Annual Report on Government Statistical Surveys of Businesses and Local Authorities, 2010/11

Summary

This report for 2010/11 shows that, overall, there was an increase in the burden of statistical surveys of 2.9 per cent (in constant price terms) compared with the previous year. This increase is mainly due to better accounting systems which provide more accurate information on times taken to complete questionnaires. It does not reflect an actual increase in time taken by respondents.

Introduction

This report is the latest in an annual series providing a picture of surveys of businesses and local authorities conducted across government. It aims to help users and data providers judge the effectiveness of government efforts to minimise the costs of complying with government surveys while maintaining a system of reliable and accurate statistics.

The report covers costs incurred by businesses and local authorities in complying with regular and ad-hoc government surveys conducted in the past financial year or for which fieldwork began in this period. The report also provides the number of surveys carried out by each government department.

2. Background to Monitoring and Reducing Burden of Complying with Government Surveys

Information from statistical surveys is fundamental to good government, to the delivery of public services and to decision-making in all sectors of society. However, government must do all it can to minimise the financial burden placed on respondents to surveys.

The Prime Minister’s (PM’s) Instructions on the Control of Statistical Surveys detail the procedures to be undertaken by all producers of government statistical surveys. The instructions state:

"Survey controls apply to all statistical surveys to businesses and local authorities, conducted by, or on behalf of, Government departments or agencies where there is potentially a burden, or a perceived burden, on those approached to participate. […] Surveys conducted by, or on behalf of, non-departmental public bodies are also covered."

The PM’s Instructions (169.7 Kb Pdf) require government departments conducting or commissioning statistical surveys to forecast and monitor the burden they impose on businesses and local authorities, and to minimise this where possible. Survey Control Unit (SCU) in the Office for National Statistics (ONS) has a number of responsibilities under the PM’s Instructions. One of these is to produce this annual report.

It should be noted that the Scotland Act of 1998 stated that statistics and survey control were no longer a matter reserved for Westminster. This meant that the PM’s Instructions no longer applied to Scotland.

A similar situation applied in Northern Ireland (NI) and the Northern Ireland Statistics and Research Agency (NISRA) has provided a link to its report: Statistical Surveys of Businesses carried out by Northern Ireland Departments during 2010

It is not only the PM’s Instructions that require all government departments to monitor and minimise the burden imposed on businesses and local authorities when complying with statistical surveys.

The Code of Practice for Official Statistics also recognises the importance of such requirements. Principle 6 on Proportionate Burden requires that the cost burden on data providers should not be excessive and should be assessed relative to the benefits arising from the use of the statistics. Specifically, practice 1 states that producers of official statistics should:

"Report annually the estimated costs (for example, on businesses, service providers, or the public) of responding to statistical surveys and strive to develop methods that will reduce the costs to individual organisations or people."

In May 2005, central government introduced the Administrative Burden Reduction Project (ABRP) under which departments and agencies agreed that by 2010 they would reduce the cost of administering regulation in the private and voluntary sectors by 25 per cent. This includes the burden caused by statistical surveys (which forms a very small part of the total regulatory burden). Following the conclusion of the ABRP, further EU directives were introduced:

The “One In, One Out” rule

When ministers seek to introduce new regulations which impose costs on business or the voluntary sector, they have to identify current regulations with an equivalent value that can be removed. This requirement is currently in place for surveys run under a regulation.

The “No Gold Plating” rule

Gold-plating occurs when implementation goes beyond the minimum necessary to comply with an EU directive. For example:

• Extending the scope.

• Adding to the substantive requirement.

• Substituting wider UK legal terms for those used in the directive.

• Not taking full advantage of any derogations which keep requirements to a minimum.

• Retaining pre-existing UK standards where they are higher than those required by the directive.

• Implementing early, before the date given in the directive.

• This requirement is currently in place for surveys run as a result of an EU directive.

3. Calculating Statistical Survey Compliance Costs

The method of calculating the costs of complying with government survey requests varies between departments. The current method recommended by ONS uses, separately for each survey, the number of questionnaires despatched (or otherwise requested) multiplied by the average completion time, with the result then multiplied by the typical hourly rate of pay of the respondent.

Information from each survey’s review or pilot is used to decide the average completion time and the hourly rate applicable to each survey. The hourly rate is based on Civil Service pay rates for five ‘management’ levels from clerical to director, including an element to reflect overheads. These hourly rates are inflated each year using the average annual increase from the Annual Survey of Hours and Earnings (ASHE).

During 2010/11, a Government Statistical Service (GSS)-wide Respondent Burden Task Force considered the methodology used to calculate the compliance costs associated with statistical surveys. A new methodology for calculating compliance costs has been developed by the task force, approved by the GSS Statistical Policy and Standards Committee and ratified by GSS Heads of Profession.

This new methodology will be used for the next report in this series, which will also include an explanation of how the discontinuity has been treated.

