1. Executive summary

This is Office for National Statistics’s third annual Economic Statistics and Analysis Strategy. It provides users, stakeholders and researchers clarity on how we are working to improve UK economic statistics in line with the “Better Statistics, Better Decisions” agenda. It highlights our main achievements over the last 12 months against this mission, in addition to illustrating our plans to build on these accomplishments during the financial year ending 2019. Our longer-term research priorities are also described.

If you would like the strategy as a pdf, please email: economic.statistics.engagement@ons.gov.uk

Our priorities

Our priorities for the future evolution, measurement and understanding of economic statistics for this third version remain unchanged from last year. They cover the following themes:

  • Modern economy and the national accounts

  • Trade and international statistics

  • Devolved, regional and local statistics

  • Productivity and the supply of labour and capital

  • Prices

  • Beyond GDP – broader measures of welfare and activity

Alongside these we will continually horizon-scan for new issues and research new specifications or methodologies for us to use in new or improved statistics.

How we are delivering the strategy

We are continuing to enhance our economic and analytical capability, in terms of both in-house skills and through engagement with external experts. This includes:

  • building our data science skills for economic statistics and research with the launch of the Data Science Campus

  • continuing our engagement with external experts through the Economic Experts Working Group (EEWG)

  • continuing and developing our collaboration with the Economic Statistics Centre of Excellence (ESCoE)

  • building on our engagement activities with several partners aimed at improving the quality and understanding of economic measurement

Latest progress

Over the last 12 months we have made significant advances across our six priority themes, as follows.

Modern economy and the national accounts:

Trade and international statistics:

  • published a revised trade development plan setting out ambitious plans to strengthen reliability and robustness of UK trade statistics

  • implemented a number of revisions in Pink Book 2017, in line with international standards

  • published an article on trade asymmetries and agreed a structured plan for further research in this area

  • delivered enhanced trade statistics, by industry by county

Devolved, regional and local statistics:

  • published estimates of gross value added (GVA) and gross disposable income (GDHI) for all local authorities and local enterprise partnership (LEP) areas of England

  • released first experimental balanced regional gross value added (GVA(B)) estimates, where the UK became the first country in the world to bring together existing income and production-based measures into single estimates for each region

Productivity and the supply of labour and capital:

  • expanded published labour productivity data substantially, producing for the first time estimates of labour productivity for specific industries in specific regions

  • undertaken extensive microdata research using new and existing data sources, to produce a series of quarterly research articles focused on improving our understanding of the UK productivity landscape

  • developed an interactive ONS Employment Prospects Data Visualisation Tool to enable users to explore employment prospects within local authority areas


  • achieved Consumer Prices Index including owner occupiers’ housing costs (CPIH) National Statistics status re-accreditation, with CPIH becoming ONS’s lead measure of inflation

  • delivered provisional spatial adjustment factors to Eurostat for use in the calculation of UK purchasing power parities (PPPs)

  • published research investigating existing data sources to develop regional price indices

Beyond GDP – broader measures of welfare and activity:

  • published a dashboard of indicators in the economic well-being release

  • commenced an investigation of alternative indicators of welfare as part of the ESCoE democratic measures of income project

  • published an expanded set of health accounts based on international guidelines

Next steps

Over the next two years, ONS has a substantial development agenda to implement further significant improvements, which are already being worked up into economic statistics. These include the following.

Modern economy and the national accounts:

  • implement the new GDP publishing model including monthly GDP

  • UK National Accounts, The Blue Book and UK Balance of Payments, The Pink Book 2018 will include development of efficient trade systems, will utilise new and improved administrative systems and include improvements to the data and methods used to calculate figures for funded public sector employee pensions

  • Blue Book and Pink Book 2019 will include the introduction of double deflation in the measurement of GDP and a range of improvements to the estimation of capital stocks; full details of the improvements planned will be published in late summer 2018

  • our research agenda will continue to support these developments, for instance by analysing the impact of double deflation implementation and researching new data sources to understand the impact of replacing existing data

Trade and international statistics:

  • continuing to build user confidence in UK trade statistics, working to achieve reaccreditation of National Statistics status o providing greater granularity of trade statistics for users to better inform policy o further our work on understanding and resolving asymmetries in trade data beginning with the USA, Ireland and Germany

Devolved, regional and local statistics:

  • continue to develop local authority level GVA and GDHI data work, exploring the use of administrative data to take these down to more flexible geographies

  • develop quarterly output indicators for the nine English regions, providing timely real GVA growth estimates by region and a range of component industries

  • expand the industry breakdown for regional accounts

Productivity and the supply of labour and capital:

  • publication of a productivity plan, which will comprehensively map out our ambitious plans for productivity statistics

  • publishing experimental quarterly multi factor productivity (MFP) estimates

  • continuing to develop the Labour Force Survey model to produce single month estimates


  • continuing to develop household cost indices, including producing an index for the capital element of mortgage repayments and a methodology for student loans

  • making a number of improvements to CPIH, as reflected in our Consumer Prices Development Plan

  • reviewing the boundaries for locations in our Consumer Prices Indices sampling frame used for price collections

Beyond GDP – broader measures of welfare and activity:

  • collecting data on time use, specifically geared towards new forms of digitally-enabled activities; findings of this survey will be important for ONS to address recommendations from the Bean Review

  • continuing work on the measurement of Sustainable Development Goals (SDGs), including developing indicators by income distribution and lower geographic areas

  • integrating earnings data from the PAYE system with Census 2011 to shed new light on earnings mobility and progression

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2. Foreword

Our role is to provide the economic data and statistics that the UK needs, recognising that the economy and the needs of users are continually changing. The Economic Statistics and Analysis Strategy sets out our priorities for the coming years in the face of those evolving requirements.

In this third publication, we can reflect on some of the progress we have made. In particular, financial year ending 2018 was an important year for economic statistics in Office for National Statistics (ONS), with many important changes and improvements to our statistics. We also established the Economic Statistics Centre of Excellence, which provides us with access to a range of academic partners. The Centre has only been running a year, but is already making some important contributions to our work, which is discussed in the Strategy. We have also reflected the work of the Data Science Campus, which unlocks skills and techniques not normally associated with official statistics.

The task of developing our statistics is challenging: the economy is evolving in ways that makes economic measurement more difficult. The growth in services, often digitally delivered, the importance of intangible assets and the continuing trend of globalisation all make understanding and quantifying economic activity more difficult. We are not going to solve these problems on our own and recognise that there are many others who can help us improve.

It is important to bear in mind that not all the research we undertake, either on our own or with partners, will be appropriate for being fully implemented. We need to evaluate new techniques and ideas carefully to make sure we are improving our statistics with users in mind. We also have limited resources, so will need to carefully prioritise how and where we make changes. But whatever changes we make, we will be clear and open with users about them and their likely effects.

As ONS, we want to be open to challenge to doing things differently. This Strategy is part of the process of openness and change. I look forward to your views.

Jonathan Athow
Deputy National Statistician for Economic Statistics

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3. A path to the future

This is the third consecutive year that Office for National Statistics (ONS) has published the Economic Statistics and Analysis Strategy (ESAS). We are committed to reviewing and annually updating this strategy to reflect changing needs, priorities and availability of resources, to give a clear prioritisation for our development of economic statistics.

It has been less than 12 months since ESAS for financial year ending 2017 was published and in the future we will be launching ESAS around the start of the financial year. This third version therefore, gives us an opportunity to review our progress over the last nine months and re-assess our priorities and research objectives.

This third version highlights:

  • our priority themes for the coming year and how we are delivering them
  • latest progress on areas identified as priority in previous versions
  • next steps
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4. Priority themes

Our priorities for the future evolution, measurement and understanding of economic statistics for this third version remain unchanged from last year. They cover the following themes:

  • Modern economy and the national accounts

  • Trade and international statistics

  • Devolved, regional and local statistics

  • Productivity and the supply of labour and capital

  • Prices

  • Beyond GDP – broader measures of welfare and activity

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5. How we are delivering the strategy

We, alongside our main partners in government and beyond, remain committed to making significant improvements across all the main areas involved in the delivery and development of economic statistics, covering skills, methods, data sources, technology and processes to enable us to deliver the priorities highlighted in this strategy. Work across Office for National Statistics (ONS) is delivering improvements in all these areas.

The passing of the Digital Economy Act 2017 was a significant milestone for future economic statistics. The Act gives us legal rights to access data sources from a number of important sectors, including businesses and other private sector organisations. From April 2018, the Act will be fully implemented with the launch of the new Code of Practice by the UK Statistics Authority, opening the door to increasing flows of administrative and big data to come into ONS and enhance the statistics we develop and the degree of detail we can offer.

However, ONS has not stood still waiting for this legislative milestone. The use of administrative data has already started to contribute to economic statistics; the incorporation of VAT data into the national accounts from December 2017 was another important milestone for ONS. The Digital Economy Act will enable us to further explore the potential of non-survey data.

We are continuing to enhance our economic and analytical capability, in terms of both in-house skills and through engagement with external experts.

Following extensive recruitment campaigns, we are continuing to increase the proportion of staff accredited to one of the government’s four analytical professions and continue to run a number of recruitment campaigns, both at graduate entry and for those with more experience. Interested potential candidates can find all our recruitment campaigns at Civil Service Jobs.

