UK Statistics Authority

Sir David Norgrove to Willie Rennie MSP: Care home visiting

Dear Mr Rennie

I am writing about correspondence the UK Statistics Authority received in relation to the First Minister of Scotland’s reply in the Scottish Parliament to your oral question on 17 September. The First Minister said that “around 40 per cent of the care homes around the country now allow and enable indoor visiting.”

Based on data subsequently set out in an FOI response[1] this figure seems to be a very loose approximation based on incomplete data and referring to both indoor and outdoor visiting. Some health boards either had not supplied figures or did not know the figures and these represented a significant proportion of the care homes in Scotland.

Ed Humpherson, the Director General of Regulation at the UK Statistics Authority has today written about this to Roger Halliday, Chief Statistician at the Scottish Government.[2]

Yours sincerely,

Sir David Norgrove

[1] https://www.gov.scot/publications/foi-202000089350/

[2] Ed Humpherson to Professor Roger Halliday: Proportion of care homes in Scotland allowing and enabling indoor visiting

Wes Streeting MP to Sir David Norgrove – School funding statistics

Dear Sir David,

I am writing to raise serious concerns over the misleading use of school funding statistics by the Conservative Party, including by Conservative Members of Parliament. In particular, I believe that the party’s claim that they have “increased school funding by a minimum of £5,150 per pupil” is false and misleading.

This claim was made in an official Conservative Party video by Amanda Milling MP, the Co-Chairman of the party. It was widely shared on Twitter, including by sever other MPs. I have included links and references to this claim in this correspondence. Despite many people pointing out that the claim is false, it hasn’t been deleted or retracted.

School funding has not in fact increased by £5,150 per pupil. This would imply a rise in school funding of more than £45 billion in England alone. In fact, the budget for schools will increase by only £7.1 billion between 2019-20 and 2022-23. Indeed, according to the IFS Education Spending Annual Report 2020, spending per pupil in 20-22-23 is set to be no higher in real terms than in 2009-10.

What is true is that in 2021 secondary schools will attract a minimum of £5,150 per pupil. This however represents an increase of only £150 per pupil from last year. It is therefore clear that the original claim is wholly false, overstating the increase in per pupil funding by a factor of more than thirty.

This use of misleading statistics is not conducive to fair debate on school funding in the UK. I would welcome your view on the use by the Conservative Party of these statistics.

Yours sincerely,

Wes Streeting MP, Shadow Minister for Schools

Response from the Chair to the Chancellor of the Exchequer: RPI consultation response

Dear Chancellor,

Thank you for your letter of 23 October setting out your conclusions on the timing of changes to the Retail Prices Index (RPI) following the joint consultation between the UK Statistics Authority and HM Treasury.

I am pleased that you acknowledge the statistical case for our proposal. I understand that you have a wider set of issues that you must take into account in making your decision but I regret of course the Government’s decision that the method of calculation should not be changed before 2030.

Your letter emphasises the need for certainty on the future of the RPI, something that came up both in the consultation but also in wider engagement with users.

It is UK Statistics Authority policy to address the shortcomings of the RPI in full at the earliest practical time. I have written to the Bank of England about the legislative constraints and enclose a copy of their response. The change we propose can legally and practically be made by the Authority in February 2030.

On this basis I propose that the UK Statistics Authority and HM Treasury work together to announce the outcome of the consultation.

We continue to urge the Government and others to cease to use the RPI. It would be wrong for Government to continue to use a measure of inflation which it itself recognises is not fit for purpose, where it has the opportunity to change.

Yours sincerely,

Sir David Norgrove

Response from Deputy Governor of the Bank of England to the Chair: RPI consultation response

Dear Sir David,

Thank you for your letter dated 5 November, in which you sought clarification on the procedure for making changes to the RPI from 2030. This pertains to the Bank’s role under section 21 of the Statistics and Registration Service Act 2007 (SRSA) in assessing whether any proposed change to the RPI would be a fundamental change to its coverage or basic calculation and materially detrimental to the interests of holders of relevant index-linked gilts (ILGs).

A senior committee under my chairmanship has considered your request for clarification. In doing so, we have assumed that no changes are made to the relevant legislation and that the definition of “relevant” ILGs remains unchanged. Under those assumptions, we confirm that our understanding is that the last “relevant” ILG is the 4.125% 2030 gilt, which is due to be redeemed in July 2030. The last reference date for the RPI data used to calculate its redemption value is November 2029, which we expect to be published in December 2029.

