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

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 submission to the Women and Equalities Select Committee inquiry into 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

Office for National Statistics written evidence submissions to the Public Accounts Committee inquiry into Homes for Ukraine

Dear Dame Meg Hillier,

I write in response to the Public Accounts Committee’s call for evidence for their inquiry into Homes for Ukraine.

As the Committee will be aware, the Office for National Statistics (ONS) is the UK’s National Statistical Institute and largest producer of official statistics. We aim to provide a firm evidence base for sound decisions and develop the role of official statistics in democratic debate. This submission provides evidence from our Homes for Ukraine Survey, which we hope will be of assistance to the inquiry.

Evidence in this submission includes information on receipt of ‘thank you’ payments and the cost-of-living pressures on ability to provide support. Data on hosting duration and intended length of hosting shows that many hosts are providing longer-term accommodation, not just short-term emergency housing. While supporting guests search for their own accommodation, many hosts have experienced difficulties related to unaffordability of housing and lack of a guarantor. Satisfaction with support provided on the scheme to sponsors is quite high but over half have still found hosting challenging.

Background to the Survey


The ONS established the Homes for Ukraine Survey to address a lack of data about the characteristics, motivations, and attitudes of scheme hosts. This complements administrative data available from the Home Office, including arrival numbers. The ONS worked closely with the Home Office and the Department for Levelling-up, Housing and Communities (DLUHC) to ensure delivery of timely and relevant analysis on this subject. ONS has consulted and shared its analysis with departments across government.

There have been three ONS-funded sponsor surveys collecting information from registered sponsors:

  • Survey 1 collected information 7 to 14 July 2022 (around 4 months since the scheme launched) from sponsors registered by 7 July 2022. It captured fundamental information from 17,702 sponsors early in the scheme.
  • Survey 2 collected information 21 to 28 November 2022 from 8,770 sponsors recontacted around 4 months since their first survey, with many approaching the end of the initial 6-month hosting period. This followed-up with sponsors to capture changing experiences, focus deeper on urgent issues, and inform evolving policy needs.
  • Survey 3 – collected information 10 to 21 August 2023 from sponsors registered by 8 August 2023. This captured information from 14,851 sponsors, some of whom had been surveyed before.

Analysis of the experiences of displaced Ukrainians who have entered the UK under the Ukrainian Humanitarian Schemes is published in the UK Humanitarian Response Insight Survey series. Generally, this analysis does not distinguish between type of visa scheme so is not included in this written evidence unless specified otherwise.

Most of the evidence presented in this submission is from the most up-to-date sponsor survey, Survey 3 (10 to 21 August 2023). Reference is made to previous surveys only where specified.

Funding provided for the scheme

Sponsors are eligible for a monthly payment from the UK government as a thank you for hosting and some English councils offer discretionary payments to ‘top-up’ thank you payments.

Payments to sponsors – monthly “thank you” payments

Data collected from Survey 3 showed 88% of current hosts reported having received ‘thank you’ payments; 67% received these on time and 21% had received payments but some monthly instalments were either late or missing. Some had not received payments (12%), but for most this was because the first payment was not yet due (5%).

After guests have been hosted in the UK for more than 12 months, monthly ‘thank you’ payments increase from £350 to £500. The following estimates on this page refer to data collected from hosts from Survey 3 in England only.

Most (72%) current hosts were aware of the increase in ‘thank you’ payments. Around 6 in 10 current hosts (64%) strongly or somewhat agree that this increase in payments encouraged them to host for longer. The majority (78%) are very or fairly satisfied with the engagement on the ‘thank you’ payments with their local council since their guests moved in.

Payments to sponsors – top-up “thank you” payments

Data collected from Survey 3, showed nearly half of current hosts in England (46%) received a discretionary top up payment from their local council. Over half (58%) of these said that this has incentivised them to continue hosting.

The English region with the highest proportion of current hosts who had received discretionary top up payments is the South East (66%), compared with the lowest proportion in the North East (9%).

Challenges and future risks

Sponsors are asked to host their Ukrainian guests for a minimum of 6 months. Early on there was some concern among members of the cross-government Russia-Ukraine Analysis Group (RUAG) that after 6 months many sponsors could stop hosting, causing Ukrainian guests to require alternative accommodation. However, data provided from the most recent and previous surveys suggested this risk was lower than first thought.

