Committee

• Martin Weale (Chair) 
• Robert Heath (Deputy Chair)
• David Caplan
• Ian McCafferty
• Paul Mizen
• Rebecca Riley
• Mairi Spowage
• Nick Vaughan
• Thomas Viegas

Office for National Statistics (ONS)

• Ed Bailey
• Jessica Barnaby
• Kate Beeslee
• Emily Carless
• Paul Dunstan
• Grant Fitzner
• Chloe Gibbs
• Richard Heys
• Janine Jenkins
• Rosie Maslin
• Rebecca McAlpine
• Helen Meaker
• Katherine Mills
• Sophie Peabody
• Mark Pont
• Simon Rigby

Office for Statistics Regulation (OSR)

• Ed Humpherson
• Mark Pont
• Lucy Carless

Additional Attendees

• Philip Wales

1. Approval of minutes from previous meeting and Declarations of Interest

1. Committee members approved the minutes, and no interests were declared.

2. Update on NSCASE recruitment

1. The Chair updated the Committee that two new members had been successful in the NSCASE recruitment process and welcomed the two successful candidates Ian McCafferty and Thomas Viegas.
2. He shared that there were nine applicants and that he was very happy with the outcome. He offered his congratulations to the new members of the Committee.
3. He invited the members of the Committee and others present to introduce themselves, before inviting Ian and Thomas to do the same.

3. Overview and status of actions from last committee meeting

1. A document outlining actions to be taken was submitted to the Committee. The Chair invited the members to flag any concerns or questions.
2. Robert Heath raised that his previous request for further information regarding the treatment of Hinkley Point C had not been completed as far as he was aware. He had received a draft which he had made comment on.
3. The Chair suggested amending the action to being in progress and requested that the draft be circulated to the committee ahead of the next meeting.
4. Robert asked why the UN was approached for a general note on the SNA update, when it was requested that the ONS’s AEG representative could update the Committee.
5. This was explained as an error in the wording of the action log, and that the Secretariat has requested an issue log specifically. The SNA Update is a UN initiative, and the UN is responsible for setting the timetable; the NSCASE secretariat are developing closer links with the UNSD secretariat to enable better forecasting of work streams, manage workloads and hold the secretariat to account on timetables. The publishing date of the log is unknown.
6. Nick Vaughan asked what the experience of other national statistics agencies with the MGDD was and asked whether ONS had received any feedback from other countries.
7. It was explained that detail of the NSI responses was not provided due to confidentiality reasons. A note was included in the annex of the MGDD paper.
8. The Chair reviewed the future work plan and clarified that it was not possible to say what order future work will come to the Committee beyond what was listed for October. He asked the research team and Secretariat to confirm that there would be a full agenda for the October meeting.
9. It was explained that an update on the ISIC consultations process ahead of a substantive paper in January would be added to the October workplan.
10. David Caplan asked what the scope of the environment paper was and had concerns over the move from gross to net measures. He asked if there were plans to bring this to the Committee. Richard Heys was able to confirm that there were plans.
11. Robert noted that as the international community has come to a decision on crypto assets and whether an item on crypto could be brought to the Committee. Richard Hey confirmed that following a three-day workshop with the IMF they would be able to provide an update to the committee.

Action: Correct SNA wording in action log to better reflect work on SNA updates
Action: Circulate NSI MGDD feedback to the committee.
Action: Update forward workplan to include ISIC update in October meeting
Action: Bring a Crypto Asset update to the committee.

