The Office for National Statistics (ONS) has recently come under fire by Bean. Its methods, he said, had been developed in the era of the Great Depression, and are unsuitable for the digital age.
His criticism of the ONS comes as he launches an independent review of the UK’s economic statistics. The move, commissioned by chancellor George Osborne, was announced in the government’s productivity plan on 10 July 2015.
Bean highlighted several problems the ONS is facing. He said: “As an economy develops, the traditional ways of thinking about it cease to be so relevant.”
He further suggested that the current system “was developed in the aftermath of the Great Depression”, and that Britain was “probably the world leader in statistics”, but was “not quite the leader of the pack now”.
According to the Financial Times, Bean claimed that while big data, rapid innovations in technology, and the rise of the sharing economy have transformed industries around the globe, “official statistics have soldiered along largely unchanged“. He queried whether the UK was making best use of the opportunities stemming from the big data revolution.
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“Bean argued that the traditional divisions of industrial sectors were increasingly out of date,” the Financial Times article said. “Citing the example of Rolls-Royce, which the public considers an exemplar of UK manufacturing excellence but which in fact makes much of its money from its services business, Bean said talking about manufacturing and services as distinct concepts is ‘very often not a helpful way to think about economic activity’.”
The review follows mistakes that had been made by the ONS in recent years, including making an error in inflation measurements. This led to an upward revision of figures in the national income, from 2.4 per cent to 2.9 per cent.
In May, the ONS also made UK trade data errors. The UK Statistics Authority (UKSA) said in a report that the 11 employees who had produced the official trade data were inexperienced and used inflexible processing systems.
The UK’s official trade data will remain vulnerable to errors until the ONS improves its systems and processes, the UKSA said at the time. It concluded: “Concerns remain that errors could happen again due primarily to three factors: weaknesses in the quality assurance of data inputs; a lack of cohesive sense checking of UK trade statistics; and risks around processing systems, which are inflexible and built on workarounds.”
UKSA CEO John Pullinger said that these concerns should serve as a “wake up call” for the ONS.
This was echoed at the end of 2014 by Bank of England governor Mark Carney, who also expressed concerns about the quality of official UK statistics, saying he was “much more comfortable with the data in Canada”.
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