With the launch of the Data Science Campus, we are continuing to build our data science skills. In response to the recommendations of the Bean Review, the Campus has been building data science skills for economic statistics and research, through:

  • delivering formal training in R and Python, and funding the MSc in Data Analytics for Government

  • mentoring data science projects for economic statistics and research on: the sharing economy; trade and investment relationships; prices from web-scraped data; improving economic surveys; regional tax revenue and the identification of holding companies of special purposes entities

  • building academic collaborations and funding postgraduates, for example, part-funding a CASE PhD studentship on anomaly detection in administrative data with Cardiff University, due to start in September 2018 and working with the Alan Turing Institute to develop their economic data science programme

Improving our reputation for high-quality analysis and statistics has led to an increasing range of partners approaching us for insight or comment and our partnerships with outside experts continue to strengthen. ONS Fellows and the ONS Economic Experts continue to work across the office and together form the Economic Experts Working Group (EEWG). We also have the Economic Statistics Centre of Excellence (ESCoE), a consortia of academics led by the National Institute of Economic and Social Research (NIESR) delivering in collaboration with ONS, that now has a number of projects underway based on the priorities identified in previous editions of this strategy.

We have developed and implemented a wide programme of engagement activities. We continue to take forward a successful programme of ONS Economic Forum events, both in London and around the UK. Together with the Royal Economic Society (RES) and Royal Statistical Society (RSS) we have formed the Economic Statistics Working Group, whose remit is to create a programme of activities aimed at improving the quality and understanding of economic measurement. During the financial year ending 2018, we have delivered seminars on Services and Intangibles, and Measuring NHS Efficiency and Productivity, all of which were well-attended and received positive feedback. Further seminars are planned on Prices, Financial Accounts and Small Area Statistics. Training courses have also been delivered by leading experts in national accounts and basic economic statistics, with further courses planned on Prices, and Inequalities.

An internal Economic Analysis and Assurance team has been established in London, now forming an integral part of the ONS’s Economic Statistics Group. This team works alongside and closely with ONS colleagues to review and provide commentary on major publications and has also taken forward a pro-active engagement programme with major, London-based users of ONS economic statistics, including bilateral and round table events.

Economic statistics in ONS contribute pro-actively across various international arenas and influence the development of various statistical domains. A few examples follow (please note, this is not an exhaustive list).


The European Statistical System (ESS) and the European System of Central Banks (ESCB) form the two main areas whereby the majority of the UK inputs take place. We are involved in all the relevant Working Groups, Director Groups up to and including the European Statistical System Committee. We are also involved in developing concepts and methods via various task forces, workshops, missions and so on, for example:

  • flash estimates of employment at T plus 30 and T plus 45 days after the latest quarter

  • land and other intangible assets, including intellectual property products

  • government deficit and debt

  • gross national income – quality assuring impact of multinational enterprise (MNE) groups

  • consistency between national accounts and balance of payments

  • various globalisation initiatives from primary source data to national accounts and balance of payments

  • regional accounts

  • global accounts

Beyond the ESS and ESCB, we are involved in various other important developments, again a few examples.

International Monetary Fund (IMF):

  • G-20 Data Gaps Initiative including the Special Data Dissemination Standard Plus (SDDS plus)

  • government debt and deficit

  • UK has an international expert on the Balance of Payments Committee

  • international engagement, training and advice to statistically developing countries such as Kenya, Ghana and Rwanda

Organisation for Economic Co-operation and Development (OECD):

  • digitalisation – various groups ranging from policy through to methodology

  • statistical units

  • trade statistics and trade asymmetries

  • pensions

  • well-being

  • financial statistics

  • UK sits on the main governance boards (for example, CES) and has an international expert on the OECD Bureau of National Accounts

United Nations Economic Commission for Europe (UNECE):

  • satellite account on education and training

  • international and national data sharing, data exchange and data reconciliation

  • UK sits on the main governance boards (for example, Bureau)

United Nations Security Council (UNSC):

o classifications

o UK has an international expert on the UN Advisory Expert Group on National Accounts

We have also provided a range of presentations, papers, training, discussants and so on at conferences, seminars and workshops across the international arena as well as developing working links with countries like China.

We have also successfully delivered a new model for our economics publications, with theme day economic commentaries each month and a revamped quarterly Economic review, which we believe provides our users with greater clarity on the headline messages being delivered, particularly by closely-related outputs.

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6. Latest progress

Since the publication of the Economic Statistics and Analysis Strategy (ESAS) in July 2017, we have made significant progress against the priorities identified. Main achievements are summarised in the following sections.

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7. Modern economy and the national accounts

The Bean Review identified several challenges to the robust measurement of the UK economy, reflecting conceptual complexity as well as the large number of independent data sources required. Some of these challenges are long-standing, whilst other new challenges continue to emerge. Important milestones have been achieved in this area.

VAT data

On 22 December 2017, we implemented VAT data into our measurement of GDP. This was one of the first steps towards the way we use large externally-sourced data instead of data collected via Office for National Statistics (ONS) surveys, in this case the Monthly Business Survey (MBS). Our aim has been to use VAT in the first instance across the three size-bands covering the smallest firms in each industry covered by the MBS. VAT data has now replaced around 50% of the target size-bands, far exceeding our initial expectations.

Further tranches of VAT data will be brought into the accounts to cover more small size-bands in more industries over the next 12 to 18 months, including work relating to retail sales and exploring the replacement of other data sources beyond the MBS, which currently contribute to the output measure of gross domestic product (GDP). Further use of VAT data will be dependent on further analysis of the data.

GDP publishing model

A response to our consultation on a future model for publishing GDP was published on 19 October 2017.

In summary, this new model, to be introduced from July 2018, will give two estimates of quarterly GDP using data from all three approaches to GDP (output, income and expenditure) around six and 13 weeks after the end of the preceding quarter, as well as the introduction of monthly GDP.

Blue Book 2017

A number of significant improvements were made to the UK National Accounts in The Blue Book: 2017 edition.

These include:

  • presenting estimates for the households and non-profit institutions serving households (NPISH) sectors separately for the first time and implementing the most significant improvement to the measurement of the household sector in a generation

  • successfully implementing a new method to improve the calculation of bond interest payments

These changes were delivered following extensive stakeholder engagement, briefing and explanation of impact through articles supporting the delivery of Blue Book 2017. GDP growth was little impacted by the total package of Blue Book 2017 changes. Real GDP growth for 2016 remained unchanged at 1.8%, with the new estimates of GDP tracking similarly to the previous-published growth path since the 2008 to 2009 economic downturn. While the economy’s peak-to-trough fall is slightly less marked (6.1% compared with the previously published 6.3%), it has grown by an unrevised 16.4% since the trough of the economic downturn in 2009.

Although these improvements had limited impact on GDP they had a profound impact on other main economic aggregates. Further details can be found in the Pink Book 2017 section.

Input-output analytical tables

Updated Input-Output analytical tables were published in March 2017 for reference year 2013, consistent with Blue Book 2016. The tables included a disaggregation to show EU versus non-EU exports of goods and services. There was no legal requirement to update these tables, which is required only every five years and within three years of the reference period. However, a decision was made to update the 2010 tables to reflect the Blue Book 2016 changes, after receiving numerous requests from main stakeholders following Brexit to enable an updated picture of supply chain impacts and to be able to split trade by EU and non-EU in the supply and use framework.

Enhanced financial accounts

The enhanced financial accounts (“flow of funds”) is a joint initiative between ONS and Bank of England (BoE), working in partnership to improve the quality, coverage and granularity of the UK financial statistics. An important part of this work is to develop whom-to-whom estimates for financial account transactions and balance sheet levels, publishing the counterparty relationships for each financial instrument rather than the total asset and/or liability position for each institutional sector in isolation. Experimental figures have been published on an annual basis since 2015 and are available via a range of innovative visualisations bringing the data to life.

Over the last year, we have also:

  • put in place partnerships with a range of commercial suppliers to access data that will improve the flow of funds statistics; this includes credit reference agency data on borrowing, and information relating to debt securities and equity

  • held user engagement events in London launching ONS’s programme of engagement with users and potential users of flow of funds statistics and pensions data in the national accounts, further supported by a range of articles and blogs building user understanding of financial statistics

  • published a series of research articles including our aspiration for increased granularity, the use of company accounts data for flow of funds and our approach to developing long-term historical estimates

Improving job vacancy statistics using online job data – Big Data Team

The ONS Big Data team is exploring the potential of using online job advertisements to improve job vacancy statistics. These data are much richer, more frequent and more timely than the data currently collected from the job vacancy survey. This project complements the Economic Statistics Centre of Excellence (ESCoE) project that is developing a skills taxonomy from online job data.

This work is part of a wider Eurostat (the statistical office of the European Union) project, which involves cooperating with statistical offices in other countries and is being coordinated by the UK. A partnership agreement has been agreed with a major UK job portal (Adzuna), as well as a data access agreement with Burning Glass. These data are supplemented with online vacancy data scraped directly from the internet.

Using innovative methods to improve statistics on UK businesses – Big Data Team

The ONS Big Data team is undertaking several strands of work to improve information on UK business.

In collaboration with Eurostat colleagues, an approach is being developed for producing statistics based on data scraped from enterprise websites. For example, it should be possible to estimate the number of enterprises in the UK engaged in e-commerce by taking data sources from the web rather than using a conventional survey instrument. Although technically complex, the initial results are promising and show that this work is worthy of further development.

Data science support is being provided to the development of the Business Index. This has involved developing machine-learning methods to match disparate sources of business data. This is currently in Private Beta but will eventually underpin an improved statistical business register.

ESCoE Project: Historical National Accounts Data

This project explores the extent to which historical national accounts data can be revised to be compatible with modern definitions. This will enable main balanced historical estimates to be provided through the ESCoE website. So far, a technical paper evaluating the inventory of historical statistics has been completed, in addition to an analysis of the provision of machine-readable data for the construction of national accounts from 1920 to 1946.