4. Update on OSR’s Enhanced Scrutiny Programme

1. Ed Humpherson updated the Committee on the enhanced scrutiny programme. He provided the committee with an overview of OSR’s structure and the standards they used which were set in the code of practice. He noted that the programme was focused on quality assessments and also the review of classification processes.
2. Their first assessment has been of PPI statistics where there are improvements needed. Transformation plans and reviews of data sources have been implemented. At the methodological level, ONS has made improvements particularly through international comparability. OSR identified problems and weaknesses in quality assurance.
3. With classifications, OSR are working to understand the current process and how classifications work in other non-EU countries.
4. Robert Heath welcomed the report, and asked whether the framework could be shared with the Committee and was flexible depending on the data set that is being looked at. He compared the issues covered in the first report to the IMF quality assessment framework and found it lacked discussion around staffing, periodicity of data and legal backing. He asked which users had been reached out to and whether the Special Data and Dissemination Standards Plus (SDDS+) website had been used as a source of metadata.
5. Ed confirmed that the framework would be shared with the Committee. He explained that they used the standard OSR framework which contains three attributes of public confidence in statistics: trustworthiness, quality, and value. In terms of assurance of economic statistics, he explained how without the Eurostat process, OSR focus very much on the quality and integrity of data sources, methods, processes, and how those strengths and limitations are communicated. He explained that the elements that Robert raised did not form a core part of what OSR considered but noted that it could be reconsidered with Robert’s comments.
6. Mark Pont added that the framework is a work in progress. He confirmed that the framework would be flexible given the range of statistics it would be applied to. He also thanked Robert for highlighting the SDDS+ website as it was not a source they had considered.
7. Mairi Spowage approved of the report as it stressed the need for more transparent data sources. She asked to what extent the ONSs current methods of engaging with users meaningfully was working, and how aware the ONS was of who their users were. She also asked about the OSR’s capacity to pivot into this kind of work.
8. Ed acknowledged there was work to be done around engagement but gave reassurance around resourcing. He explained that OSR were planning to recruit more economists to assist in this work, though noted that this would take time to do. He also noted that as part of developing the framework they had engaged with international experts.
9. Philip Wales thanked Ed for bringing the paper to the Committee and asked if OSR were able to analyse the coherence of the datasets and ensure that they coordinated in a sensible way. He asked how the international experts they consulted were selected and would be selected in the future. He also noted that while it was important to have oversight in the scrutiny of the classifications function, the establishment of a secondary Committee should be avoided outside of the existing Economic Statistics Classifications Committee.
10. Ed explained that they used a comparison with G7 countries in the methods used in selecting international experts.
11. David Caplan noted that Eurostat was very good at assessing what should be measured and that should be reflected in the quality aspect of how the ‘trustworthiness, quality, value’ framework is applied.
12. Nick Vaughan noted that it was good to see a move away from performing surveys on commodities and homogenous goods.
13. Paul Mizen asked whether there had been a consideration of what adjustments might be needed to the process for other national statistics where there is a trade off in the need for timeliness and quality.
14. The Chair asked about what consideration had been given to the broader strategy and what assurances were there to ensure that other important areas were not being left out.
15. Emily Carless from OSR explained that the PPI assessment had been selected as a good test for the framework. It will evolve over time in how the assessments are prioritised in the future. A great deal of stakeholder feedback would be sought to identify the big issues. Regarding classifications, Emily explained that they were looking to regulate the process and not regulate the outcomes as it steps beyond OSR’s remit.
16. Ed Humpherson thanked the Committee for their insight and the rich conversation and offered to bring the next phase of their work back to the Committee when appropriate.

Action: Share the OSR framework with the committee by email.

