The inclusion of illegal activities in national accounts
The ESA 95 provides that illegal activities (e.g. prostitution and production of drugs) fall within the production boundary of national accounts. The sources and methods used need to be reviewed in order to ensure that illegal activities are properly included in the national accounts. The UK already includes estimates in the national accounts for smuggling of alcohol and tobacco, so this reservation will be addressed by including prostitution and drugs within the national accounts framework.
Non-Profit Institutions Serving Households (NPISH)
A review of the new compilation process of NPISH is being carried out to improve the estimation methods and the coverage of the NPISH units. This review is being conducted to take account of all the relevant information currently available. It will include the use of new data sources, improved coverage of the units classified to the NPISH sector and changes to existing methods.
A review of the methods used to ensure exhaustiveness in the National Accounts is being carried out to update the benchmarks and/or modify the methods where needed. A number of exhaustiveness adjustments in the national accounts are based on fixed percentages, which themselves are based on a study on exhaustiveness from mid-1990s. ONS is reviewing the benchmarks being used and will modify the methods where needed.
The valuation of the own-account construction output will include a mark-up for net operating surplus. Currently the mark-up for net operating surplus is not taken into account in the valuation of own-account construction by households. Blue Book 2014 will include the mark-up for net operating surplus to own-account construction where necessary.
New Car List Prices
The impact of the use of list prices in the calculation of the household final consumption expenditure on the purchase of new cars is being investigated. National accounts estimates of household final consumption expenditure on the purchase of new cars are derived by multiplying the numbers of cars sold to private individuals by trade information on list prices. The discounts on new vehicles, including those that are linked to the trade-in value for a previous vehicle, are not taken into account in this method. Similarly, the value of accessories may be missing from the estimates, as they are not covered by the list prices. Blue Book 2014 will improve the methods used to include discounting on the list price and the value of accessories.
Further information is provided via a series of future developments articles which will be published over the coming months.