in both the stakeholder deep dive and satisfaction survey. These included how the ONS works with both devolved governments and heads of the statistical profession in government departments; improving the ease of finding the right people to speak to in the organisation; and more regular, strategic overviews of the ONS’s work (for stakeholders to be able to connect different topics better). Some participants referenced a need for further scrutiny to understand some data anomalies which had occurred in mid-2022.

These findings are shared throughout the ONS, including with the National Statistician’s Executive Group, and are used to inform planning and prioritisation. We have implemented measures to respond to the issues raised as part of a wider programme of ongoing external affairs improvements, which we continue to monitor with further research.

The ONS conducted a subsequent stakeholder deep dive in autumn 2023 and are currently analysing the findings. The latest ONS annual stakeholder satisfaction survey is currently live and will be open for responses until 22 January 2024.

Full business case on population and migration statistics improvements

As you are already aware, next year I will be making a recommendation to Government on the future of the population and migration statistics system in England and Wales. I understand that the Committee has requested some additional detail surrounding the financial aspects of this transformational work.

In the outline business case for the Future of Population and Migration Statistics programme, initial cost estimates of a potential census in 2031 range from £1.3 billion to £2 billion, with increases expected across all phases of such an operation.

The ONS is working to produce a full business case (FBC) for our proposals to improve our population and migration statistics. The FBC will be developed in the context of the forthcoming recommendation to UK Government, and the response from Government. At this stage, while the recommendation remains in development, it is difficult to provide an accurate updated estimate of cost.

The FBC is expected by HM Treasury in late 2024. We will be able to provide the Committee with further information on costs at a later date.

Migration statistics

As part of improving population statistics we are also transforming international migration statistics. Our latest estimates, year to June 2023 are official statistics in development and are provisional. We revised our June 2022 and December 2022 estimates upwards due to a combination of more data and methodological improvements.

International migration estimates are produced using three key sources: Home Office border data linked to a person’s travel visa for non-EU nationals, which made up 82% of total immigration in 2023; tax and benefit data (known as RAPID) for EU nationals; and International Passenger Survey data for British nationals. We are most confident with Home Office border data and have an ambition to produce all migration statistics from these data in future.

We work very closely with Home Office to procure and use border data linked with visa data to produce migration estimates. The ability of free movement for British nationals and some EU and non-EU nationals makes the current method a challenge for those that don’t require visas. However, there is further data held by the Home Office, known as Advanced Passenger Information, that would help with our research, particularly for British nationals. We have requested these data and would like to see Home Office accelerate this request.

Census 2021 data confirmed our position that the administrative data we use for non-British nationals is robust and that the international passenger survey data does not measure actual migration patterns well due to people changing their intentions. Rather than rebasing once a decade, following a decennial census, to correct for any drift in our population estimates, we aim to produce statistics that do not ‘drift’ from the truth. Our Dynamic Population Model based population statistics show how drift in both population and migration statistics can be mitigated. That does not remove the need to revise estimates as the data and methods mature.

Long-term international migration uses the UN definition of a migrant, that is someone that changes their country of residence for 12 months or more. To produce timely estimates, we therefore have to make assumptions based on previous behaviour. As more time passes, we are able to update those assumptions with data of actual travel. We therefore become more confident in our estimates over time. For example, our June 2022 estimates now have complete data to show if a migrant has stayed or left for 12 months and we therefore have less uncertainty around those estimates compared to the provisional June 2023 estimates.

We have recently published experimental uncertainty measures for our admin-data based migration estimates for the first time. These show our users how our confidence increases once we have complete data that meet the required definition.

We also described the nature of provisional estimates that are subsequently revised and the reasons behind these revisions. This was picked up and presented accurately in the media and in playing back conversations with our core users. The Office for Statistics Regulation (OSR) recently published a review of their recommendations on migration statistics. The OSR considered we sufficiently described uncertainty to our users, although we recognise these are experimental and will continue to update our users as they develop.

I hope that you find this additional information useful. Please do let us know if we can assist the Committee further on any of the issues discussed in this letter, or with any of its other inquiries.

Yours sincerely,

Professor Sir Ian Diamond

Office for National Statistics written evidence to the Women and Equalities Select Committee’s inquiry on the impact of the rising cost of living on women

Dear Ms Nokes, 

 I write in response to the Women and Equalities Select Committee’s call for evidence for their inquiry into the “Impact of the rising cost of living on women”.  

As the Committee is aware, the Office for National Statistics (ONS) is the  

largest producer of official statistics in the UK. We aim to provide a firm evidence base for sound decisions and develop the role of official statistics in democratic debate. As the UK’s National Statistical Institute, the ONS produces a wide range of economic and social statistics, including the latest data and trends about the cost of living and how this is affecting people in the UK.