5. Further information on Amendments made by Eurostat to the Manual on Government Deficit and Debt (MGDD), 2022 Edition

1. Helen Meaker shared an update on the further research and information provided to support the adoption of the MGDD 2022 edition. She explained that the motivation for updating the 2019 edition encompassed emerging events including innovative schemes to support both households and businesses in their respective economies.
2. Helen explained how they had approached a number of EU countries for their views on the impact of the changes and received useful feedback.
3. She explained that conceptually the changes are manageable with no red flags from the responding EU countries and full adoption is supported by the ONS senior leadership team and key external stakeholders.
4. Helen noted that the UK had already adopted the MGDD 2019 edition and contributed to its content via working groups, and although the 2022 version had introduced new or updated topics the majority of the guidance remained the same. Not adopting the 2022 edition would put the UK out of step with EU countries, and using guidance that had been superseded could reduce confidence in our international comparability.
5. Nick Vaughan thanked Helen for the update and supported the recommendation but noted the UK was considering some large guarantees with the Multilateral Development Banks which would need to be considered in due course.
6. Robert Heath supported adoption as there appeared no realistic alternative at this stage and asked why the UK had to follow the debt and deficit manual. He asked whether consideration had been given to following the global guidance rather than the European guidance. He also noted that the paper did not consider the impact the adoption may have on other sections of the economy outside the government, referencing the potential impact of COVID-19 guarantees on the banking sectors. He encouraged the ONS to look also in the context of how it affects other sectors of the economy.
7. The Chair asked if there was any data that would be affected as the balance sheets reflected past flows even though the paper states there would be no impact on measures of deficit.
8. Helen explained that the amount of research done given time constraints was proportionate. If there were any areas for future research, they should be looked at across the whole sector separately as needed.
9. Mairi Spowage supported the adoption and noted that the new guidance was largely consistent with the UK’s current approaches. She raised some clarifications around the wording of the paper to reduce confusion. She also agreed with Robert’s point that the impact of this guidance on other sectors would be an interesting topic for future research.
10. Robert Heath noted some additional amendments to the wording of the paper for clarification. He asked about whether the military equipment being sent to Ukraine would be recorded as being lent or gifted. He also noted that the UK would donate a portion of its SDR allocation to the IMF for lending to low-income countries and asked whether this would affect the capital contribution to multilateral banks.
11. Philip Wales thanked Helen for the paper and raised that the Committee could consider areas of weakness and the best vehicles for making the necessary changes.
12. David Caplan supported the adoption with the caveats included in the presentation about future changes.
13. The Committee supported the recommendation to adopt the MGDD 2022 and advised the National Statistician accordingly.

Action: Update the paper with the Committee’s clarifications around wording ahead of publication

6. Globalisation: an outline of sub-topics to be presented to NSCASE, and an introduction to the first sub-topic of ‘Valuation of Imports and Exports of Goods in the International standards’