Hosting duration

Data collected from Survey 3 showed that most hosts (58%) were providing longer-term accommodation until their guests find alternative accommodation and 37% of hosts were providing more permanent accommodation. Only 3% described their hosting arrangement as short-term emergency accommodation.

Analysis from the UK Humanitarian Response Insight Survey (27 April to 15 May 2023) found most adults on the Homes for Ukraine scheme were very or fairly satisfied with their current accommodation (92%). This compares with 87% of adults on the Ukraine Family scheme.

Data collected in Survey 3 showed almost half (48%) of current hosts had been providing accommodation for guests for 12 months or more. Almost a third (31%) had been providing accommodation between 6 and 12 months. A similar proportion of current hosts had been providing accommodation for 3 to 6 months (10%) and less than 3 months (11%).

Hosting intentions

Analysis of data collected from Survey 3 revealed variation in how long current hosts intend to provide accommodation in total. Just over half (51%) reported 18 months or more, compared with 5% who intended to host for less than 6 months.

For the 5% of current hosts who intend for their current hosting arrangement to last under 6 months, the most common reason reported for the length of time was that they only intended to provide sponsorship for this period (25%).

For the 51% of current hosts who intend the current hosting arrangements to last 18 months or more, the most common reason reported for the length of time was that sponsors have built a strong relationship with the guests (67%).

An increase in value of monthly ‘thank you’ payments (54%) would encourage current hosts to continue to provide accommodation beyond their current intended period. However, 1 in 10 current hosts reported that “nothing” would encourage them to host for longer (10%).

Of those who don’t know how long they intend their current hosting arrangement to last (19%), the majority (72%) reported it was because they are unsure what their guests will want to do. Other reasons include needing more information on how extending sponsorship will work (24%).

Challenges helping guests access alternative accommodation

Data collected from Survey 3 showed that of those who are currently hosting guests and have helped them look for private rented accommodation, the majority (69%) reported experiencing barriers during the search. The most common barriers were that “Guests cannot afford to rent privately” (66%) and “Guests cannot provide a guarantor” (50%).

When asked what support they think guests need to help them move into private rented accommodation, or to find independent living arrangements, the most common types of support reported by sponsors were:

  • General information on how to rent in the UK (77%)
  • Financial support (77%)
  • Employment support (66%)

Difficulties experienced during scheme involvement

Current hosts were asked whether they experienced any difficulties during their involvement in the scheme. Data collected in Survey 3 showed that around 7 in 10 (72%) of hosts reported experiencing difficulties.

The difficulty most reported was uncertainty about what will happen to guests after sponsorship ends (38%), followed by difficulties when helping guests with visa applications (25%) and then sponsor application difficulties (19%).

Of the 15% of current hosts who reported difficulties helping guests register with GPs or NHS services, the most common difficulties experienced were the “availability of local services” (74%) and “appointment wait times” (35%).

Interpersonal challenges between guests and hosts

Data collected from Survey 3 showed almost 6 in 10 (58%) current hosts found aspects of hosting challenging.

A quarter (25%) of current hosts reported language barriers as a hosting challenge. Cultural differences between themselves and their guests (16%) and sharing a living space (15%) also made hosting challenging.

Satisfaction with scheme support

Data collected from Survey 3 showed that, of current hosts, previous hosts or those who have guests due to move in, over 6 in 10 (66%) are very or fairly satisfied with the overall support they were offered as a sponsor.

Data collected from Survey 2 suggests just over half of sponsors involved in the scheme were very or fairly satisfied with the management of the scheme (53%) and the communications for the scheme (52%)

Data collected from Survey 3 showed around 6 in 10 sponsors (59%) found accessing information or support regarding the Homes for Ukraine scheme very or fairly easy. This increased from 45% reported in Survey 2 data.

Data collected from Survey 3 showed of current hosts, previous hosts and those who have guests due to move in, most (91%) thought additional support would be useful for sponsors or hosts.