ESCoE Project: Measurement Issues in the Modern Economy

This project investigates the measurement challenges presented by new digital technology and other drivers of structural economic changes. This includes investigating how new digital business models map to existing statistics and how measurement approaches might evolve, and exploring the implications of the digital revolution for the measurement of economic welfare. A discussion paper, Do-it-yourself digital: the production boundary and the productivity puzzle has been produced.

ESCoE Project: Measuring Activity in Services Sectors

An investigation of the deficiencies in the current measures of services activities for the UK and how these might be improved has commenced. An audit report of Services Producer Price Indices has been completed. This shows that the UK is near or at the frontier in terms of methods development and the resulting deflators are in line with those from other countries, suggesting that, whilst there are issues we have identified in the UK context, there is unlikely to be significant learning to be gained from peers.

ESCoE Discussion Paper: Measuring Telecoms Deflators

This project developed new methods to account for quality change in telecommunications services, providing insights on some of the challenges inherent in measuring quality change in this fast-changing sector. The research (PDF, 1.18MB), suggests alternative methods for comment and feedback and will inform our Deflators Development project.

Export Price Index sample size increase

In November 2017, the first wave of improvements to the Export Price Index (EPI) sample was included in the Producer Price Index release. This sees an increase to the sample size and therefore the amount of price information used to calculate our estimates within a number of industries in the release. Further sample improvements will continue to take place during 2018, targeting the remaining EPI industries and the Services Producer Price Indices.

Construction statistics

The following methodological improvements are planned for 2018, as we work towards regaining National Statistics status for construction output, prices and new orders. These include:

  • improvements to methodologies to address the revisions bias for early estimates; this will be achieved via a combination of improvements to the constructed values methodology, along with the implementation of an adjustment model to address any remaining bias arising from the imputation methodology

  • improvements to the new orders to output model; this will include developing a new model which spreads new orders data to output in a much better way, using additional administrative data from Barbour ABI to support this, to achieve better quality regional and type of work construction output data

We plan to publish articles describing the method changes and impact prior to Blue Book 2018.

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8. Trade and international statistics

In June 2016, the UK voted to leave the EU, leading to a step-change in the user requirements for trade and international statistics. The trade development plan published in February 2017 has been revised in light of this. The plan sets out ambitious but achievable plans to strengthen the reliability and robustness of UK trade statistics, as well as ensuring that they are developed to meet the emerging needs of users.

A number of changes have also been made and implemented in Pink Book 2017; these improvements are in line with international standards adopted by all EU member states with worldwide best practice. These will ensure that our national accounts and balance of payments continue to provide a reliable framework for analysing the UK economy and for making international comparisons.

One of the main impacts over the last 18 months to two years in the trade space has been partnership work and collaboration across departments. Central to this has been the ongoing strengthening of our UK Trade Analytical Group with trade analysts and users from across other government departments. At the heart of our progress has been the agreement and collaboration over establishing priority developments and then the sharing of expertise and data from HM Revenue and Customs (HMRC) to enable microdata linking. Also, our relations with Department for International Trade (DIT) have been of significant importance to help ensure that our developments are meeting users’ needs.

Wider sharing of expertise, ideas and developments through the analytical group has also been crucially important with others such as the Foreign and Commonwealth Office (FCO), Department for Exiting the European Union (DExEU), Department for Environment, Food and Rural Affairs (Defra), Department for Business, Energy and Industrial Strategy (BEIS), Department for Digital, Culture, Media and Sport (DCMS) and the Bank of England. These relationships are going to continue growing in importance and intensify into the future. Value here is about user understanding (sources, assumptions, limitations), driving priorities by understanding requirements, understanding the bigger picture (policy, international, political) and using our network to improve the quality of our data and outputs.

New UK trade outputs and articles


Article:symmetries – diving deeper
into bilateral trade data

January 2018

Experimental estimates of country
by commodity data for trade in goods (balance of payments basis)

- Plan at present: current prices (CP), non-seasonally adjusted (NSA) , quarterly, 1998 to 2016

April 2018 (aligned to Trade User
event 16 April)

New trade systems feed into
Blue/Pink Book

- More country detail available in Pink Book publication

July 2018

Potential additional trade excluding non-monetary gold (NMG) series

- To improve on “trade excluding erratics” series, more specific
information for users to exclude the impact of the smoothed NMG series

In planning – likely second half

Asymmetries article 3 – deep dive
with more bilateral trade partners

In planning – summer 2018

More detailed quarterly trade in services published – full service accounts, aligned with quarterly national accounts and balance
of payments, to exploit Quarterly International Trade in Services survey and
extend what is already published by International Trade in Services

In planning – aiming for July, or
September 2018

Trade by industry

- Trade – new dimension – product group by country by industry

- Plan at present – current prices, annual data, series back to 2008, initially Classification
of Product by Activity (CPA) by Standard Industrial Classification (SIC)(input-output groups) by country

In planning

- Trade in goods in Quarter 4 (Oct to Dec) 2018
- Trade in services by end-Quarter 4 2018 (likely after trade in
goods, rather than alongside)

Pink Book 2017

A number of revisions have been implemented in Pink Book 2017 for 1997 to 2016. Impact articles were released in the run-up to the Pink Book 2017 on 29 September and 21 August, explaining the method changes that led to the revisions.

The largest revisions in the current account and the international investment position (IIP) were caused by corporate bonds interest, separating estimates for the household and non-profit institutions serving households sectors, and incorporation of new source data for securities dealers. Other revisions included using tuition fees data from the Higher Education Statistics Agency (HESA) in the trade statistics and improvements to how households’ imputed rental is calculated. For an extensive list and detailed assessment of these changes to the Balance of Payments (BoOP) and IIP see this article published on 21 August 2017.

The last few releases of the Pink Book have used a different structure to earlier versions. Rather than including separate chapters for each of the elements that make up BoP, the written part has been condensed, covering the main trends and relevant economic analysis. For example, in the latest Pink Book we analysed the effect of the deprecation of sterling on the IIP. Users have found this to be more insightful and easier to follow.

ESCoE Discussion Paper: Estimating Trade Asymmetries in Goods

Research commissioned by Office for National Statistics (ONS) was published by the Economic Statistics Centre of Excellence (ESCoE) as a technical discussion paper covering whether it was feasible to assess the relative accuracy of countries’ trade statistics, by looking at all countries’ data and seeking common patterns, by country, of over- or under-reporting. This research found the UK publishes relatively accurate trade statistics and that the majority of UK trade asymmetries were the result of relatively weaker estimates by partner countries.

Trade asymmetries

ONS has set out a focused plan of work to investigate and where possible identify solutions to the most important trade asymmetries – where the UK’s estimate of a trade flow differs from that of the partner country reporting the same flow. Initial analysis and publication of an article on UK trade asymmetries has raised awareness of the main issues and partners with whom we wish to undertake detailed explorations. We have agreed a structured plan for further ongoing research in this area including deep dives on specific individual countries and have commissioned further research into asymmetries in trade in services using the UN COMTRADE database to follow that published by ESCoE on trade in goods.

Sterling depreciation economic analysis

Analysis of the impact of sterling depreciation on balance of payments, including foreign direct investment and trade was published in July 2017. The analysis could not quantify any impact due to sterling depreciation in trade volumes. The currency depreciation has had a positive effect on foreign direct investment, portfolio and other investment credits in each quarter of 2016.

ESCoE Project: Granularity in Trade in Value-Added Data for Key Sectors

Work to produce and analyse data to allow the identification of precise industries most likely to be vulnerable to loss of single market membership is underway. Pilot studies to construct value-added from exports, with initial assessment of Annual Business Survey (ABS), International Trade in Services (ITIS), Forecasting Analysis and Modelling Environment (FAME) and HMRC methods have been produced. Working with the Bank of England we have also constructed initial estimates of trade in value added for banks and building societies. Initial findings have been published in the National Institute Economic Review, November 2017.

ESCoE Project: The Impacts of Trade on Income, Employment and Inequality in the United Kingdom and its Regions

This project develops new data and methodologies to investigate how the international competitiveness of the UK and its regions is evolving. To date two papers have been completed. One provides quantitative information on the position of the UK in the network of global value chains. Another offers a unified framework for measuring the domestic value added content of bilateral exports.

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9. Devolved, regional and local statistics

Improved and expanded devolved, regional and local data are needed to underpin public debate and decision-making in the context of devolution, decentralisation and local growth, particularly when the devolved administrations have been granted increased fiscal powers.

Local authority GVA data

Local authority (and therefore combined authority and local enterprise partnership (LEP) level gross value added (GVA) data have now been published. These data were produced in response to user need as part of the flexible geography development project. During the last year we have produced and published estimates of GVA and gross disposable household income (GDHI) for all local authorities (and local council areas) of the UK, along with the LEP areas of England, providing these measures of economic performance and household prosperity at a level where they meet the needs of local government users. This completes the first stage in our two-stage project to provide regional accounts statistics for any user-specified area of interest and it represents an important milestone in the provision of more flexible regional statistics.

Balanced regional GVA

A balanced measure of regional GVA has been delivered following our commitment to prioritise this. A consultation was held over summer 2017 on a new experimental measure and a response published Experimental balanced regional gross value added (GVA(B)) estimates were then published in December 2017, where the UK became the first country in the world to bring together income and production-based measures into a single balanced estimate for each region.

With twice the data behind it, the new measure provides the reliability and stability to underpin a much more detailed industrial breakdown than has been possible in the past (mostly Standard Industrial Classification (SIC) two-digit level) and through the use of VAT administrative data it also includes “real” volume measures (with the effect of inflation removed) one year earlier than before. The balanced estimates now form the core of a coherent set of GVA data at all levels from countries down to local authorities.