1. Chloe Gibbs, Deputy Director of Global Trade and Investment Division, presented an introduction to the first paper of five on the subject of globalisation, focusing on the valuation of imports and exports of goods in the international standards.
2. The paper asked for advice on how the UK should move towards a new standard of valuing imports and exports. The current method is based on converting import data from Cost Insurance and Freight (CIF) to Free on Board (FOB) which has quality concerns.
3. The proposed alternative method which is expected to come into force in future international guidance would be based on observed transaction values recorded on invoices, also known as invoice values. This value would be more aligned with the change of ownership principal which is how the international guidance states trade data should be reported.
4. The Globalisation Task Team want to move to transaction values as they are conceptually preferred, but they recognised that data availability and quality of alternative sources needed to be taken into account.
5. Both BPM7 and SNA 2025 will guide countries to explore potential for using transaction values, with a target of switching at BPM8.
6. Chloe asked the Committee to consider the plan to align to BPM7 and SNA25 in retaining the FOB basis for reporting trading goods with a view to exploring invoice-based values in preparation for BPM8 expected in 2035. She also requested the Committee’s input on methods around valuing trading goods.
7. Ian McCafferty asked to what extent do the ONS understood how the invoice basis paired with FOB or CIF measures of counting imports and exports. He noted that a lot of invoices may include transportation and other costs though this may not be universal.
8. Chloe explained that no work had yet been undertaken in how the estimates would differ. She noted that if the invoice did not include the transport costs other methods would need to be explored in collecting that data.
9. Robert Heath asked if invoicing was consistent across imports and exports. He also questioned the timescales presented for BPM8 in the paper.
10. Nick Vaughan asked how big the difference was between CIF and FOB and if the difference was symmetrical between imports and exports. He also noted that customs data were on a SIF basis which might make things easier.
11. Chloe explained that the adjustment made is currently about 3% but that she would confirm the figure.
12. Mairi Spowage noted it was difficult to give advice without knowing more about the potential alternative data sources that might be explored. She noted that there seemed to be a lack of alternative options to continuing the current methods.
13. The Chair explained that the second option would be a request to accelerate the work on how to implement an invoice valuation. While ONS was not in the position to implement a change immediately the question was how quickly they moved to a new system.
14. Richard noted that if the ONS were to move out of step with everyone else, asymmetries in data may be increased.
15. Robert Heath suggested the date of 2035 for the next BPM was uncertain so there may not be the need to move particularly quickly on this matter.
16. The Chair asked if there was information on how quickly other countries were moving on this change.
17. Ian McCafferty noted that it appeared that this would be a very large piece of work and that delaying for too long could mean falling behind.
18. David Caplan asked what resources were available now and what resources would be expected in the future in order to complete what would be a large project. He also asked if any other countries had done any serious research in this area.
19. Chloe explained that the resources did not exist in the immediate future and that exploration was required to look at what resources would be required for the future. She was not aware of other countries undertaking research in this space but would investigate and bring it back to the Committee.
20. Robert Heath asked what the implications would be for insurance statistics.
21. The Chair suggested supporting the implementation of option 1 with the request of a short report once a year on updates that have been made and to give an idea of the projected time scale.
22. Philip Wales suggested splitting the statistics where possible and, in principle from a measurement point of view the use of FOB statistics over SIF seems preferable. He noted how it was important to recognise that the subject was difficult and there was a lot of work to be done.

Action: A short report produced and presented annually to the Committee explaining the likely timetable possible, and updating on progress, including that made by other countries.

7. Short update for NSCASE on non-monetary gold

1. Richard Heys presented a short update on the topic of non-monetary gold following previous discussions on the topic at earlier meetings and via correspondence outside of the meetings. He noted that other large gold trading countries tended not to measure valuables in a concrete fashion, which could make comparability more difficult.
2. He noted that a key challenge was that valuables did not appear on the balance sheet. There was a threat of disclosure which was the reason stock data had not been released and it was not possible to add changes to a stock number that didn’t exist. Following talks with the Bank there was now an improved prospect of getting stock data.
3. David Caplan queried whether option one would lead to different versions of GDP. Richard explained that a change in investment would be counterbalanced by an opposite change in trade.
4. The Chair asked whether it would be possible to aggregate non-monetary gold with some other valuables to mitigate the risk of disclosure. Richard explained that the Bank only disclose gold, silver, palladium and platinum and gold is by far the most significant, meaning that the risk of disclosure remained. He explained there was the potential to take stock value at a specific point in time and apply flow changes to them from there.
5. Nick Vaughan asked whether there would be other guidance changes outside of the SNA that would have an impact. He also asked how Switzerland dealt with the issue.
6. Richard explained that a lot of what Switzerland did was refining gold and exporting it to the global exchanges and they did not perform the same level of trading.
7. David Caplan asked if the Committee could be provided with a clear presentation on the impacts of the differences on the accounts at the October meeting.
8. The Chair thanked Richard for the update and looked forward to the final paper in October at which point the Committee would come to a decision.

Action: Richard Heys to prepare paper for October meeting.    