The types of additional support which they reported would be useful included:

  • support with helping guests find employment (46%),
  • support with administrative tasks for guests (45%)
  • support with helping guests find their own accommodation (42%).

Cost of living pressures

Data collected from Survey 3 showed the majority (67%) of current hosts said that the rising cost of living is affecting their ability to provide support.

The most reported additional costs incurred for current hosts were utility costs, such as the cost of fixing things around the property (85%), food costs (46%) and transport costs (45%).

We hope this submission is useful for the Committee’s inquiry. Please let us know if we can provide anything further.

Yours sincerely,

Mike Keoghan

Deputy National Statistician for Economic, Social and Environmental Statistics

UK Statistics Authority correspondence to the Public Administration and Constitutional Affairs Committee on the Office for National Statistics’ work on the Labour Market

Dear Mr Wragg,

I am writing to update the Committee on the Office for National Statistics’ work on the Labour Market.

As you will be aware, due to quality concerns, the ONS suspended publication of the Labour Force Survey (LFS) estimates element of the wider Labour Market release in October. Instead, to provide users with our best assessment of the labour market we produced indicative experimental estimates of the headline employment, unemployment and inactivity rates. These were produced using the most robust administrative data sources available to us. For employment, we used payroll data from HMRC’s Real Time Information system, applying the growth rates of that data to the LFS for April to June 2023. Likewise, we used Claimant Count data for unemployment.

Today we have published a development plan for the LFS. This will focus on work to increase the number, and diversity, of the responses to the LFS and on improved methods to better account for non-response and bias. We will also update the population figures used in the Labour Market estimates which is another important improvement. With this work in train, we are aiming to reintroduce LFS estimates in the Labour Market release on 12 December.

In parallel, we will continue our work to transform this key survey. Alongside the LFS, we currently also have the transformed LFS in the field. This has a sample size that is three times that of the current LFS and has an on-line first mode of collection supported by telephone and face to face interviewing, to help ensure a higher and more representative response. We are doing some final fine-tuning to the questionnaire and expect to fully transition to this new survey in March 2024.

I do hope that you find this update helpful but please do let me know if you have any other questions about this topic, or if we can be of assistance to the Committee on any other matter.

I am also copying this letter to Harriett Baldwin MP, Chair of the Treasury Committee and The Lord Bridges of Headley MBE, Chair of the Economic Affairs Committee as their specialists were recently briefed on this matter by members of my team.

Yours sincerely,

Professor Sir Ian Diamond

Office for National Statistics correspondence with the Environmental Audit Committee on Green Jobs

Dear Mr Dunne,

I am writing to you and the Committee to provide an update on recent and upcoming Office for National Statistics’ (ONS) environmental work. This includes work on the UK natural capital accounts, potentially useful background for the Committee’s “role of natural capital in the green economy” inquiry, as well as measuring green jobs, greenhouse gas emissions, and other environment-related publications.

Measuring green jobs

In our March 2023 green jobs update, we outlined our proposed definition, developed through extensive stakeholder engagement: “Employment in an activity that contributes to protecting or restoring the environment, including those that mitigate or adapt to climate change.”

Our September 2023 release, “Experimental estimates of green jobs, UK: 2023”, provided our first estimates of green jobs in the UK, with indicative estimates using three bases – industry, occupation, and firm.

We are continuing to develop the measurement of green jobs, towards increasing timeliness and accuracy, thus enhancing the evidence base on this important issue.

Greenhouse gas emissions (residence based) estimates

On 9 October 2023, we published the latest UK environment accounts, including provisional estimates of greenhouse gas emissions on a residence-basis for 2022, alongside air pollution figures.

In July 2023, we published our first experimental estimates of quarterly UK greenhouse gas emissions on a residence basis, up to Quarter 1 (January to March) 2023. We will be publishing further estimates, up to Quarter 2 (April to June) 2023, on 3 November. We use modelling techniques to provide more timely statistics alongside our annual estimates. While these estimates are different to territorial measures (emissions that occur within the UK’s borders) used to monitor UK emissions targets, produced by the Department for Energy Security and Net Zero, as they are residence-based, they are comparable with a range of important economic statistics, including gross domestic product (GDP).

