The UK government has launched a formal investigation into the Office for National Statistics (ONS), citing growing concerns over the quality and reliability of its data, as per Bloomberg.
The probe will focus on the “culture, structure and leadership” within the ONS, according to a joint statement released Tuesday by the UK Statistics Authority and the Cabinet Office.
Robert Devereux, a former high-ranking civil servant at the Department for Work and Pensions, will lead the review, which is expected to conclude in early summer.
“Data and statistics are integral to decision making and the delivery of public services,” stated Cat Little, permanent secretary to the Cabinet Office, highlighting the crucial role the ONS plays in informing government policy.
The announcement follows mounting criticism from key economic institutions, including the Office for Budget Responsibility (OBR) and the Bank of England (BOE), regarding the accuracy of official statistics.
David Miles, a senior official at the OBR, recently voiced skepticism about the watchdog’s own economic forecasts, which underpin Chancellor of the Exchequer Rachel Reeves’s budget plans. He told Parliament’s Treasury Committee that current data problems make it difficult to assess key economic indicators like the level of productivity, employment, and the amount of “slack” in the economy. “People should have much less confidence in the employment statistics than they used to,” Miles stated.
The ONS has been struggling to maintain data quality since its labor market survey was impacted by a significant drop in response rates. While the agency is working to develop a new survey to better track the jobs market, the issues have reportedly spread, impacting estimates for gross domestic product (GDP) and prices data.
These inaccuracies are posing significant challenges for the OBR in producing reliable economic forecasts, which the Treasury relies on for budget planning. Small changes to the OBR’s projections can have a substantial impact on the Chancellor’s fiscal room for maneuver.
Bank of England policymakers have also expressed concern. BOE rate-setter Megan Greene stated on Tuesday that the central bank has a “somewhat murky picture” of the labor market, a key factor in determining how quickly the BOE can loosen monetary policy.
The government’s investigation aims to identify the root causes of these data quality issues and implement necessary reforms to ensure the ONS can effectively fulfill its vital role in providing accurate and reliable statistics.