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10. Productivity and the supply of labour and capital

The unprecedented and persistent weakness of productivity since 2008 is an important feature of the UK economy and has implications for a wide range of economic policy. Changes outlined previously to the measurement of output in the national accounts have a bearing on this work, as do changes needed to deliver stronger measures of labour and capital inputs.

Annual labour productivity by region

Published labour productivity data expanded substantially in 2017. In the April release, quarterly estimates of regional labour inputs (including jobs and hours) were published for the first time. These used the same methodology employed to produce annual productivity by region National Statistics. This considerably reduced the publication lag from over a year to just a few months.

Industry output per hour estimates

In the July release, low-level (primarily division level) industry data were published on output per hour. This almost trebled the granularity of the industry breakdown available, from 26 to 67 industries. These data are now updated every quarter.

Labour productivity and development

In July, Office for National Statistics (ONS) published annual estimates of labour productivity on an industry-by-region basis. This is the first time ONS had produced estimates of labour productivity for specific industries in specific regions consistent with the headline measures. For both the division data, and industry-region data, introductory articles were written to accompany their initial release – producing an overview of the methodology employed and presenting analysis to showcase the data.

Labour productivity system development

Alongside these new data, a new system has been developed and implemented to produce the labour productivity data. This minimised the scope for human error and reduced the time it takes to process the data from days to hours.

Growth accounting

ONS compiles estimates of quality-adjusted labour input (QALI) and volume indices of capital services (VICS), which feed into experimental estimates of multi-factor productivity (MFP). In the financial year ending 2018 we have pursued a twin track development strategy, aimed at expanding the level of industry granularity and increasing the frequency of the MFP system from annual to quarterly.

During the financial year ending 2018, we have expanded the granularity of the QALI system from 10 to 19 industries and published results at this level. This involved development from scratch of an innovative approach to include additional source data from the Annual Survey of Hours and Earnings (ASHE), to buttress information from the Labour Force Survey (LFS). We expect to have developed an experimental 64-industry QALI system by the end of the current financial year.

Growth accounting splits growth in output into the contribution from labour inputs, the contribution from capital inputs, and the residual. Previously published at aggregated levels, we are developing this analysis at an unprecedented level of granularity of labour and capital inputs for A64 industries and for the first time as a quarterly publication. This has proved challenging, as sectoral labour market information is limited and alternative sources can reveal conflicting messages. But we now have coherent industry by sector estimates of hours worked and labour income.

In terms of improving the frequency of MFP, the main block to progress is VICS, which to date has been developed as an annual system only. In the second half of the financial year ending 2018, we have developed and populated a quarterly VICS system, building on work undertaken within the capital stocks redevelopment project. The first results were published in February 2018.

Microdata analysis and co-ordination

In the past year, ONS has made notable contributions to the productivity debate by undertaking extensive microdata research using new and existing data sources. This has produced a series of quarterly research articles focused on improving our understanding of the UK productivity landscape, comprising the dispersion of firm-level productivity and analysis of productivity across various business types. This has included analysing the productivity of firms that differ by industry and size, in their management practices and foreign direct investment (FDI) status.

These research outputs, alongside our earlier work on management practices, continue to attract extensive interest. They have been used by a wide range of stakeholders, including government departments – as evidenced by the references to our research in the recent Industrial Strategy White Paper among others – think-tanks and the academia – such as the London School of Economics (LSE) Growth Commission’s 2017 report and the Organisation for Economic Co-operation and Development (OECD)’s Statistics Newsletter (July 2016) – and the media.

To develop new areas of research, we continue to support the wider research community with timely access to new datasets such as the Annual Respondent Database (ARDx) and the 2016 Management Practice Survey (MPS) – through the Secure Research Service (formerly the Virtual Microdata Laboratory – VML) and the UK Data Archive (UKDA)’s Secure Data Service. We have also successfully developed and run the expanded Management and Expectations Survey (MES), with initial results delivered in Quarter 1 (Jan to Mar) 2018.

New criminal justice quality adjustment in public service productivity

ONS delivered the first new Atkinson-style quality adjustment in the measurement of public service productivity since the initial wave developed in the early 2000s. The new quality adjustment covering criminal justice contains four components:

  • re-offending

  • prison safety

  • custody escapes

  • courts’ timeliness

and delivers a significant enhancement to the public service annual productivity estimates published in January 2017, providing far clearer insight to users about productivity in this service area.

Infrastructure statistics

In 2017, ONS started a programme of development work on infrastructure statistics. The aims of this work are to develop measures of the value of infrastructure investment, stocks and services, and to better understand how infrastructure influences productivity growth. In July 2017, we published our first article on developing new measures of infrastructure investment. This presented our findings from a review of existing approaches to defining and measuring infrastructure as well as new experimental data on infrastructure investment for the public and private sectors.

Our analysis to date has focused on economic infrastructure (transport, energy, water, communications, waste and flood defences); the scope of this work could be extended in future to include housing and social infrastructure.

Healthcare productivity

ONS has been developing the public service healthcare productivity series. In response to feedback from policy analysts, the processing system has been redeveloped to enable the production of healthcare productivity for England-only on a financial year basis. In addition, the labour inputs have been redeveloped to incorporate more precise NHS monthly workforce statistics and a number of small developments have been made to intermediate consumption, outputs and the process for converting financial year data to calendar year.

Statistics on intangible assets

In 2017, ONS took over responsibility for producing measures of intangible assets and carried out work to update these estimates with the latest available data. This is part of a wider piece of work to examine current coverage and measurement of intangible assets and identify where improvements could be made. In February 2018, we published new estimates of intangible investment in the UK for 2015, building on work previously commissioned by the Intellectual Property Office (IPO) and methodology developed by Goodridge, Haskel and Wallis of Imperial College London. In producing the estimates we also reviewed the current estimation methods and identified future development work that could be carried out to inform future estimates.

Public sector efficiency

ONS seconded a member of staff to work with the HM Treasury project team supporting Sir Michael Barber to report on improving value in public spending. Sir Michael Barber published his report Delivering better outcomes for citizens in November 2017, which recognised ONS as “a world-leader in public sector productivity measurement methodology”. The report recommended a “Public Value Framework”, which will be further refined and developed through piloting it with departments over the next few months.

The framework has four pillars:

  • Pillar 1 – Pursuing goals
  • Pillar 2 – Managing inputs
  • Pillar 3 – Engaging users and citizens
  • Pillar 4 - Developing system capacity

The pilots will both test the content, structure and utility of the Framework and explore the most effective means of using it to reach judgements.

Education efficiency

As part of our public sector efficiency work, ONS has developed a tool to identify financial risk in local authority (LA)-maintained schools in England working with the Education and Skills Funding Agency in the Department for Education. Using data science techniques and publicly available school level data, indicators of financial risk were identified and summarised in a user-friendly tool. The tool allows local authorities to monitor the financial health of their schools and will help support conversations between local authorities and the Department for Education about financial risks.

Families and the labour market

We published analysis on Families and the labour market in September 2017, which focused on how the employment of men and women with children in England has changed over the past two decades and gave an insight into how families organise their economic activity. This article was produced to inform the new policy on the childcare offer of 30 hours free childcare for three- and four-year-olds in England and tax-free childcare. The statistics included in this article will be updated on an annual basis and will help inform the progress made on implementing the new policy.

Working and workless households

Statistics on the economic status of households in the UK and the people living in them have moved from twice-yearly to a quarterly publication. We also introduced a Children living in long-term workless households in the UK statistical bulletin.

Employment prospects data visualisation

A new ONS Employment Prospects Data Visualisation Tool has been developed by the ONS Data Science Campus in collaboration with Mango Solutions and the Cabinet Office. This interactive tool has been designed to provide government analysts and policy-makers a platform in which to explore a variety of variables designed to provide information about employment prospects within local authority areas.

International immigration and the labour market

ONS published an article on International Immigration and the Labour Market in April 2017, which provided information on the number and characteristics of migrants in the UK labour market in 2016. In particular, it focused on industry, occupation, hours worked, earnings and skills.

The analysis showed that international migration has had a significant impact on the UK labour market – it is particularly important to the wholesale and retail, hospitality, and public administration and health sectors, which employ around 1.5 million non-UK nationals. It also showed that migrants from Eastern Europe are likely to work more hours and earn lower wages than other workers and that many EU migrants are more likely to be over-educated for the jobs they are in.

Non-UK nationals

We have improved reporting of non-UK nationals in the labour market. Following consultation with the Government Statistical Service (GSS) Best Practice Team, colleagues in Migration Statistics Unit and the Home Office, we have improved the explanatory commentary in the non-UK workers article to explain more clearly the strengths and limitations of the data and the purposes for which the data should, and should not, be used. In particular, we have explained more clearly the relationship between non-UK employment statistics and migration statistics and provided more clarity regarding the accuracy of the statistics.

Civil Service statistics

The Civil Service statistics 2017 statistical bulletin presenting civil service employment statistics including regional analyses, diversity and earnings statistics for the civil service population, was published three months earlier than the previous year.

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11. Prices

Prices statistics are an important indicator of how the economy is behaving and this is reflected in the attention attracted by the suite of price indices we publish.

CPIH launch and rebadging

In 2017, the Consumer Prices Index including owner occupiers' housing costs (CPIH) was re-accredited with National Statistics status (PDF, 159KB) following extensive user engagement, a review of quality assurance procedures for administrative data and a number of new publications. These include a detailed CPIH Compendium and ongoing articles that compare different sources of rental data and different approaches to measuring owner occupiers' housing costs. CPIH became Office for National Statistics’s (ONS’s) lead measure of inflation in March 2017.