Natural capital accounts

We produce the UK Natural Capital Accounts, which monitor the changing capacity and demand for natural resources and the benefits they provide.

Widely regarded as world-leading, these accounts are produced on a consistent basis with the System of National Accounts (SNA) used to produce Gross Domestic Product (GDP), and so help to understand the links between the environment and economic statistics. As they are produced to UN standards and guidance, they are also broadly internationally comparable.

We have continued to develop our methodology, updating the “Principles of UK natural capital accounting” in June, outlining how we interpret and apply international guidelines to the UK context.

We published the latest urban habitat accounts in September.  A summary of the latest UK natural capital accounts was also published in the Blue Book 2023 on 31 October, ahead of the full accounts being published in November. We have previously produced stand‑alone accounts for Scotland and England, and November’s release will feature breakdowns for all four UK nations for the first time.

Additionally, these natural capital accounts are an important element of our work to better understand inclusive wealth, the concept proposed in the HM Treasury-commissioned Dasgupta Review of the Economics of Biodiversity.

Businesses

We are also regularly using our Business Insights and Conditions Survey (BICS) to understand business responses to environmental issues.

In the period 7 to 20 August 2023, we asked UK businesses about climate change, finding 39% to be “very” or “somewhat concerned”, 44% “not concerned” and 17% “not sure”.

In terms of actions, 7% of businesses reported monitoring climate related risks, 4% having a climate change strategy, 3% having a greenhouse gas emissions target and 1% having a target that includes the supply chain. We also found that 3% of businesses reported monitoring nature or biodiversity risks, and 2% having a nature or biodiversity strategy.

In the period 24 July to 6 August 2023, 75% of businesses reported that they had not assessed the risks of any of the specified climate change effects (water scarcity, coastal erosion, increased flooding and temperature increases).[2] Of those that had assessed these risks, 28% had not taken any action, 18% did not expect to be impacted, while 18% reported they had been unable to take action either because of costs, or the lack of information or guidance.

Our BICS release, scheduled for 16 November[3], will look at barriers to business actions and whether climate change impacts are considered in businesses investment plans.

Individuals

We also continue to publish fortnightly statistics about issues of concern in Public Opinions and Social Trends.

The issue for the survey period 4 to 15 October 2023 found that, when asked about the important issues facing the UK today, the fourth most commonly reported issue was “climate change and the environment”, by 62% of adults in Great Britain.

We are planning further insights on public perceptions to the environment in the coming months. Our next update to our measures of national well-being dashboard, which includes a measure tracking pro-environmental lifestyle changes to tackle environmental issues, is on 10 November 2023.

Other relevant publications

We published “Climate-related mortality, England and Wales, 1988 to 2022” as experimental statistics in September, showing an estimated 4,507 deaths associated with the hottest days in England in 2022.

Our annual energy efficiency of housing release was also published on 1 November. We are also looking at the feasibility of linking energy performance certificate data to Census data to understand more about the households in high and low-rated energy efficient properties.

We would be happy to brief the Committee further on any aspect of our work if helpful.

Yours sincerely,

Mike Keoghan

Deputy National Statistician for Economic, Social and Environmental Statistics

UK Statistics Authority follow-up written evidence to the Public Administration and Constitutional Affairs Committee’s inquiry on Transforming the UK’s Evidence Base

Dear Mr Wragg,

When giving evidence to the Public Administration and Constitutional Affairs Committee on 5 September 2023, I promised to follow-up on a couple of points with various members of the Committee.

GDP Revisions

Firstly, I agreed to let you know if I was aware of similar revisions happening in other comparable countries.

As I outlined in the Financial Times recently, The UK’s official economic statistics are rightly seen as among the world’s best. This includes the recent upgrade of our official estimates for economic growth in the pandemic years of 2020 and 2021. The latest Organisation for Economic Co-operation and Development (OECD) information shows that the UK is one of the first countries in the world to estimate the 2020 and 2021 coronavirus (COVID-19) pandemic period through the detailed Supply and Use framework. This standard economic framework enables us to confront our data at a much more granular level for products and industry. The OECD provides a real-time vintages of GDP database in their main economic indicators, which takes data directly from the National Statistics Institutes.