8. NSCASE International Guidance discussion

1. Paul Dunstan, head of the NSCASE Research Team, presented a paper to facilitate a holistic discussion on international guidance.
2. Paul introduced the aim of this discussion for the Committee was to review the Analytical Framework and Decision Criteria. The paper firstly, provided an overview of international guidance, and secondly, illustrated proposed changes to the Framework Decision Making Criteria.
3. Proposed alterations to the analytical framework include description of the issue, discussion of relevant international guidance, and contextualising this with UK specific factors. Proposed changes to the decision criteria include the addition of system coherence to prevent causing data inconsistencies, international comparability, and practicality.
4. Paul noted that the research template had already been updated with proposed changes and that this would be edited where appropriate and circulated to the Committee for approval following the discussion.
5. Robert Heath added that the changes to the decision-making framework reflected codification of the Committee’s decision-making approach to date as well as the importance of international comparability, system wide coherence, and reputational risk.
6. Robert Heath questioned what the legal obligation was for the UK to follow the ESA 2010 and related manuals after 2024, when the UK had complied with the withdrawal agreement. The Chair sought clarification on whether this date referred to all statistics or just data related to national income. Richard explained that the obligation was to report GDP and understood that the UK had more flexibility on submitting other data to Eurostat. The Chair wished to add a line into paragraph 4 of the paper that this did not affect other variables.
7. Robert Heath stated that paragraph 23(b) should be edited to remove an inaccuracy that implied that SNA08 and BPM6 were not methodologically consistent in recording non-monetary gold.
8. Robert suggested a minor edit of paragraph 23(c).
9. The Chair suggested an alteration to paragraph 23(d) to allow the Committee some flexibility in whether to advise the National Statistician to adopt or not adopt certain guidance based on what the Committee considered most appropriate for the UK.
10. David Caplan raised that, in relation to paragraph 27, it was important to recognise that there were always issues with international comparability, as minor factors could cause asymmetries in international comparison. The Chair suggested rewording the paragraph to include that the Committee recognised the desire to maintain international comparability but that in some circumstances, such guidance might fail to meet UK’s needs.
11. The Chair and David agreed that the wording in paragraph 23(d) was currently too weak and would work with the Research Team to revise this. Nick concurred that the paper should reflect that the UK should not publish solely according to international guidance and advocated maintaining flexibility in the decision criteria.
12. Nick Vaughan also expressed strong support for the addition of system coherence.
13. Mairi Spowage wished to have further information on where countries did not adhere to international guidance manuals and the reasons for this so as to inform on the circumstances in which other large economies diverged from the SNA. Mairi also sought more information on the ‘other differences’ referred to in paragraph 10. She emphasised that it would be helpful to have more background research on where countries did and do not adhere to the SNA or ESA, and the reasons behind this.
14. Philip Wales supported Mairi’s point and noted that the ESA manual was unique in publishing compliance rates. He noted that Australia and New Zealand are both very thorough in documenting where they were and were not compliant with international guidance but that there was no single source which collated compliance rates across countries. He referred a paper by Michael Davis from the Australian Bureau of Statistics that summarised some of the practices, but the ONS did not have the resources to take this further.
15. Robert Heath referred to the IMF website that sets out country compliance with international standards in the SDDS+ metadata page.
16. Paul Dunstan suggested that the framework be presented to the Committee on a yearly basis and highlighted that the Research Team could work to collate this information. The Chair asked for a table summarising compliance to be created and appended as an addition to this paper. Richard asked the Chair if there was a specific country or region that he wishes to target. The Chair clarified that requesting data from non-EU G7 countries would be most valuable in the first instance. Paul Dunstan expressed concern about the timeframe, as it would not be possible to have this work ready for publication with the papers from this meeting. The Chair agreed that a statement on international comparability should be presented at the July 2024 meeting. Paul confirmed that he would share working drafts with the Committee as the work develops.
17. Robert Heath queried whether this international compatibility assessment would focus on the System of National Accounts or the Balance of Payments Manual. The Chair stated he preferred a deep focus on one important manual and suggested that the SNA be used.
18. Ian McCafferty highlighted that, in relation to paragraph 29, the analytical benefit should be considered against the resource cost. In his experience of working with businesses, he noted that data requests from the ONS resulted in a significant resource cost to the business and felt that the cost to original data providers needed to be considered.
19. Nick Vaughan requested that the Davis paper Phil referred to should be shared with the Committee as background information, or if it was sensitive, that it forms the basis of a future paper for the Committee. Richard responded that he would check if it could be shared.
20. Paul Mizen suggested that the decision criteria be considered in every meeting and applied to all issues to ensure the Committee was consistent in its decision making. He advocated that the Committee look at the higher-level aspects of the framework and criteria before analysing the wording.
21. Paul Dunstan thanked Paul Mizen for the positive feedback and confirmed that business areas were provided with the research template so the papers presented to the Committee in future should cover all aspects of the analytical framework. The Research Team had also asked business areas to confirm which factors of the framework ONS were prioritising when making recommendations.
22. The Chair suggested that the summary page from the analytical framework form a cover sheet of the paper, to adopt Paul Mizen’s recommendation that it be more significantly considered when coming to a decision.
23. The Chair brought the Committee’s attention to Annex 1 and asked the Committee if they were happy with the changes. The framework would then be reviewed at the July 2024 meeting. David raised that he agreed with the function of advising on appropriate standards for the UK but wished for more specific clarification of the priority factors, such as supporting the ONS in producing a set of integrated economic statistics which were conceptually coherent, meet the needs of users and adequately measure the economy while conforming as far as possible with relevant international guidance. There was some discussion over the wording, and David would confirm a revised wording to the Secretariat before the publication of the minutes.
24. Robert Heath stated that the framework should remain as guidance, and that business areas or the Committee should not be expected to answer every detail of the framework.
25. Paul Dunstan asked if the Committee were happy to sign off the research template via correspondence. The Committee and the Chair agreed.