Spatial adjustment factors

We have successfully produced and delivered provisional spatial adjustment factors (SAF) to Eurostat for use in the calculation of UK purchasing power parities (PPP). The SAF allow the PPP price data, which is collected mainly in London, to be adjusted to a UK level. The SAF data will be used to produce Relative Regional Comparable Price Indices (RRCPLs) for the UK, published in early 2018, which will provide a relative comparison of 2016 price levels across the UK.

Implementation of ECOICOP classification

We successfully delivered an extra level of aggregation into consumer price inflation measures (CPI, CPIH, CPIY, CPIHY and CPI CT) in compliance with European regulation Article 3 (6) Number 2016/792. This was first published in March 2017 and a bedding-in period is now under way for this additional level of detail.

Double price update

A double chain-link is used in the UK's CPIH and Consumer Prices Index (CPI) to avoid the practical problem of having to run two price collections for Retail Prices Index (RPI), which requires a January reference period and the CPIH, which requires a December price reference period. In March 2017, we implemented an improvement to the double chain-link methodology where weights are price updated twice: once in January and again for the February to December period. This improvement brings the methodology mathematically into line with a single chain-linked index.

CPIH household groups

In November 2017, we published CPIH-consistent inflation rate estimates for UK household groups (2005 to 2017), which presented experimental CPIH indices for different sub-groups of the UK population, by income decile, expenditure decile, retired and non-retired households and households with children. This research is designed to better describe households’ different experiences of changing costs, an issue that has been brought to the fore in recent times as inflation has increased.

Regional Price Indices

Research funded by ONS investigating the potential to use existing data sources to develop regional price indices was published in November 2017. This research demonstrated the limits of the currently available data: whilst measures could be created and over the long-term used to assess trend inflation by region, there was volatility in the short-term, driven by erratic changes in weights.

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12. Beyond GDP – broader measures of welfare and activity

While gross domestic product (GDP) is an internationally accepted and useful measure of the size of the economy, its limitations are widely acknowledged. The Bean Review raised challenges around capturing activities where no market transaction takes place, for instance, time spent by households on production activities such as childcare and transport. In addition, GDP estimates make no allowance for the depletion of natural resources that may be inherent in many forms of economic production.

Sustainable Development Goals

In collaboration with the Data Science Campus, we have launched the alpha version of the Sustainable Development Goals’ (SDGs’) reporting platform alongside a review of the data collected so far for the UK (SDGs’ progress and possibilities: November 2017).

Economic well-being

A new dashboard of indicators is now included in the Economic Well-being release. Main indicators include GDP per head, net national disposable income per head and median equivalised disposable income.

Low carbon and renewable energy economy

We published first year-on-year estimates from the Low Carbon and Renewable Energy Economy Survey for the first time in 2017. This is following demand for green economy estimates from a number of government departments.

Environmental protection expenditure

We published first estimates from the Environmental Protection Expenditure (EPE) survey since taking over the survey from Department for Environment, Food and Rural Affairs (Defra). Following this, we submitted EPE accounts to Eurostat for the first time.

Natural capital accounts

We published the amount and value of vegetation removing pollution from the atmosphere spatial maps for 2007, 2011, 2015 and projections to 2030. A summary article was also published. This work, produced in collaboration with the Centre for Ecology and Hydrology, is an important milestone for the natural capital project. The UK is the first country to produce these data on a national scale and is our first fully spatial natural capital account.

ESCoE Project: Democratic Measures of Income Growth

An investigation of alternative aggregate indicators of welfare that are not subject to the criticism that they are, in effect, weighted by income and expenditure. This includes:

  • quarterly estimates of median household income and development of a nowcasting model that can be used to produce timely estimates

  • developing equal-weighted measures of income growth

  • exploring deflation issues based on the concept of the cost of a given level of welfare as an alternative to the traditional “basket of goods” approach

So far, work has been completed on quarterly estimates of median household income and a regression model to nowcast quarterly median income has been developed. A number of papers have also been completed, including a paper describing the estimates of growth of log income, published as an ESCoE discussion paper 2018-02 and a report on the practicality of using tax records to measure household incomes.

Health accounts

In April 2017, Office for National Statistics published an expanded set of UK Health Accounts, healthcare spending statistics produced according to the Organisation for Economic Co-operation and Development/Eurostat/World Health Organisation internationally-comparable System of Health Accounts 2011 guidelines. This publication included the first release of the complete set of the three core tables required under the relevant European Commission regulation and included a number of additional sets of analysis deemed to be a high priority for users by stakeholders in the UK Health Accounts Steering Group. Among other developments, the new information incorporated in the health accounts includes:

  • more detailed analysis of private sector healthcare, including analysis of private spending by provider type

  • new figures for long-term social care spending

  • additional analysis of preventive spending

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13. Next steps

This section summarises our priorities and research objectives for developing and enhancing economic statistics. In addition to developments under each of the six themes, we remain committed to making significant improvements to our technology, methods, data sources and processes to enable us to deliver the priorities highlighted in this strategy.

We will be delivering an improved "hub and spoke" model for the use of economics expertise in Economic Statistics. Our Economic Advice and Analysis division will form the hub and embedded economists forming the spokes, to improve the effectiveness of both the central economics team and those economics resources embedded elsewhere in the group and beyond.

We have also developed a new internal process to manage economic statistics research, bringing a number of existing boards to deliver a more streamlined system, detailed in Annex A.

We will continue to engage and collaborate with external economic experts, including delivering research through the Economic Statistics Centre of Excellence (ESCoE).

Longer-term research priorities

To support and guide the next generation of development we see the following primary research areas where significant challenges remain:

  • the measurement of quality and quality change, particularly in relation to services; within this area we are particularly interested in the relative strengths and weaknesses of different methods, up to and including whether the current A, B, C framework contained in international guidance has kept pace with changing needs

  • the behaviour of multinational enterprises and whether improvements to how these are captured in the national accounts can be achieved

  • the measurement of intangible assets and their impact on economic activity, including the productivity puzzle

  • the factors causing the productivity slowdown; whilst now an established issue, our focus continues to be providing clarity for main stakeholders around the causes of this phenomenon

  • the measurement of services in general, particularly as new survey data become available

  • the distributional pattern of income, consumption and wealth, around the averages and total produced in economic statistics; in the next year, we also plan to develop more partnerships to work with us to increase our understanding of what and how households save and how to interpret the UK saving ratio compared with other nations

  • providing more detailed granular estimates, covering smaller geographical and industrial divisions, or particular population groups and identifying mechanisms to deliver these in a timely fashion

  • whilst there has been a substantial debate relating to the production boundary and potential movements between the productive and household sectors, specifically relating to digital goods, Office for National Statistics (ONS) is interested in moving to the particular challenges of estimating values for expenditure, income, and output measures for these products, particularly those outside the productive boundary, such as free digital content so that, irrespective of eventual decisions on classification, we can provide estimates of the value of these goods to the economy and/or consumers

We will shortly open a mechanism via the ONS website for individuals or bodies who have ideas for developing any of these areas to submit applications to our new Economic Statistics Innovation Board, which will be prioritising our research agenda in the future. This mechanism will provide a means for us to identify new rising issues and new approaches to the issues listed previously.

Immediate research and development priorities

Over the next two years, ONS has a substantial development agenda to implement changes already being worked up into economic statistics. Not all these developments are in a finalised state, however, so we are eager to use research to support and help us clarify our thinking on these important priorities.

The modern economy and the national accounts

Each year, the annual UK National Accounts, The Blue Book and UK Balance of Payments, The Pink Book deliver significant improvements to methods and data sources to ensure that the UK National Accounts continue to provide the best possible framework for analysing the UK economy and for comparing it with those of other countries.

Future Blue and Pink Books will be at the core of the longer-term transformation programme launched following the Barker-Ridgeway Review in 2014 and which also includes the recommendations from the Bean Review (2016).

Our plan is to transform all aspects of the national accounts through implementation of new data, new methods, or processing improvements and the flow chart highlights some of the main improvements we are making to the three different approaches to measuring gross domestic product (GDP).

Blue Book and Pink Book 2018

Development of efficient trade systems enabling the flexibility for future analysis and the publication of more granular trade data to inform policy. This is a cornerstone of improvements to trade statistics outlined in the UK Trade Development Plan.

Utilising new and improved administrative and survey data sources:

  • using early results from the new Purchases survey to inform the measurement of inputs into the production process; it is our intention that these data are used in full in the compilation of Blue Book 2019

  • as noted in the Quarterly national accounts: April to June 2017, provisional real-time HM Revenue and Customs (HMRC) estimates of Pay As You Earn (PAYE) total pay were used to help guide the growth of the wages and salaries component; in Blue Book 2018 this administrative source will be further used to inform estimates of wages and salaries over a longer time span; our intention is for the data to be used in full in the compilation of Blue Book 2020

  • in December 2017 we introduced VAT turnover data to enhance our short-term estimate of GDP; we will look to increase the use of these data across a number of additional industries in Blue Book 2018

Improvements will be made to the data and methods used to calculate figures for funded public sector employee pensions, an enabler to the development of enhanced financial accounts and as part of a package of improvements to increase alignment between the public sector finances and the national accounts. This work also featured in the supplementary table for pensions, published in March 2018, which will provide a fuller picture of the UK’s funded and unfunded pensions obligations.

Full details of the improvements being delivered in Blue Book and Pink Book 2018 were published in December 2017.

Blue Book and Pink Book 2019

In Blue Book 2019, we will introduce double deflation through the use of the international best practice “H” approach to supply-use balancing as the basis of our volume estimates of GDP. This will deliver on the main recommendations in the Bean Review and is the cornerstone in transforming the way we estimate GDP. In addition, we will continue to utilise new data from both administrative sources and new surveys; these include VAT turnover and enhanced use of the purchases survey and we are also hoping to use the first results from the new Annual Survey of Goods and Services.