4. Summary of Statistical Survey Compliance Costs

In 2010/11, a total of 575 statistical surveys of businesses and local authorities were conducted, of which 391 were voluntary and 184 statutory. This is compared with a total of 795 surveys in 2009/10. Approximately 2.9 million questionnaires were used, compared with 3.3 million questionnaires in 2009/10, excluding Intrastat¹. Government surveys imposed an estimated £118 million compliance cost on respondents, which equates to a 6.3 per cent (£7 million) increase on the previous year.

Compliance costs have risen while the number of surveys and questionnaires has fallen. Reasons for this vary across departments, see Section 5 for explanations of major changes in compliance costs between 2009/10 and 2010/11. Please note that some departments have revised their 2009/10 figures from those published last year. An explanation of major revisions is also given in Section 5.

In general, this report shows the compliance costs at current prices: that is, in terms of staff costs at the time the statistical surveys were run. However, it is useful to summarise the change over time in terms of staff costs at constant prices. Figure A gives an indication of the trend over time at both valuations.

Figure A. 2006/07 to 2010/11 compliance costs at current and constant (2010/11) prices

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The 6.3 per cent (£7 million) increase in compliance costs from the previous year in current price terms equates to an increase of 2.9 per cent (£3.4 million) at constant 2010/11 prices.

Tables 1 and 2 in Section 7 give various breakdowns of the costs summarised above, in current price terms only.

Notes for 4. Summary of Statistical Survey Compliance Costs

1. Intrastat is compiled from monthly trade declarations made by VAT registered businesses, which are made up of individual 'lines' of trade. This statistical information provides details on the movement of goods to and from EU Member States. The methodology for calculating the cost of Intrastat is based on the number of declared trade lines each year.

5. Explanation of Major Changes

Tables 1 and 2, in Section 7, show the changes in compliance costs this year for each department when compared with 2009/10. Table 3 indicates that some of these changes are due to increases or decreases in the number of surveys run by departments (some of which may be run biennially).

There are, however, some changes in compliance costs which should be noted specifically. In Section 5.1 we have focused on those departments whose compliance costs have changed by at least 10 per cent and £200,000 from last year.

Departments are given the opportunity to revise figures published the previous year: these figures are identified in the tables using an ‘r’ (as seen in Tables 1, 2 and 3 in Section 7). Where revisions meet the above criteria of 10 per cent and £200,000, explanations have been provided in Section 5.2.

5.1 Major changes between 2009/10 and 2010/11

The Office for National Statistics (ONS) reported a year-on-year increase in compliance costs of £6,329,000 (+16%). ONS attributes the increase to improved information about the proportion of respondents who are re-contacted with queries.

This information is available due to an exercise carried out to establish more accurate estimates of re-contact rates. The figures are higher than previously estimated, thus compliance costs show an increase. ONS also introduced one new survey which was higher in compliance cost than the one survey discontinued, and two surveys which run less than annually were conducted during this reporting period.

Her Majesty’s Revenue and Customs (HMRC) reported an increase of £5,321,000 (+15%). This increase in HMRC costs is due to a 15 per cent increase in Intrastat costs for 2010/11.

This latter increase is explained by the value of EU trade being up over 14 per cent on last year (£297 billion in 2010/11, compared with £259 billion in 2009/10) and the number of total Intrastat declarations (lines of trade) being up 17 per cent on last year (over 45 million submitted in 2010/11, compared with under 39 million in 2009/10).

HMRC also updated the time estimates for electronic submission in the compliance cost methodology to reflect the more sophisticated computer programs used by traders to make declarations. To provide a consistent calculation of Intrastat compliance costs on last year, HMRC re-calculated the 2009/10 compliance cost using the updated time estimates. Information on the impact of this recalculation is included in Section 5.2.

The Department for Environment, Food and Rural Affairs (DEFRA) reported an increase of £759,000 (+61%). DEFRA attributes the majority of the planned increase to changes to the June Agricultural and Horticultural Survey: in line with EU requirements, 2010 was a census and went out to 126,000 contacts compared to just under 53,000 in 2009/10. The increase is also due to four surveys that were conducted in 2010/11 which run less than annually, and a large additional ad-hoc survey.

The Welsh Assembly Government (WAG) reported an increase of £363,000 (+10%) which is largely due to an increase in the Welsh sample for the June Agricultural Survey (as reported on by DEFRA) and an increase in costs of regular business surveys.

All surveys previously reported by HMT on behalf of the Office of Government Commerce (OGC) have been transferred to the Cabinet Office (CO), as the new parent department to OGC. This resulted in a £202,000 increase to CO compliance costs, and a corresponding decrease to HMT compliance costs.

The Department for Work and Pensions (DWP) reported a decrease of £322,000 (-94%). This decrease in compliance costs is due to the discontinuation of three regular surveys and four ad-hoc surveys.