Action: Make edits in the paper in paragraphs 4, 23(b), 23(c), 23(d), and 27, as requested by the Committee.
Action: Conduct research into the compliance of non-EU G7 countries to the SNA manual to be presented to the Committee in July 2024.
Action: Check if Michael Davis paper could be shared with the Committee and circulate if possible.
Action: circulate the summary decision criteria and analytical framework to the Committee with each paper.
Action: David to confirm with secretariat revisions to Annex 1.
Action: Committee to sign off research template via correspondence.

9. National Statistician’s decision on NSCASE Recommendations

1. The Chair thanked the National Statistician for the interest taken in the work of the Committee, and for approving the Committee’s recommendations.
2. Paul Mizen questioned what the procedure would be if the National Statistician chose to reject the Committee’s recommendation. Rosie clarified that the National Statistician would communicate all decisions with the Committee, and if needed, could take recommendations to the UK Statistics Authority Board for further opinion.
3. Richard Heys clarified that the National Statistician could make recommendations to the Board as they were the lead Authority. In an instance where the National Statistician rejected the Committee’s recommendation, this would be communicated first to the Chair of NSCASE, and then the matter would be reported back to members at the next NSCASE meeting; as such it would be recorded in the minutes, which in turn would be made public.
4. Nick Vaughan noted that the National Statistician had accepted a recommendation where the UK would be diverging from international guidance.
5. Robert Heath asked whether 2026 was the date of implementation of the Committee’s recommendation on the quality adjustment of public services. The Chair clarified that 2026 was described as the earliest date that was practical, and Richard confirmed that the ONS was currently working towards 2027.
6. Nick Vaughan made a point about the UK’s wider governance framework in an international context. He stated that Canada and Australia did not have a committee like NSCASE, though he observed that the UK was facing a greater transitional period due to the EU exit.
7. The Chair also thanked the National Statistician for his statement on one year of NSCASE.

10. Any other business

1. The Chair brought attention to the NSCASE annual report that was published in UK Statistics Authority annual report and was circulated to members ahead of publication.
2. The Chair thanked the Committee and ONS colleagues for attending the meeting and confirmed that the next meeting will be held on the 9th of October.
3. The Chair concluded the meeting.