Other developments will include a range of improvements to the estimation of capital stocks and work to address a number of areas for further improvement identified following a comprehensive audit of the methods used across EU countries.

Progress on developing a set of enhanced financial accounts for the UK also remains positive and we have plans to publish a range of Experimental Statistics alongside our official Blue and Pink Book estimates. Full details of the improvements planned for Blue Book and Pink Book 2019 will be published in late summer 2018.

Beyond Blue Book and Pink Book 2019

Blue Book and Pink Book 2020 and 2021 will continue to maximise the use of new administrative data as we integrate these data with our survey collection at a unit level. We also plan to further progress our transformation of the sector and financial accounts and balance of payments – including enhanced financial accounts.

Beyond the Blue and Pink Books

In addition, over the next 12 months in this area we will focus on delivering:

  • GDP publishing model – ahead of the move to the new GDP publication model in July 2018, we will be reviewing our survey and broader data processing timetables, as well as developing a package of products to be published as part of the new monthly and quarterly GDP publications; we will publish a paper in spring 2018 outlining the plans for implementation in more detail

  • Quarterly national accounts – we will continue to improve the content and quality of the briefing for quarterly sector accounts, for example, focus on household debt and international comparisons; the next step is to secure National Statistics status for the quarterly sector accounts

To support this agenda, our immediate research objectives include:

  • continuing research to analyse the impact of double deflation implementation

  • researching new data sources to understand the impact of replacing existing data in the national accounts and other systems

  • identifying the best methods to deliver deflators into the new double-deflated supply and use framework

  • refining the approach for the use of automated balancing

Double deflation – global methods development

Officials from ONS have led the compilation of the UN handbook on Double Deflation.

ESCoE Project: Understanding Double Deflation

A collaboration between ESCoE and ONS, this project will examine the data and deflators needed for the successful implementation of double deflation techniques, primarily the H-Method.

Work will continue with ESCoE and other partners to consider the best approach to arriving at headline GDP as we move to a new publication model, utilise new data sources and improve forecasting and estimation. Alongside this, we will continue to engage in and utilise research from across the economic statistics community to ensure the continued evolution of the measurement of GDP to reflect an increasingly digital and globalised economy.

ESCoE Project: Measuring Activity in Services Sectors

The second phase of this work will produce a series of working papers on:

  • measuring nominal and real output in financial services

  • measuring insurance output

  • scope to improve deflators for professional and business services

  • research on measuring education outcomes

  • quality adjustments in the provision of public services

ESCoE Project: Measuring GDP at Different Publishing Horizons

The main focus of this programme of research is to improve the methods used to bring VAT data into the national accounts, to enhance the quality of estimates of GDP (and components), specifically in relation to cleaning, apportionment and calendarisation. Deliverables from this project will also address opportunities to improve existing estimates through improving nowcasting methods and use of new data sources. A technical paper evaluating methods utilising Big Data for nowcasting the UK economy has been completed.

Early indicators of the economy

The Campus has been making novel use of administrative data to meet the need for early economic indicators. We have built a categorical indicator of the direction and magnitude of GDP growth rates using VAT turnover returns. Further research is being undertaken into the robustness of such a measure and ensure it can be reliably published and incorporated into regular production.

We continue to explore the potential to use new data sources. Our current priorities are PAYE data on salaries and data on expenditure by firms on intermediate consumption and capital, from the VAT dataset.

Integrating economic microdata

We have initiated a new project to deliver secondary exploitation of the administrative data we are accessing through the Digital Economy Act (2017). The aims of this project are two-fold; firstly to construct key linked datasets for analytical purposes – including the creation of a longitudinal business database for the UK; secondly congruent unit level datasets, which can support the supply and use balancing process at ONS.

Following the incorporation of VAT data into the national accounts at the end of 2017 and existing work to make use of Pay As You Earn data in labour market statistics, this project will gather and link together multiple sources of administrative data at the unit level in a multi-purpose fashion. In this work, ONS will be engaging with Department for Business, Energy and Industrial Strategy (BEIS) and researchers external to government to ensure that the resulting datasets are helpful for outside analysts.

VAT expenditure

We are investigating the use of VAT expenditure as a data source in which to derive intermediate consumption. We are currently conducting a discovery to:

  • develop and recommend methods for processing VAT expenditure data to produce estimates for intermediate consumption, for example, making conceptual adjustments

  • produce estimates using these prototyped methods to judge the quality of the data source

  • assess the impact of using estimates of intermediate consumption derived from VAT expenditure in the quarterly path of gross domestic product output measure (GDP(O)) (as compared with purely using turnover as a proxy for GDP(O) growth)

  • state a consistent set of assumptions for our internal users who are the supply use team within national accounts and regional accounts

Our objectives also include continuing to enhance the UK financial accounts and developing whom-to-whom statistics. This includes further exploring commercial and regulatory data for use within the enhanced financial accounts initiative.

In conducting this discovery we are managing the earlier milestones of regional accounts alongside our biggest potential impact in improving our statistics within national accounts.

Enhanced financial accounts

Following the delivery of our main milestones during 2017, we will continue to evaluate new data sources including commercial data and publish our findings and future plans for the data. We will continue to collaborate with stakeholders, evaluating regulatory data sources to potentially replace existing survey data within the financial accounts and to assess how data already collected by regulatory organisations could help improve our sample design of existing surveys. We will publish a series of articles on the other financial corporations sector and historic data for the households and non-profit institutions serving households (NPISH) sectors. We will publish experimental data on insurance statistics, highlighting our progress with regulatory data sources, sharing our journey with stakeholders, seeking comments and feedback and setting out our findings and next steps.

We will continue to work with international agencies such as the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) on their global initiatives to improve the quality and accessibility of financial statistics.

Towards the end of the year, we will update our existing, and also produce new, financial account visualisations, including our Sankey diagram using new or improved data sources, to better reflect the UK Financial Accounts.

Classification of financial sub-sectors

One of the objectives of the enhanced financial accounts development is to publish financial statistics broken down into granular sub-sectors. We have been investigating methods for automating the classification of the financial sub-sectors:

  • we have explored classification using neural networks and financial data from the Financial Services Surveys

  • we are working with start-up company Evolution AI to use free text from Companies House descriptors

Results from both these approaches will be published in mid-2018.

Payments data for public good

The intelligent use of data gathered by our leading financial institutions can result in faster, more detailed economic statistics. In November 2017, Barclaycard, which processes nearly half of the nation’s debit and credit card transactions, hosted a hackathon in collaboration with the Data Science Campus. This brought together 50 economists, developers, data scientists and analysts to address important economic challenges. The winning team’s proposition focused on building faster, regional indicators that provide fine detail for trending economic changes. This proposition is now being taken forward as a joint ONS/Barclaycard project, due to complete in July 2018.

Trade and international statistics

The UK’s decision to leave the EU has a significant impact upon our research priorities in this area. For instance, there is an important user need for trade data by industry to illustrate which industries will be most affected. We expect the UK’s departure from the EU to pose further questions.

One of our other main research objectives for trade is to improve our understanding of UK trade asymmetries.

Globalisation continues to present challenges; it is becoming increasingly hard to measure change in economic ownership of trade and investment flows as the structures and operations of multinationals become more complex.

New research has started to open up new possibilities, such as our work with the Economic Statistics Centre of Excellence (ESCoE) and the University of Sussex to examine trade in value added. As the research delivers more results, it will help us understand the impact trade has on value added and could prompt further industry-specific research. The availability of new data for trade, such as credit card and shipping data will also provide new opportunities, such as enhancing the geographic breakdown of trade.

Our priorities for the next 12 months in this area are:

Trade statistics National Statistics re-accreditation

We are continuing to build user confidence in UK trade statistics. This is expected to lead to reaccreditation of National Statistics status for trade.

Granularity of trade statistics

We plan to provide greater granularity of trade statistics, for example, by industry for goods and services for users to better inform policy, particularly through Brexit.

Trade asymmetries

On trade asymmetries we have continued to work at pace and build strong collaborative relationships with our counterparts in other countries measuring trade statistics to better understand the size and possible causes of UK asymmetries. We have presented our work internationally at the Organisation for Economic Co-operation and Development (OECD) Working Party on Trade in Goods and Services statistics and Royal Statistical Society (RSS) annual conference receiving strong credit for our fast progress in this area.

Following the publication of our deep dive analysis for the USA and Ireland in January 2018, outlining the results of our early investigations, particularly focused on methodological and definitional differences, we are continuing our work here and expanding to further countries with whom we have large asymmetries, notably Germany, France and the Netherlands. We will continue to share our progress in identifying the causes and set out steps that can be taken to begin to reduce our asymmetries.

Trade elasticities

Giuliana Battisti, one of the ONS Fellows, has been commissioned to explore whether the sterling depreciation and resultant movements in volumes sold could provide insights on the price elasticities of traded goods. This should report in 2018.

Devolved, regional and local statistics

Our research priorities for regional accounts include inter-regional trade and there are two ESCoE projects underway on this topic and regional prices.

The development of quarterly output indicators for the nine English regions (Nomenclature of Territorial Units for Statistics NUTS 1 level) poses a number of research questions. The most pertinent being the methodology used to include VAT data for certain industries at a regional level and the measurement approach for specific industries not covered by existing ONS surveys.

Our priorities for the next 12 months in this area are the following.

Regional accounts

We will continue with the local authority level gross value added (GVA) and gross disposable household income (GDHI) data work and will be looking to use administrative data to take these down to smaller and more flexible geographies.