Each country will follow different revision policies and practices, which can result in their estimates being revised at a later date, according to their own needs. The timing and impact of revision changes will depend on data availability and magnitude, with large annual structural surveys being the data source needed to make detailed product and industry changes. These annual data sources come with lags on timeliness, often being available up to 2 or 3 years later.

We have now seen revisions to GDP estimates published by other countries. As we previously announced, the 2021 GDP estimates for the UK were revised to 8.7 percent growth from our initial estimate of 7.6 percent growth, a revision of +1.1 percentage points. The Spanish Statistical Agency has now published 6.4 percent growth in GDP for 2021, compared with the previous estimate of 5.5 percent, a revision of +1.1 percentage points. The Netherlands have now published 6.2 percent growth for 2021, revised from an initial estimate of 4.9 percent, a revision of +1.3 percentage points. Italy, have now published 8.3 percent growth for 2021, revised from an initial estimate of 7.0 percent, a +1.3 percentage point revision. All are a similar magnitude upwards revision for 2021 as observed in the UK context. Conversely, the United States have now published 5.8 percent growth for 2021, compared to a previous estimate of 5.9 percent growth, a revision of -0.1 percentage points [ONS own calculations based on published US data from www.bea.gov]. This highlights that revisions can differ across countries.

Strengthening the Analysis Standard

Secondly, I promised to examine whether there is a case for strengthening the Analysis Standard. I am passionate about ensuring the robustness of the Analysis Standard and welcome the committee taking an interest its strength and its application across Government.

The Analysis Function Standard, which was updated earlier this year, is part of a suite of management standards that promote consistent and coherent ways of working across government, and provides a stable basis for assurance, risk management and capability improvement.

In my letter to you of 18 September regarding the Committee’s report‘Where Civil Servants work: Planning for the future of the Government’s estates’, I emphasised my work to promote transparency in Government Analysis through my role as Head of the Analysis Function. I am keen to take every opportunity to champion the Standard across government and will reiterate the importance of this area at October’s Heads of Function board meeting.

The Standard is very clear on expectations about transparency in the commissioning, production and publishing of analysis. It also has clear messaging about compliance to the Code of Practice for Statistics and other official guidance for the remaining analytical professions including the Aqua, Green and Magenta books.

It is my expectation that all departments closely follow the principles in these sets of guidance and through the Analysis Function Standards Steering Group we monitor and scrutinise these documents to ensure their continued effectiveness.

For the first time this year, all Departmental Directors of Analysis undertook a self-assessment against the Standard and in response to this we are staring a series of action groups to drive improvements, including in Departments compliance to official guidance.

I will keep the Analysis Function Standard under close review and, where necessary, strengthen the messages in it.

Please do let us know if any other questions, and if we can help the Committee further on either of these topics or any of its other inquiries.

Yours sincerely,

Professor Sir Ian Diamond

Office for National Statistics correspondence to the Welsh Affairs Committee on the defence industry in Wales

Dear Mr Crabb,

I was glad to host the Welsh Affairs Committee at our Newport office on 13 July 2023.

During the visit, a member of the Committee mentioned your inquiry into The Defence Industry in Wales. I am delighted to provide the annexed briefing with additional information relating to the economic activity of the defence industry within Wales, to support the inquiry.

I hope that this is helpful and please do not hesitate to contact us if there is anything further we can assist with.

Yours sincerely,

Mike Keoghan

Deputy National Statistician for Economic, Social and Environmental Statistics

 

Defence Industry in Wales

 

Research and Development

There is no data available on defence industry expenditure on Research and Development (R&D) in Wales. The experimental Wales public-funded gross capital and non-capital expenditure on R&D was £361 million (£46 million in-house performed R&D and £315 million purchased or funded R&D) during the financial year ending 2021.

While the Business Enterprise Research and Development survey collects data on defence R&D, it does not break this down regionally. Analysis suggests that due to the small number of businesses that perform R&D on defence specifically in Wales, estimates would not meet ONS disclosure methodology and therefore could not be published at that level.

Night-time economy

The percentage of night-time workers (people who either work during the evening or night) in the public, administration, defence and the compulsory social security sector was 1.6% of the entire UK workforce in 2022 (equivalent to 6.9% of all night-time workers).