Consequently, any changes to the coverage or basic calculation of the RPI from 2030 onwards – even those judged to be fundamental – should not have a materially detrimental impact on the interests of relevant ILG holders, either because the redemption values of the relevant ILGs will not be affected by the changes or because, after July 2030, there will be no relevant ILGs outstanding.

However, the UKSA’s responsibility under section 21(2) of the SRSA to consult the Bank before making any change to the coverage or basic calculation of the RPI will not be extinguished with the redemption of the final relevant ILG. The SRSA does not make the need to consult the Bank conditional on there being any outstanding ILGs in issue. Primary legislation would be required to remove that obligation.

Therefore, after the production of the RPI referencing November 2029, we would expect – based on the existing legal framework – that while the ONS will continue to consult the Bank before making any change to the coverage or basic calculation of the RPI, the Bank’s assessment will become more straightforward, given that there can be no materially detrimental impact to the interests of relevant ILG holders.

I hope that this letter is helpful in clarifying the situation for you.

Yours sincerely,

Ben Broadbent

Sir David Norgrove response to Chancellor of the Exchequer – RPI consultation update

Dear Chancellor,

Thank you for your letter about the joint consultation by the UK Statistics Authority and HM Treasury on changes to the Retail Prices Index. As you say, we committed to respond to the consultation this autumn and have agreed that we will do so at the time of the Spending Review on 25 November.

I will be publishing this letter on the Authority’s website.

Yours sincerely,

Sir David Norgrove

Letter from the Chair to the Governor of the Bank of England: RPI consultation response

Dear Governor,

You will be aware of my correspondence with your predecessor about the future of the Retail Prices Index or RPI, and in particular the respective responsibilities of the UK Statistics Authority Board and the Bank of England under section 21 of the Statistics and Registration Service Act 2007 (SRSA). This says that before making any change to the coverage or the basic calculation of the RPI, the Board must consult the Bank of England as to whether the change constitutes a fundamental change in the index which would be materially detrimental to the interests of the holders of relevant index-linked gilt-edged securities or gilts.

In 2019 the Authority put two proposals to the Chancellor of the Exchequer, which were:

to cease publication of the RPI at some point in the future, though we noted this would require the Government to bring forward primary legislation and also take some time to implement given the wide use of RPI; and
in the short-term to address the shortcomings of RPI by bringing the methods and data of CPIH into it.

After I consulted your predecessor about the second proposal, the Bank of England had determined that it was both “fundamental” and “materially detrimental” to the holders of “relevant” index-linked gilts. As such the consent of the Chancellor was required in accordance with section 21(3).

In September 2019, the Chancellor ruled out the first proposal, and on the second, announced he would not provide consent to making the change before 2025, but would consult on the timing for bringing the methods and data of CPIH into RPI. Specifically, the consultation would be on whether this should happen in the window between 2025 and 2030. Following that consultation, the Chancellor has written to me setting out his position, namely that while he understands the statistical arguments of the Board’s intended approach to reform RPI, in order to minimise the impact of the Authority’s reform to RPI on the holders of index-linked gilts, he was unable to offer his consent to the implementation of such a proposal before the maturity of the final relevant index-linked gilt in 2030. I enclose a copy of his letter.

The purpose of my letter to you now is to seek the greatest degree of clarity possible on the position were the methods and data of CPIH to be brought into RPI in 2030. (Separate correspondence, closer to the time of implementation, would be needed on the specific proposal.)

Provided that the legal framework in section 21 of the SRSA as set out above, including the definition of “relevant index-linked gilt-edged securities”, remains unchanged, our understanding is as follows:

the last of the “relevant” index-linked gilts will mature in July 2030, and the last RPI data used in calculating the coupon for those gilts will refer to November 2029, scheduled to be published in December 2029;
the requirement to consult the Bank of England before making any change to the coverage or basic calculation of RPI would not be extinguished following the calculation of the last coupon on the last of the relevant index-linked gilts or following the redemption of the last relevant index-linked gilts unless it is removed by legislation;
however, if a change were made to the coverage or basic calculation of RPI after November 2029, being the last date RPI data would be used in calculating the coupon on the relevant index-linked gilts, it would be straightforward for the Bank to conclude that any change would not be materially detrimental to the holders of relevant index-linked gilts, because the proposed change would not affect the returns on the remaining relevant index-linked gilts, or because there were no longer any holders of such relevant index-linked gilts.