ESCoE Project: Regional Nowcasting in the UK

Work has commenced to produce and disseminate timely model-based quarterly regional estimates of nominal GVA, both in current and historical periods. This project will also explore the potential to do this for real GVA using ONS’s experimental real regional GVA data.

ESCoE Project: Improving the Quality of Regional Economic Indicators

This project will extend economic statistics to regional level and improve the quality of existing data through exploring regional inter-linkages within the UK. Work will also be undertaken to develop new methods for measuring and monitoring inter-regional trade-flows, including regional fiscal data. A data map of existing UK data sources related to regional trade has so far been produced.

Regional accounts industry breakdown

The expansion of the more detailed industry breakdown and volume measures for NUTS 3 and local authority-level GVA (target December 2018).

Quarterly output indicators for the nine English regions

One of the aims of the devolution project is to develop quarterly output indicators for the nine English regions (NUTS 1 level), providing timely real GVA growth estimates by region and a range of component industries. A historical series will be published in April or May 2018 with the first regular quarterly release in December 2018 or early 2019

Productivity and the supply of labour and capital

Building on the progress made last year, we have a number of ambitious plans to develop our productivity statistics further. Specific details can be found in this sub-section. Details will also be comprehensively mapped out in a Productivity Plan, which will be published during the financial year ending 2019 period.

In terms of labour market priorities, we have a number of main research objectives. More timely measurement of self-employment and income is required. We have also had requests to provide a measure of the occupation and location of job vacancies. Response rates to household surveys continue to decline. Therefore, we also need to consider transforming the Labour Force Survey (LFS) and investigate the impact of moving this survey online. At the same time, we need to investigate the potential of new data sources for household and labour market outputs.

Our priorities for the next 12 months in this area are the following.

Labour productivity and development

We plan to continue to develop the volume of data that we publish on labour productivity and to introduce further enhancements to the quality of the data in 2018. In February 2018, we used a new industry-mapping methodology to extend our 67-industry data back from 2009 to 1994. Using this same methodology, as well as similar processing as that employed in the calculation of our National Statistics, we are examining the feasibility of using historic LFS micro datasets to extend productivity hours data back from 1994 to the mid-1970s.

As well as these additional data (and subject to user approval), the September 2018 release will contain many small improvements to labour productivity data resulting from minor improvements to the system.

The allocation effect

We plan to publish analysis of some of the underlying trends in labour productivity, including our analysis of the allocation effect – as labour shifts between more- and less-productive industries through time. In addition, we aim to expand and improve the suite of labour productivity statistics.

In March 2018, a group of minor improvements were recommended to a user group for incorporation. In the same release we published chained volume measures of labour productivity by industry-region combinations for the first time, alongside an article introducing and analysing trends in the data.

We have committed to publishing the first quarterly experimental multi-factor productivity (MFP) estimates in April 2018 and met this commitment. These estimates will provide a breakdown of changes in economic output into contributions from changes in labour quality and capital services in addition to the familiar measure of labour productivity in terms of output per hour. Most of the leading national statistical institutes (NSIs) around the world publish annual MFP estimates, but ONS will become the first to publish quarterly MFP.

Later in the financial year ending 2019 we expect to publish much more detailed MFP estimates by industry than we have published previously, at a level of detail on a par with the leading NSIs around the world. In the first instance, these may be annual rather than quarterly, as we will need to evaluate the properties of the new quarterly series.

Looking beyond these publications we expect our main focus in the financial year ending 2019 to be in two areas. First, exploiting the sectoral breakdowns developed for quality adjusted labour input (QALI) to inform analysis of productivity in the non-market sector, including working with colleagues to improve estimates of public service productivity. Second, exploiting work in national accounts to compile supply-use tables in constant prices, we plan to compile estimates that will allow us to explore the impact on productivity of accounting for changes in (real) intermediate inputs as well as changes in labour and capital.

Micro-data Analysis and Coordination Branch

In the coming year, the team is looking to deliver together with ESCoE a number of articles analysing the impacts of management, organisational practices and business uncertainty – from the Management and Expectations Survey – on productivity. Further firm-level research in various stages of progress includes linking HM Revenue and Customs (HMRC) trade and ONS survey data, development of firm-level capital stock on the ARDx to support firm-level total factor productivity (TFP)-related research. This also enables us to more fully key into some of the ongoing international initiatives including the OECD’s DynEmp and MultiProd programmes.

ESCoE Project: Developing Firm Level Microdata for Productivity Analysis

In collaboration with ONS we have successfully developed the expanded Management and Expectations Survey (MES), with initial results delivered in Quarter 1 (Jan to Mar) 2018. Work is underway to examine the role of uncertainty on firm activities and productivity, how this interacts with management practices and its implication for allocative efficiency.

Infrastructure statistics

During 2018, we will continue our work on infrastructure statistics, looking to address some of the methodological challenges in developing measures of stocks and services. This will be especially important when exploring the impact of infrastructure on productivity. An important part of that work is the need for a price index, or multiple price indices, for infrastructure assets, so as to allow analysis of investment, stocks and services over time. We plan to publish further articles with emerging conclusions from our research in mid-2018.

Statistics on intangible assets

During 2018, we intend to make further improvements to the existing methodology for estimating intangible asset investment. We will also carry out microdata analysis to explore differences in the estimates derived using this methodology with those arising from surveys, including findings from the previous Intangible Asset Survey.

In addition, ONS intends to expand the analysis to incorporate estimates of intangible investment in a growth-accounting framework. This will enable us to analyse the impact on growth and productivity of measuring a broad range of intangible assets. This will require further research on the depreciation rates and prices of intangible assets. We will continue to work closely with leading UK and international academic experts on intangible assets and ESCoE research teams to take forward our research agenda.

Big Data project: investigating the potential of using mobile phone data to produce commuter flows

As part of the work in Admin Data Census to investigate the potential of using administrative and new data sources to produce census-type outputs, the Big Data team has sourced small samples of commuter flows derived from the movement patterns of mobile phones.

The mobile phone data (MPD) flows are non-disclosive and only approximate home and work locations to a Middle Layer Super Output Area.

These MPD-flows have been compared with Census Travel To Work (TTW) data and a first paper has been published. Indications are that MPD flows correlate well with Census TTW for commuting between local authorities, however, shorter distance intra-local authority commuting is poorly estimated. Research is ongoing to understand the strengths and limitations of using MPD including comparison with the Annual Population Survey.

TTW flows have particular application to economic statistics as they are used to produce Travel To Work Areas (TTWA): an important economic geography in which a large proportion of the residential population also work. MPD are also capable of determining origin-destination flows of all journeys (that is, transport flows), which is a leading indicator of GDP.

Informing policy

ONS will continue to work with Cabinet Office to inform innovative policy development across government as part of the Future Policy Network (which includes teams such as the Behavioural Insights Team, Policy Lab, the Government Office for Science, Commercial Models, What Works, the Inclusive Economy Unit and Government Digital Service) providing research, analysis and advice on cross-cutting policy issues.

ONS will also continue to support the government's horizon-scanning projects, which are jointly led by the Cabinet Office and the Government Office for Science. Recent projects have included analysis and research in early-years education, local economic growth and analysis on the future of the labour market (which influenced the development of the Industrial Strategy Green Paper).

Progression in the workforce

Dependent on the availability of linked datasets, ONS plans to explore inequalities of progression in the labour market. This will help inform a number of government policies including full employment and the Childcare Review.

Gender pay gap

In January 2018, we published an article on the gender pay gap (GPG). This article built up from the "raw" GPG, explaining the different factors that can influence male and female pay differently, for example, occupation, age, region. These factors and other characteristics will be incorporated into a regression analysis that will present the different returns to these characteristics experienced by men and women. We explored whether by using an Oaxaca-Blinder decomposition we can quantify how much of the GPG can be explained by observed characteristics and how much remains unexplained.

Public service efficiency

Further development of productivity and efficiency estimates remains reliant upon the availability of, and access to, good quality data from departments – which will be aided by the Digital Economy Act. ONS plan to work with HM Treasury and other government departments to help implement the Public Value Framework as recommended by Sir Michael Barber in his recent report Delivering better outcomes for citizens and undertake analysis that will help inform the efficiency of public services.

Adult social care productivity

ONS is redeveloping the adult social care productivity measure. The developments will include the introduction of a quality adjustment for the first time, based on the concept of social care-related quality of life. In addition, the methodologies for the inputs and output are being overhauled, with output redeveloped to incorporate a new activity data source and provide more comprehensive coverage and improved methods for deflating inputs. A methods paper is planned to explore and analyse the measure in more detail before the new adult social care series is incorporated into total public service productivity.


ONS plans to explore with the Home Office the development of a new direct measure of police output including a quality adjustment.

Healthcare productivity

Further developments are planned for the public service healthcare productivity series, including a comprehensive review of intermediate consumption. In addition, we will be investigating the production of an experimental measure of quarterly healthcare productivity.

Labour market

We plan to continue the development of the Labour Force Survey model to produce single month estimates.

Further work will also take place to expand Claimant Count estimates with the roll-out of Universal Credit.

We will also explore opportunities to use administrative data in our outputs.

Job vacancies

The Big Data team will publish Experimental Statistics based on “nowcasting” job vacancies using web-scraped data, publish further research on business classifications and will link new business administrative data sources to the Business Index.

ESCoE Project: Using Administrative Data to Develop New Labour Force and Migration Statistics

This project will address important questions relating to labour market dynamics, in particular in relation to the non-UK born population.

