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Production of Public Sector Finance statistical bulletin: responsibilities and accountabilities This product is designated as National Statistics

Released: 26 June 2012 Download PDF

Abstract

The Public Sector Finances (PSF) Statistical Bulletin is a monthly National Statistics publication that has been produced jointly by the Office for National Statistics (ONS) and HM Treasury since 1998. This note outlines the PSF decision-making roles and responsibilities of the two organisations. HM Treasury is responsible for UK fiscal policy and for defining the fiscal measures required to monitor and evaluate that policy. ONS has final responsibility for compiling the statistical measures used in the PSF bulletin, for ensuring they conform to statistical standards and that the content complies with the Code of Practice for Official Statistics. ONS is responsible for the application of National Accounts principles, in particular how to define the boundary of the public sector and how to record transactions. HM Treasury has chosen to base its fiscal framework on National Accounts principles.

Introduction

The Public Sector Finances (PSF) Statistical Bulletin is a National Statistics publication that has been produced jointly by the Office for National Statistics (ONS) and HM Treasury since June 1998. This note outlines for users the PSF decision-making roles and responsibilities of the two organisations in part in response to the UK Statistics Authority’s assessment of the PSF bulletin, Assessment Report No. 14 for the PSF bulletin, November 2011.

As part of its statutory responsibilities, the UK Statistics Authority publishes reports that assess statistics designated as National Statistics for their compliance with the Code of Practice for Official Statistics. If areas are identified where the Statistics Authority thinks that compliance with the Code should be strengthened, the Assessment Report will specify requirements for improvement in order that the statistics concerned may continue to be designated as National Statistics.     

As part of their assessment of the PSF bulletin the Statistics Authority published a requirement to “agree that in future either (a) the statistics will be published by one or the other organisation; or (b) that a note be published explaining who is responsible and accountable for decisions about Public Sector Finances”. This note satisfies option (b) of the requirement.

Both ONS and the HM Treasury are of the view that the PSF bulletin should continue to be produced jointly and this note clarifies responsibilities and accountabilities for important areas in the production of the PSF bulletin.

Purpose and content of the bulletin

The purpose of the PSF bulletin is to provide statistical information on the state of the public sector finances to inform both the Government and the wider public. The statistical measures included in the bulletin aid the Government’s setting of fiscal policy, provide essential inputs for the forecast produced by the Office for Budget Responsibility (OBR) and allow other users to monitor the state of the public finances. The content therefore reflects the needs of both HM Treasury and OBR for specific and current financial statistics and the wider need of others for general financial statistics, in particular consistent time series.

Key responsibilities in the PSF bulletin production process

The PSF bulletin is produced jointly by ONS and HM Treasury and appears on the websites of both bodies, along with pre-release access lists. There is a high degree of cooperation in the statistical production, governance and decision-making processes needed to produce the bulletin. Both ONS and HM Treasury are of the view that the PSF should continue to be produced jointly as the quality of the bulletin is improved by this cooperation.

HM Treasury is responsible for UK fiscal policy, which sets the level of public sector expenditure, revenue and consequently borrowing/debt in line with the Government’s objectives.  Accordingly, HM Treasury defines the fiscal framework, which includes the rules and aggregates used by HM Treasury to plan and monitor fiscal policy. The Treasury is responsible for specifying the statistical aggregates, which inform fiscal policy. ONS and HM Treasury have agreed that these statistical measures should be included in the PSF bulletin.

An example of HM Treasury changing the specification of the aggregates used in fiscal policy was in response to the financial crisis. The definitions of the aggregates used to set and monitor fiscal policy were changed at Budget 2008 and in the 2009 Pre-Budget Report. After consultation between ONS and the Treasury, new aggregates were defined to exclude the temporary effects on the PSF of the classification of the banks that had been recapitalised or wholly taken into public ownership and include the permanent effects at the point at which they were known. The redefined aggregates (the ‘ex measures’) were included in the PSF bulletin to meet the needs of HM Treasury and other users to monitor fiscal policy. Measures that included the temporary effects were retained in the bulletin to meet the needs of other users, including for consistent time series across countries. The reasoning behind the new measures was published in articles on the ONS web site.

The data used to compile the PSF bulletin come from several sources. Data for Central Government are mainly sourced from Treasury and HM Revenue & Customs (HMRC) administrative data sources. HM Treasury and HMRC are responsible for ensuring that the data from their administrative systems meet the needs of the PSF and for liaising with suppliers of data to these systems. These data are compiled on HM Treasury and HMRC systems and sent to the ONS in a format that is ready for use in producing the PSF bulletin. ONS compiles the data for Local Government and Public Corporations from various sources including the published results of surveys of local authorities carried out by the Department for Communities and Local Government (DCLG) and the devolved administrations, banking data from the Bank of England, a small scale ONS survey of the biggest public corporations, selected Whole of Government Accounts data for public corporations and the published accounts of smaller public corporations.

Responsibility for the quality of the source data for the PSF bulletin is shared among a number of organisations, each being responsible for the quality of the data they supply. The overall quality of the data in the bulletin and other general issues including resourcing, strategic direction and the needs of key users such as the OBR and Eurostat are managed through the regular quarterly meetings of the Public Finance Statistics Data Group (PFSDG). HM Treasury and ONS take turns to chair and organise the group, which also includes representatives from DCLG, the OBR and HMRC. It is the main forum at which changes to the PSF bulletin are discussed and agreed.

The systems used to compile the estimates used in the PSF bulletin belong to ONS and are operated and maintained by ONS. Related ONS systems are used to produce the Government Debt and Deficit returns to Eurostat and the public sector elements of the National Accounts. HM Treasury have a great deal of subject knowledge and therefore play an important role in advising and helping ONS in the interpretation of data for use in the processing systems.