In general, 30.5% (435,000) of workers in Wales were night-time workers, the highest proportion of night-time workers compared to the rest of the regions and countries in the UK in 2022.

In Wales, Merthyr Tydfil local authority had the highest proportion of employees in night-time industries (people who work in an industry which has an above proportion of night-time workers) with 56.7% in 2022 (an increase from 49.5% in 2012).

Defence industry workforce

In the latest Workforce jobs data, jobs by public administration and defence industries (SIC 2007) have increased in Wales from 5.9% (85,000) in 2017 to 6.9% (101,000) in 2023.

The total number of employees estimated for Great Britain in 2021, classified against the industry defence activities, was 55,000 (54,700 public sector and 300 private sector), Manufacture of weapons and ammunition had 12,800 employees and manufacture of air, spacecraft, and related machinery had 73,500 employees.

In 2021, there was an estimated 99,000 employees in Wales working in the public administration broad industry group, of which 98,800 employees were in the public sector and 300 employees were in the private sector. There were 74,500 full-time employees and 24,500 part-time employees. Information on the size and characteristics of the UK armed forces population is produced by the Ministry of Defence. If you require any further information or data relating to this, you should contact the MOD directly.

UK armed forces veteran population

In the 2021 Census, Conwy was the Local Authority with both the highest proportion of veterans (5.9%) and the highest proportion of households with at least one veteran (10.2%) in Wales. Pembrokeshire was the second highest for proportion of veterans (5.7%), and the Isle of Anglesey was the second highest for proportion of households with at least one veteran (9.9%). These local authorities all contain or are located near military establishments, suggesting that UK armed forces veterans tend to stay in the same areas once they have left service.

Industry turnover

The number of businesses in Wales generating a turnover in the manufacture of air, spacecraft, and related machinery industry sector has fallen by half from 60 businesses in 2018 to 30 in 2022. In 2022, 5 businesses in this industry reported a turnover between £0 to £49,000; 15 reported £50,000 to £99,000; and 5 businesses reported £100,000 to £199,000. However, in 2018, 10 businesses reported generating a turnover between £0 to £49,000; 35 reported £50,000 to £99,000; 10 reported £100,000 to £199,000; and 5 businesses generated a turnover over £50,000,000.

The manufacture of weapons and ammunition industry sector in Wales includes 5 businesses generating a turnover between £0 to £49,000 in 2022, the total number of businesses has remained the same since 2010.

UK Statistics Authority correspondence to the Treasury Select Committee on revisions within Blue Book 2023

Dear Ms Baldwin,

Thank you for your letter of 14 September 2023 regarding revisions within Blue Book 2023. To take your four points in turn:

  1. An overview of the main drivers of these revisions, and whether there were particular circumstances (including those arising from the pandemic) in 2020 and 2021 that made early estimates of GDP especially uncertain.

As I outlined in the Financial Times recently, The UK’s official economic statistics are rightly seen as among the world’s best. This includes the recent upgrade of our official estimates for economic growth in the pandemic years of 2020 and 2021.

It is certainly true that the large shifts in activity, and the means of delivering that activity in many cases, made it harder for all statistical agencies to measure economic activity during the pandemic. But it is equally true that the larger revisions we have seen for our 2020 and 2021 GDP estimates are proportionally in line with the much larger declines and growths seen over these periods as well.

The main drivers of revision in our 2020 and 2021 GDP estimates come from these changes in activity. For example, the health service had increased costs to deliver a reduced amount of output (e.g. protective equipment, and extra staff) during 2020 which increased the intermediate consumption and decreased the value added of the health sector. During 2021 these intermediate consumption costs continued to rise, but more slowly, while output volumes saw a massive increase from the return of mainstream health activities such as elective surgeries but also from the COVID vaccination programme and so value added then grew strongly.

Secondly retailers and wholesalers also changed the way they operated with specialist stores being forced to close or be limited to click and collect, and a much larger proportion of transactions were completed on-line. This again changed the retail and wholesale margins element in 2020 and then this partially swung back the other way in 2021 as retailers, especially those selling clothing and textiles saw a strong recovery in 2021.

