Letter to David Rhind from Karen Dunnell regarding Modernising the National Accounts and plans for the Blue Book 2007.
Issue date: 22 February 2007
22 February 2007
Modernising the National Accounts and plans for Blue Book 2007
I am writing to you about our plans to develop the National Accounts in 2007 and 2008 as part of the ONS's statistical modernisation programme. Our aim is to produce the Blue Book in September 2008 using modernised National Accounts systems and methods. This will deliver significant benefits to users in the form of improvements in quality which will address some long standing deficiencies, while consolidating the position of the UK's National Accounts as among the best in the world.
Both the Treasury and Bank of England have been consulted about our plans and have commented that they "regard the delivery of better quality statistics through modernisation as a high priority, because modernised National Accounts will mean more reliable and coherent data that are less prone to revision, taking on latest information and improved methods on a much more timely basis. It will also increase our ability to relate supply and demand to each other. This will be of considerable benefit in the setting of both monetary and fiscal policy, with consequent benefits for the economy at large."
As you are aware, however, modernising the National Accounts is a major project with a number of significant challenges and risks, especially in light of the other changes we are implementing. In order to carry it forward, therefore, we have had to re-prioritise, involving some difficult choices. We have re-allocated resources internally to augment those working on National Accounts modernisation. We have also reduced the scope of this year's Blue Book, postponing benchmarking the accounts and most methodological changes to 2008. This will inevitably mean some temporary, additional uncertainty about the short-term path of the economy until Blue Book 2008. In other respects, ONS will be attaching high priority to maintaining the quality of ongoing quarterly National Accounts estimates and will be monitoring quality carefully through 2007 and 2008. According to an OECD survey the UK is one of only two of the 24 countries surveyed to benchmark its accounts every year. We are also taking steps to manage risks, including the risk to staff retention from relocation.
We have consulted the Treasury and Bank of England about our plans and both consider that the consequences for policy of the reduced scope of the Blue Book are manageable.
We shall be publishing a paper tomorrow, Friday 23 February explaining our strategy and the consequences for the 2007 Blue Book. I attach a copy for your information. We would be happy to discuss any aspect of this with the Commission.
I am copying this letter and attachment to the Financial Secretary to the Treasury and to the Clerk to the Treasury Committee.