The National Accounts provide a framework for describing what is happening in national economies. All institutional units operating within an economy are classified to an institutional sector and all transactions between the sectors of the economy are also categorized as part of the National Accounts framework. Work on the classification of sectors and transactions is a key input in the production of the National Accounts.
This is particularly important in the area of public expenditure, revenues, borrowing and debt. This applies both domestically, and within the European Union. For example, in the European Union statistics based on the European System of Accounts 1995 (ESA95) are used in:
the Maastricht Treaty Excessive Deficit Procedure measures of government debt and deficit, where they determine the convergence criteria for monetary union for non-members, and performance against the Growth and Stability Pact for existing member states; and
the measurement of Gross National Income (GNI), one of the main determinants of member states' contributions to the European Union's budget.
It is a legal requirement for European Union countries to compile specified statistical returns on the basis of ESA95. The United Kingdom National Accounts are produced by the Office for National Statistics (ONS) on this basis. Further guidance is contained in Eurostat’s Manual on Government Deficit and Debt, and additional clarification is contained in the System of National Accounts (SNA) 1993.
Since 1997, the UK’s fiscal policy frameworks have also been based on the National Accounts. Fiscal policy objectives are in terms of statistics based on National Accounts aggregates. This means that key fiscal targets are dependent on National Accounts definitions and classifications.
Classification decisions for National Accounts purposes are taken by the National Accounts Classification Committee (NACC) within ONS.