ESCoE Project: Using Administrative and Big Data to Improve Labour Market Statistics

This project explores opportunities offered by government datasets to achieve a fuller understanding of labour market flows, including the potential for combining datasets to observe individual’s life cycles. A methodology paper has been produced examining the classification of occupations according to their skills requirements in job advertisements.


In addition to the next steps detailed in this sub-section, we have a number of long-term research objectives. Following the Johnson Review recommendation to improve the weights used to stratify our price sample by shop type, we have been exploring alternative sources of data and hope to be in a position to make recommendations in mid-2018.

We have been working with Southampton University to investigate the feasibility of producing a set of Regional Consumer Prices Indices (rCPIH) using the currently available Consumer Prices Index including owner occupiers’ housing costs (CPIH) dataset. An initial research report was published in November 2017, which detailed the methodology and conceptual limitations of rCPIH, but also presented a set of indices that could be produced. The report put forward a number of recommendations to improve the quality of rCPIH, which will be followed up in 2018.

We have been working with Professor Huw Dixon, Professor of Economics at Cardiff Business School to develop a method for a stock-weighted House Price Index (HPI) that would complement the current UK House Price Index, which is based on the amount of transactions that take place. Conceptually, the development of a stock-weighted HPI is difficult due to the limited availability of property attributes for the stock of UK housing. This research will put forward a methodology for overcoming these limitations and will be published in 2018.

On the advice of its Advisory Panels on Consumer Prices, ONS has prioritised improving the measurement of clothing prices. Clothing is the biggest driver of the “wedge” between the Consumer Prices Index (CPI) and Retail Prices Index (RPI). We have access to a large web-scraped dataset of clothing prices, which we will use to research better clothing collection methods.

We have initiated a review into the methods used to quality-adjust Consumer Prices Index price quotes where a non-comparable replacement item is chosen. The work will review current methods in use and devise ways of monitoring and identifying if these methods are, or no longer, appropriate.

A vision for the future data collection underpinning the consumer price statistics has been developed. This identifies the following data collection methods: point of sale scanner data for the largest retailers (including online transactions), web-scraped data for other products that are dominated by a few smaller retailers or for which attribute data is also required and manual collection, as now, where point of sale and web-scraped data are not available nor efficient.

A work programme has been developed to deliver the strategy. This consists of four main work streams:

  • methods research

  • obtaining robust sources of alternative data

  • assessing the impact on RPI and CPIH

  • development of systems to support the inclusion of new data sources in consumer price statistics

Our priorities for the next 12 months in this area are the following.

Household Costs Indices

On 19 December 2017, we published our first experimental set of Household Costs Indices. There are a number of areas, however, that still need to be developed. These include producing an index for the capital element of mortgage repayments and a methodology for student loans. We will continue to explore these ahead of our next publication in December 2018.

Temporal coverage for consumer price inflation

In March 2018, we introduced an additional price collection for fresh fruit and vegetable items in CPIH and CPI. This took place on the Friday immediately preceding index day and will improve the precision of the measurement of volatile price changes. An article was published in November 2017 detailing the change ahead of implementation in 2018.

House Price Index badging

In November 2017, the Office for Statistics Regulation (OSR) confirmed the UK House Price Index will be awarded National Statistics status if eight requirements are addressed and evidence provided by March 2018. The work to address the requirements was taken forward and implemented during the first quarter of 2018.

Location boundary review

We are currently in the process of reviewing the boundaries for locations in our Consumer Prices Indices sampling frame used for price collection. Following a successful pilot we will roll out the new boundaries for re-enumeration and replacements in 2018, which will be used for live collection in 2019. This will ensure that we are taking into account recent store closures and retail developments.

Improvements to CPIH

Following the National Statistics assessment of CPIH and the move towards making CPIH our lead measure of inflation, there remain a number of improvements to be implemented, which are reflected in our Consumer Prices Development Plan.

For example, we are exploring ways to measure the accuracy of CPIH. We recently published estimates of standard errors for expenditure weights and next year we hope to publish similar estimates of standard errors for price changes. The work will then look at how best to combine these estimates. We are also investigating extending the back series for CPIH, which we hoped to publish early in 2018. The current series extends back to 2005, which reflects the availability of suitable data sources for the owner occupiers’ housing costs component. There is a user need, however, for a longer time series and so we are looking at compiling historical data to produce a CPIH back to 1947.

Beyond GDP – broader measures of welfare and activity

Measuring gross domestric product (GDP) in the technological age is a significant and rising challenge. Activities such as household production and human capital fall outside the national accounts boundaries. There is further work to do to explore further. Measurement of the digital economy presents additional challenges, as does the continued expansion of the globalisation of production chains.

There are a range of research and development objectives under this category. We face significant challenges with regards to material flow accounts (MFA), where the cessation of the Annual Minerals Raised Inquiry (AMRI) Survey (2014 last collection year) has created data issues. The MFA are required under Eurostat regulation. This also impacts on measurement of raw material equivalents (RME), which will potentially be used as a metric in the upcoming 25-year environment plan.

For 2015 Eurostat data submission we have alternatives (British Geological Survey-provided projections). We are currently investigating alternatives and liaising with our Prodcom team to better understand the suitability of their data as a proxy or replacement.

There are also challenges relating to the Wealth and Assets Survey. Funding for the Wealth and Assets Survey is currently reliant on a consortium of government departments until at least 2019 to 2020 and one member has recently withdrawn funding. There is therefore a shortfall of funding the next two years, which is currently being assessed and measures taken to find adequate additional resource, in order to deliver the required outputs and analysis work for the next two years.

Our current priorities for the coming year under this theme are as follows.

Online time-use survey of digitally-enabled services

During 2018, ONS will collect data on time use which, uniquely for the UK, will be achieved via an online survey. The online time-use survey will be specifically geared towards new forms of digitally-enabled activities. This includes the sharing economy and the production of new valuable resources (for example, blogs and open-source software) that households produce for free. The findings of this survey will be important for ONS to address recommendations from the Bean Review and also more widely in measuring trends in gender equality of unpaid work and care. Results from this survey are expected in September 2018.

Continued work on the measurement of SDGs

This will include developing disaggregation of relevant Sustainable Development Goals (SDGs) global indicators by income distribution and lower geographic areas. Further developments of the natural capital accounts (which links with many of the targets, particularly those in Goal 15 – Life on Land) and time use data for the measurement of unpaid work detailed in this sub-section.

Inequalities Centre of Expertise

Development work is underway to bring together knowledge and expertise within ONS (and wider GSS in the longer-term) on inequalities by theme, for example, income inequality, health and individual characteristics, for example, age, gender, region. The target audience will include policy analysts, media and the general public. This new service, which will include new statistical outputs will potentially launch during 2018 to 2019.

Social mobility

We are integrating earnings data from the Pay As You Earn (PAYE) system with Census 2011 to shed new light on earnings mobility and progression. Importantly, this data will allow us to examine mobility at fine geographic levels and for different types of households and individuals, shedding new light on an important policy area. This work will be completed by May 2018 and will be delivered primarily for decision-makers within government policy areas.

“Material footprint” (RME) research

In collaboration with Department for Environment, Food and Rural Affairs (Defra) and University of Leeds, raw material equivalent (RME) research will compare different methods and decide which is best for the UK. The government’s 25-year environment plan is expected next year and we are hoping our statistics will be used for metrics within this; initial discussions indicate RME will be used.

Low carbon and renewable energy economy

As the sample population is almost all businesses, (non-financial) estimates have relatively high coefficients of variation (CVs) even with a large sample. There is no obvious administration data solution at this point. We are hoping to agree a plan of work with stakeholders.

Measuring the circular economy (CE)

The CE has become a growing area of interest; we are still considering how best ONS can be involved in this. We are keeping in touch with colleagues at Defra, and providing data where possible. We are also involved with a project for a materials database (current plans are for a scoping study), which will also facilitate monitoring the CE.

Natural capital restoration cost research

An initial study completed in 2017, with the possibility of leading further research in this area during 2018.

Using an EU grant, we plan to improve existing estimates of the UK environmental goods and services sector.

Data Science Campus Project: Mapping the Urban Forest

The value of urban nature from pollution removal alone was estimated at over £221 million in 2015. With the addition of services such as recreation, flood prevention and the noise regulation, the annual value of urban greenery to the UK economy is likely to be in excess of £1 billion.

This project has created an urban vegetation dataset for the UK using image recognition and Google Maps StreetView. Results will be published in 2018.

In addition to these areas, ONS, as part of its wider function will continue to develop and innovate in the areas of population, migration, crime and health statistics.

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14. Annex 1: Economic Statistics Innovation Board

The economic statistics research portfolio is managed through a dedicated Economic Statistics Innovation Board (ESIB) that oversees research from proposals arising from horizon-scanning through to the completed methods research. This process enables Office for National Statistics (ONS) to identify new development opportunities; explore new emerging issues in the measurement of the modern economy in relation to how they relate to the national accounts and understand how these new research methodologies relate to international standard setting.

Built into and integral to the ESIB's management and commissioning of the research portfolio are the roles of the following to provide the ESIB with advice and approval for the proposals and methodological recommendations: the Economic Experts Working Group; the ONS Methods Approval Committee (Research) and architecture/ONS Design Authority. The innovation wheel in this annex places the ESIB as the research gatekeeper between firstly, horizon-scanning and continuing into methods research, and secondly, completion of the methods research and development of new processing systems and statistics production. The function of the ESIB is to determine whether the research proposal merits investigation within the framework of firstly, international standards and guidance, and secondly, business architecture constraints.

ESIB is responsible for prioritising those research proposals that are identified as meriting investigation and deciding upon the implementation model. It is recognised that not all research proposals can be taken forward and ESIB will therefore maintain and review a research proposal backlog.

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