ONS takes the lead in the production and dissemination of the bulletin. There is a large amount of consultation with HM Treasury statisticians during this process. Text is drafted by ONS statisticians with input from HM Treasury statisticians, who then discuss the bulletin at a joint meeting, held on the thirteenth working day of the month. The purpose of the meeting is for the statisticians to check the quality of the data, to discuss the main factors driving the data and make sure that these are reflected in the commentary and text and make sure that that this is factually accurate. The bulletin is published on the websites of both ONS and HM Treasury on the fifteenth working day of the month unless this falls on a Monday, when publication occurs on the sixteenth working day to avoid pre-releasing over a weekend. On the day of publication ONS hold a press briefing session.

As a consequence of ONS taking the lead in the data compilation and the production and dissemination of the bulletin, it has primary responsibility for ensuring that the measures included in the PSF bulletin conform to statistical standards and that the content of the bulletin complies with the Code of Practice for Official Statistics. Principle 3 (‘Integrity’) of the Code outlines that decisions relating to statistical methods, standards and procedures, and decisions on the content and timing of statistical releases should be the sole responsibility of the Statistical Head of Profession. In the case of the PSF bulletin the role of the Statistical Head of Profession is fulfilled by the Director General for ONS.

Decisions on scope and methodology

Since 1998, and as set out in the 1998 Economic and Fiscal Strategy Report (EFSR), HM Treasury has chosen to base its fiscal framework on the National Accounts. As outlined in “New Format for Public Sector Finances: April 2000 update”, the data coverage in the PSF bulletin was developed by ONS and HM Treasury between 1998 and 2000 to monitor monthly the key aggregates outlined in the EFSR, that is public sector surplus on current budget, public sector net borrowing and public sector net debt.

The required data are collected by HM Treasury, HMRC and DCLG in such a way that they can be used in the National Accounts and such that the aggregates used to compile the statistical measures are consistent with National Accounts principles. ONS is legally responsible for ensuring that the National Accounts are compiled in accordance with European guidance.

Deciding which institutions should be included within the public sector is of particular importance. ONS is responsible for decisions on the boundary of the public sector and on how to record the transactions of public sector bodies. ONS and HM Treasury guidance enables most institutions to be classified by Departments or HM Treasury by reference to the guidelines, without the need for any consultation. Less straightforward decisions, borderline or sensitive decisions are made by the ONS National Accounts Classification Committee, which currently consists of ONS experts in National Accounts. For example the decision to classify the Lloyds Banking Group and the Royal Bank of Scotland within the public sector was made by ONS, and ONS is the final arbiter of National Accounts classification decisions in the UK and can examine cases on its own initiative at any time. The timetable for the implementation of classification decisions in the PSF bulletin is mainly determined by the availability of the relevant data but also takes account of the ONS’s resource position.

If there are classification issues in the transition from the National Accounts to the fiscal framework, then decisions on these are made by the ONS Executive Director responsible for National Accounts and Public Sector Finances. The Director is supported in their classification decision by advice from a group known as the Public Sector Finances Technical Advisory Group (PSFTAG).  PSFTAG includes members from both the ONS and HM Treasury to reflect the joint nature of the Public Sector Finances release. PSFTAG has a core membership of seven, two from HM Treasury and five from ONS, including the Chair of the PSFTAG who will be a senior member of staff in the ONS Directorate responsible for the Public Sector Finances appointed by the ONS Executive Director responsible for National Accounts. The Chair of PSFTAG can appoint ONS and HMT members with the necessary expertise to PSFTAG, but a majority of ONS members should be maintained. Examples of the sort of issues that are considered by PSFTAG are whether assets should be treated as liquid and so netted off in the calculation of public sector net debt and whether an institution or transaction should be treated as a temporary effect of financial interventions and therefore excluded from the main fiscal measures of debt and borrowing. 

More information on how classification and methodology decisions are made in the Public Sector Finances can be found in a separate article on the ONS website.

Conclusion

The PSF Statistical Bulletin is a National Statistics publication that has been produced jointly by ONS and HM Treasury since June 1998. Both ONS and HM Treasury are of the view that the PSF bulletin should continue to be produced jointly as the quality of the bulletin is improved by cooperation between the two bodies.

HM Treasury is responsible both for UK fiscal policy and for defining the fiscal measures they require to monitor and evaluate that policy. ONS and the Treasury cooperate closely to ensure the quality and integrity of these statistical measures.

The PSF statistical measures are compiled from a variety of sources, both administrative and survey based. HM Treasury, HMRC and DCLG are the main suppliers of administrative data and are responsible for the collection of those data. ONS has final responsibility for compiling the statistical measures used in the PSF bulletin, for ensuring that the measures conform to statistical standards and that the content of the bulletin complies with the Code of Practice for Official Statistics.

ONS is responsible for the application of National Accounts principles. HM Treasury has chosen to base its fiscal framework on National Accounts principles, in particular how to define the boundary of the public sector and on how to record the transactions of public sector bodies.

The table below provides a summary of the way in which the responsibilities for the PSF bulletin are divided between ONS, HM Treasury and other organisations involved with its production.

 

Responsibility

Organisation

 

Specification of measures to plan and monitor fiscal policy

HM Treasury

 

Statistical decisions on scope and methodology for National Accounts

ONS

Decisions on interpretation of National Accounts classifications in the fiscal framework

Joint

Quality and usability of source data used in the PSF bulletin

Each supplier department responsible for own source data under overall management of PFSDG

Compilation of statistics in the PSF bulletin

ONS

 

Quality assurance of the data in the PSF bulletin

Joint

 

Production and dissemination of the bulletin, including the final say on content and timing and ensuring that the PSF bulletin complies with the Code of Practice

ONS

 

 

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

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

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