The Department for Education (DfE) reported a decrease in compliance costs of £4,847,000  (-28%). DfE attributes this decrease to a considerable reduction in ad-hoc activity. A total of 94 fewer ad-hoc surveys were carried out in 2010/11.

The School Workforce Census was introduced in 2010/11: however, it had been preceded by a full scale pilot, which in effect ran twice in the 2009/10 year, thus considerably increasing the costs for 2009/10. Some stoppages of collections decided on in the early weeks of the Coalition government, for instance the ending of the ‘TellUs’ collection, and the removal of ‘ContactPoint’-related items from the School Census, also made a significant contribution to the lowering of DfE costs.  

5.2 Major revisions to 2009/10

The Welsh Assembly Government (WAG) revised its figures for 2009/10, increasing its compliance costs by £736,000 (+25%). This resulted from an exercise that reclassified a number of surveys as being in scope of survey controls when they had not previously been reported on.

The Department for Transport (DfT) reported a downward revision of £620,000 (-10%) for 2009/10, due to compliance costs for several surveys being revised following an exercise by Her Majesty’s Treasury (HMT) on data burdens.

Her Majesty's Revenue and Customs (HMRC) reported a downward revision of £15,917,000 (-30%). This revision is based on HMRC's updated time estimates as explained in Section 5.1, which were lower than previously estimated. The revisions are reported in order to provide a consistent calculation of Intrastat compliance costs on last year.

6. Departmental Changes in 2010/11

• The Office of Government Commerce (OGC), a non-departmental public body (NDPB), previously reported all survey activity via their parent department, Her Majesty’s Treasury (HMT). In June 2010 responsibility for OGC transferred to the Cabinet Office (CO). The change in the ownership of survey compliance costs is reflected in Section 7 and explained in Section 5.1.

• In May 2010 the Department for Children, Schools and Families (DCSF) was renamed the Department for Education (DfE). 

• During 2010/11, Communities and Local Government (CLG) reverted to its former name: Department for Communities and Local Government (DCLG). 

• During 2011/12, the Welsh Assembly Government (WAG) was renamed the Welsh Government (WG). This name will be used in the 2011/12 report in this series.

7. Detailed Breakdown of Statistical Survey Compliance Information

The following tables give detailed breakdowns, by department, of the information summarised in Section 4.

Table 1 shows the changes in compliance costs arising from departments’ statistical surveys in 2010/11 compared with 2009/10. Departments marked with an asterisk have been identified as having changes in compliance costs of at least 10 per cent and £200,000 over the previous year. The main reasons for these changes are explained in Section 5.

Table 1: Total costs of complying with government surveys: Last two years (current prices)

Table notes:

1. r = revised by individual departments after publication of 2009/10 report

2. e = estimated value provided by department

3. * = major changes in compliance costs from previous year

4. All figures have been rounded to the nearest thousand pounds. Figures may not add exactly due to rounding

5. Departments’ names have been abbreviated as shown in Appendix A – for example the Cabinet Office is shown as “CO”

   Source: Government departments

Table 2 gives the compliance costs and year-on-year changes shown in Table 1, broken down by businesses and local authorities.

Table 2: Costs to businesses and local authorities of complying with government surveys

Last Two Years (current prices)

Table notes:

1. r = revised by individual departments after publication of 2009/10 report

2. e = estimated value provided by department

3. All figures have been rounded to the nearest thousand pounds. Figures may not add exactly due to rounding

4. Departments’ names have been abbreviated as shown in Appendix A – for example the Cabinet Office is shown as “CO”

   Source: Government departments

Table 3 shows the number of government surveys carried out by department, detailing the proportion of these that were voluntary rather than statutory and the change in the total number of surveys when compared with 2009/10.

Table 3: Number of government surveys

Table notes:

1. r = revised by individual departments after publication of 2009/10 report

2. All figures have been rounded to the nearest thousand pounds. Figures may not add exactly due to rounding

3. Departments’ names have been abbreviated as shown in Appendix A – for example the Cabinet Office is shown as “CO”

   Source: Government departments

8. Links to Departments’ Compliance and Quality Improvement Plans

During the Administrative Burden Reduction Project (ABRP), departments were required to produce a Simplification Plan. Obligations under the Prime Minister’s (PM’s) Instructions require departments to produce a Compliance and Quality Improvement Plan. In order to comply with both obligations the Simplification Plan and the Compliance and Quality Improvement Plan were combined into one report. Following conclusion of the ABRP in 2010, Simplification Plans are no longer required as a full report. Departments are currently reverting back to producing Compliance and Quality Improvement Plans. Table 4 provides links to departmental plans.

Background notes

1. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Appendix A. Departments and their abbreviations

Contact Details

For enquiries regarding this publication contact:

Denise A Williams

Tel: +44 (0)1633 45 5609
Fax: 01633 65 2727

Email: survey.control.unit@ons.gsi.gov.uk

Address: Office for National Statistics, Government Buildings, Cardiff Road, Newport NP10 8XG