The third driver of revisions was inventories data, where our annual, more complete, data sources gave information that businesses undertook more stock building that previously thought at the start of the pandemic when restrictions were quickly introduced. For more detail, please see our article on the 1st September 2023.

  1. An explanation of what has been learnt from these revisions about what may have been wrong with the earlier estimates, and what improvements the ONS will implement from what it has learnt.

Our early monthly and quarterly estimates for GDP followed the standard ONS procedures using the available ONS data sources. The challenge was the sheer scale of fundamental change in the economy in such a small space of time. The ratio of intermediate consumption to final output is usually very stable, and as a result ONS did not have any data sources for changes to this ratio for periods beyond the latest supply and use balanced year, which was 2018 at the time the pandemic started.

We have now sourced intermediate consumption data on a more timely basis for the health service with quarterly and annual data available within a month or two of the reference period. We are also investigating the use of administrative tax data (VAT) on purchases by businesses as a means of identifying changes in the intermediate consumption ratio more quickly across industry.

We have welcomed the recently announced review by the Office for Statistics Regulation, and look forward to their recommendations as one of the themes relates to “Potential improvements to early estimates of GDP enabled through enhanced access to data”.

An outline of whether the ONS expects similarly large revisions to GDP data for 2022, in either direction, and more broadly whether the ONS sees revisions of this size as exceptional or typical.

The revisions profile of GDP estimates for 2022 and for the first half of 2023 were published on 29 September in the Quarterly National Accounts. There was little to no revision to previously published GDP from 2022 onwards, and we saw only 1 out of the last 6 quarters have been revised. The quarterly growth rate of GDP across all of 2022 was unrevised, while growth in 2023 Q1 was revised up 0.2 percentage points and 2023 Q2 was unrevised. With this release, we observed that revisions for that period are more typical of the pre-pandemic era.

As part of our continual improvement, we have already implemented the new health intermediate consumption data to reduce the potential for revision in this large sector of the economy. While other work looking at wider intermediate consumption continues, we have proactively reviewed areas such as rail transport and air transport to ensure that the intermediate consumption ratio of 2021 does not apply directly to 2022 as well, where we can see clear evidence of a recovery in those sectors. As part of the OSR review of GDP, ONS has committed to provide additional revision analysis of our GDP estimates in October 2023.

Given the ONS notes that it has completed its revisions to GDP using a Supply and Use Table framework ahead of many other countries, what it expects may happen in comparator countries when they undertake their own similar analysis.

 Each country will follow different revision policies and practices, which can result in their estimates being revised at a later date according to their own needs. The timing and impact of revision changes will depend on data availability and magnitude, with large annual structural surveys being the data source needed to make detailed product and industry changes. These annual data sources come with lags on timeliness, often being available up to 2 or 3 years later.

We have now seen revisions to GDP estimates published by other countries. As we previously announced, the 2021 GDP estimates for the UK were revised to 8.7 percent growth from our initial estimate of 7.6 percent growth, a revision of +1.1 percentage points. The Spanish Statistical Agency has now published 6.4 percent growth in GDP for 2021, compared with the previous estimate of 5.5 percent, a revision of +1.1 percentage points. The Netherlands have now published 6.2 percent growth for 2021, revised from an initial estimate of 4.9 percent, a revision of +1.3 percentage points. Italy, have now published 8.3 percent growth for 2021, revised from an initial estimate of 7.0 percent, a +1.3 percentage point revision. All are a similar magnitude of upwards revision for 2021 as observed in the UK context. Conversely, the United States have now published 5.8 percent growth for 2021, compared to a previous estimate of 5.9 percent growth, a revision of -0.1 percentage points [ONS own calculations based on published US data from www.bea.gov]. This highlights that revisions can differ across countries.

Please do let me know if you have any further questions about this topic or if I can be of assistance to the Committee on any other matter.

I am copying this letter to Rt Hon Greg Clark MP, Chair of the Science, Innovation and Technology Committee, and William Wragg MP, Chair of the Public Administration and Constitutional Affairs Committee.

Yours sincerely,

Professor Sir Ian Diamond