 Since UK consumer price inflation peaked in October 2022, the cost of living in the UK has been fluctuating. To assist the Committee in understanding how these changes have impacted women, we have prepared a written evidence submission that provides a broad overview of the major after-effects of changes to the cost of living in the UK. This includes looking at the main drivers of rising inflation, food and beverage costs, energy costs, rental prices, among others.  

 This submission also details how data collected in the Opinions and Lifestyle Survey shows women are more likely than men to report difficulties in paying their energy bills and the unlikelihood that they will be able to save money in the future. Alongside this, we have provided analysis of the regional and national differences in how the cost of living has changed in recent months, as well as specifically looking at how those from the lowest income households have felt the effects. 

Changing cost of living

UK consumer price inflation (the rate at which prices faced by consumers change) began accelerating in Spring 2021 and peaked to a 40-year high of 9.6% in October 2022. Although rates are now falling, they have remained high in the year since. In the year to September 2023 the Consumer Prices Index including owner occupiers’ housing costs (CPIH)was 6.3%, the lowest rate since March 2022.

The main drivers of rising inflation over the last two years have included food and non-alcoholic beverages, housing and household services (including rental costs and household energy costs), and transport (including fuel costs).

For food and non-alcoholic beverages, the annual inflation rate to peaked at 19.2% in March 2023, the highest rate in over 45 years. Since then, the annual rate has eased for six consecutive months. Food and non-alcoholic beverage prices showed the first month-on-month price reduction in September 2023.

Annual inflation for motor fuels has been negative since March 2023 reflecting the fall in fuel prices from a peak last year, but the drag on headline inflation has eased as fuel prices levelled off and then started to pick up. The price of motor fuels fell by 9.7% in the year to September 2023, compared with a fall of 16.4% in the year to August, reflecting falling petrol and diesel prices over the last year.

Gas and electricity prices rose at 1.7% and 6.7% respectively in the year to September 2023. Between June and July 2023, gas prices fell at record rates of 25.2%. This was largely because of the lowering of the Office of Gas and Electricity Markets (Ofgem) price cap in that month.

Private rental prices paid by tenants in the UK have risen by 5.7% in the 12 months to September 2023. Recent analysis showed that private renters on a median household income could expect to spend 26% of their income on a median-priced rented home in England, compared with 23% in Wales and 25% in Northern Ireland, in the FYE 2022. Comparatively, housing purchasing affordability analysis has shown a clear pattern of house prices increasing faster than incomes and UK inflation. In the FYE 2022, for homes in England, average house price to household income ratio was 8.4 (meaning 8.4 years of median income to afford median house price) compared to 6.4 in Wales, 5.3 in Scotland and 5.1 in Northern Ireland.

The annual growth for regular pay (excluding bonuses) was 7.8% in June to August 2023, according to the latest earnings data. This is similar to recent periods and one of the highest annual growth rates since comparable records began in 2001. In real terms (adjusted for inflation), regular pay rose by 1.1% on the year.

The gender pay gap, measured using the Annual Survey of Hours and Earnings (ASHE), has been declining over time, and in April 2023 stood at 7.7%. The gap for full time employees is larger for those aged over 40, and for skilled trades occupations (15%) followed by process plant and machine operatives (14.3%). The gender pay gap is higher in all English regions than in Scotland (1.7%), Wales (5.6%) or Northern Ireland (negative 3.5%).

Insights from the Opinions and Lifestyle Survey

The ONS has published a variety of analysis on the impact of the rising cost of living across a range of personal characteristics including sex.

Most recently, the latest article in the roughly quarterly series, Impact of increased cost of living on adults across Great Britain, provided information from the ONS’s Opinions and Lifestyle Survey (OPN) during the period February to May 2023. The article detailed the proportion of adults in Great Britain reporting an increase in their cost of living, the actions they are taking as a result, or the proportion of adults experiencing difficulty affording household expenses (such as energy, rent or mortgage payments or food), by personal characteristics including sex, (see tables 1.1, 2.1, 3.1 and 4.1), household size (tables 1.12, 2.12, 3.12 and 4.12), parental status (tables 1.11, 2.11, 3.11 and 4.11) or region (tables 1.3, 2.3, 3.3 and 4.3).

Estimates in these tables show for example, that women (50%) appear more likely to report it was difficult (very or somewhat) to afford their energy payments than men (45%) and appeared less likely to report thinking they will be able to save in the next 12 months (36% among women, 44% among men).