As such, and absent any other changes, the UK Statistics Authority Board would not need to seek the consent of the Chancellor of the Exchequer under section 21(3) to alter the RPI. Any changes we would make to RPI would need to be implemented in an orderly way, and we usually make changes to our consumer price inflation measures each February. If our understanding of the legal position is correct, then we should be able practically and legally to make the change in February 2030.

I am aware, however, that judgements regarding whether a change to RPI is “fundamental” and “materially detrimental” under section 21 are the responsibility of the Bank of England, and would therefore be grateful if you could clarify the position here as much as is possible, particularly in relation to any change to RPI in February 2030. This would allow us to collectively provide certainty for users on the future position.

I am copying this letter to the Chancellor.

Yours sincerely,

Sir David Norgrove

Letter from Chancellor of the Exchequer to the Chair: RPI consultation response

Dear David,

At the Budget in March, the Government and UK Statistics Authority (UKSA) launched a joint consultation seeking views on whether UKSA’s intended approach to reform the Retail Prices Index (RPI) should be implemented at a date other than 2030, and, if so, when between 2025 and 2030. The consultation closed for responses on 21 August.

As you know, under current legislation, the UKSA Board requires my consent as Chancellor before fundamental changes which would be materially detrimental to the interests of the holders of specific index-linked gilts, as judged by the Bank of England, can be made to RPI. The last of these specific index-linked gilts matures in 2030. The consultation sought to inform me of the relevant impacts of reform in order that I could make this assessment. The relevant impacts that I have been able to consider in this assessment are those on the holders of index-linked gilts, the index-linked gilt market and the consequent impacts on the public finances.

Having considered the responses submitted to the consultation, I am informing you and the Board that while, like my predecessor, I see the statistical arguments of the Board’s intended approach to reform RPI, in order to minimise the impact of UKSA’s reform to RPI on the holders of index-linked gilts, I will be unable to offer my consent to the implementation of such a proposal before the maturity of the final specific index-linked gilt in 2030.

After this specific index-linked gilt has matured, the UKSA Board can implement changes to RPI unilaterally. You will be aware from the responses to the consultation, that there have been widespread calls from users of RPI – particularly index-linked gilt holders – for the authorities to provide certainty on the future of the index in the outcome of the consultation. I recommend that we both are mindful of this when we issue our joint response.

Rishi Sunak

Sir David Norgrove to Miles Briggs MSP – Use of COVID-19 prevalence statistics by Scottish Government

30 July 2020 (by email)

Dear Mr Briggs,

Thank you for your letter of 9 July about a comparison made by the Scottish Government of COVID-19 prevalence in Scotland and England.

The sources used for this comparison were not immediately apparent. As the Office for Statistics Regulation (OSR) has made clear in past statements,[1] when this kind of information is used publicly to inform Parliament, the media and the public, it should be published in an accessible form, with appropriate explanations of context and sources. In this instance, the Scottish Government did not do so.

As you say in your letter, the sources you were provided with do not allow for a meaningful comparison to be made. The Scottish Government have since clarified to OSR that their initial source for prevalence in England was an unpublished estimate by the London School of Hygiene and Tropical Medicine. We do not think that these sources allow for a quantified and uncaveated comparison of the kind being made here.

I enclose a copy of a letter from Ed Humpherson, Director General for Regulation, to Roger Halliday, Scottish Government Chief Statistician, setting out our conclusions in more detail. In future we expect to see clear communication of any data sources used and any limitations or uncertainties appropriately reflected.

Yours sincerely,

Sir David Norgrove

Sir David Norgrove to Willie Rennie MSP: Care home visiting

Wes Streeting MP to Sir David Norgrove – School funding statistics

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Response from Sir David Norgrove to Wes Streeting MP- School funding statistics

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Response from the Chair to the Chancellor of the Exchequer: RPI consultation response

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Response from Deputy Governor of the Bank of England to the Chair: RPI consultation response

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Sir David Norgrove response to Chancellor of the Exchequer – RPI consultation update

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Letter from the Chair to the Governor of the Bank of England: RPI consultation response

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Letter from Chancellor of the Exchequer to the Chair: RPI consultation response

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Sir David Norgrove to Miles Briggs MSP – Use of COVID-19 prevalence statistics by Scottish Government

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Miles Briggs MSP to Sir David Norgrove – Use of COVID-19 prevalence statistics by Scottish Government

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