Considering impacts on other groups of the population likely of interest to the committee, these estimates also show that whilst around 1 in 20 (5%) adults reported that in the past two weeks they had ran out of food and had been unable to afford more, this proportion appeared higher among groups including those; receiving support from charities (45%), living in a household with one adult only and at least one child (28%), receiving some form of benefits or financial support (21%), Mixed or Multiple ethnicity adults (14%), Black, African, Caribbean or Black British adults (13%), renters (14%) and disabled adults (9%).

Looking at regional differences amongst people with these and other characteristics has not been examined using this data source due to sample sizes being too small at this level of geography.

Regional and national differences

The ONS has published a variety of subnational statistics that reflect the geographic differences and the impact of the changing cost of living. Subnational data on this topic has largely focussed on housing, energy insecurity and food insecurity.

The latest article on private housing rental prices showed that prices paid by tenants has varied by English region and UK nation. Private rental prices in Northern Ireland increased by 9.3% in the 12 months to July 2023. This is higher than for other UK countries during the same period when prices rose by 5.2% in England, 6.5% in Wales and 5.7% in Scotland.

In the 12 months to September 2023, private rental prices rose by 5.6% in England, 6.9% in Wales and 6.0% in Scotland. Amongst the English regions, London’s annual rent price inflation was 6.2% in the 12 months to September 2023. This was the highest annual increase across the English regions. This was followed by the West Midlands where annual rent inflation (5.7%) was also above the England average annual rise (5.6%). The North East had the lowest annual increase at 4.7% during the same time period.

The ONS has also published recent analysis on monthly repayments for newly issued mortgages over the past year, because of rising interest rates increasing the cost of borrowing. The analysis is based on some key trends from our mortgage repayments calculator tool and includes variation across English regions and UK nations. Although mortgage rates differ, depending on the size of the loan relative to the value of the property being purchased, house price differences between regions has meant that increases to monthly mortgage payments have varied. In particular, London’s higher house prices have resulted in the largest monthly cost increases. Conversely, Northern Ireland’s lower house prices have resulted in the smallest nominal increases to monthly repayments.

In February 2023, the ONS published analysis on the characteristics of adults experiencing energy food insecurity in Great Britain. Adults in the North East, the East of England, and the North West were all more likely to report that they had experienced food insecurity than those living in London. The analysis also showed that there was no geographic difference between adults reporting some form of energy insecurity.

Impact on lowest income households

Between the FYE 2021 and FYE 2022, median household disposable income for the poorest fifth of the population decreased by 3.8% to £14,500; compared to 1.6% increase for richest fifth. The largest contribution to change in disposable income across all households is attributable to original income, driven by a decrease of 4.0% in the poorest fifth of people, compared with an increase of 5.4% in the richest fifth of people.

More specifically, the poorest fifth of people saw a 7.5% decrease in wages and salaries, while the richest fifth saw a 7.8% increase, and a UK wide increase of 3.2%. For the poorest fifth of people, income was further reduced by a real-term reduction in cash benefits of 2.6% (a nominal £80 increase) between FYE 2021 and FYE 2022, which was not fully offset by a reduction in taxes.

Table 1 shows the equivalised (accounting for household composition) household disposable incomes for some groups, as published within the Effects of Taxes and Benefits release. For non-retired one adult households (without children), where the household reference person was a woman, the mean household disposable income was significantly below the UK average. The disposable household income for non-retired one adult households with children was significantly below the mean UK average, however this group is not routinely split by sex of the household reference person. For retired one adult households (both with and without children), where the household reference person was a woman, the mean household disposable income was significantly below the UK average.

Table 1: Annual equivalised (accounting for household composition) household disposable income by household composition, UK, Financial Year Ending 2022

Equivalised Household disposable Income (£)
UK MeanOne adult household (all)One adult household (women)One adult household (men)
Non-retired Households (with and without children)41,200
Non-retired households (without children)39,50036,50041,800
Non-retired households (with children)23,100
Retired households (with and without children)30,90026,70025,00030,100

When comparing spending by the poorest fifth to the richest fifth for FYE 2022, the richest fifth of households’ total weekly expenditure was more than twice that of the poorest fifth of households (£811.20 and £329.80, respectively) . In comparison, mean household disposable income was six times greater in the richest fifth of households than the poorest fifth. The poorest fifth of households continued to spend the greatest proportion of their total expenditure (25%) on housing (net), fuel and power. This is largely because of spending on actual rentals for housing (24% of their total expenditure). Note, housing (net) does not include mortgage payments, this is because mortgage capital payments are not regarded as a consumable item in line and instead add to personal wealth, while interest payments are classified as “other” expenditure, in line with international standards.

We hope this provides some interesting insights for you and the rest of the Committee. Please do not hesitate to let us know if we can provide anything further.

Yours sincerely,

Mike Keoghan

Deputy National Statistician for Economic, Social and Environmental Statistics