Lies, damned lies, and statistics: what's gone wrong at the ONS?
The Office for National Statistics has had to delay the release of trade data due to errors in its analysis – the latest setback for the beleaguered government agency.
The delay of the trade data, announced with one day’s notice, "will fuel questions over the reliability of figures produced by the ONS", said the Financial Times, after long-running problems with its key Labour Force Survey.
What did the commentators say?
"If statistics enable the state to see, then the British government is increasingly short-sighted," said The Economist's Bagehot column.
The LFS, for example, "once a gold standard of data collection, now struggles to provide basic figures". Whereas 10 years ago response rates to the survey were about 50%, they fell to just 17.3% in 2023 and are expected to be even lower in the past year. This "has left interest rate-setters without reliable employment data for almost 18 months", said the FT. Some economists "think the LFS is now more likely to record people who are at home – thus overestimating the level of economic inactivity overall", said MoneyWeek.
Those working at the ONS blame "funding constraints, a lack of modernisation and staff being afraid to raise problems", said Bloomberg. The issue of plunging response rates to the LFS "was raised internally around a decade ago", but "radical action to address the issue was delayed".
The ONS has been building up a new index, the “Transformed Labour Market Survey”, to replace the LFS. But "repeated twists and tweaks mean it may not be ready to launch until 2027", said The Guardian. Meg Hillier, chair of the Treasury Select Committee, said the delay would rob policymakers of reliable data about the jobs market, making "some of the most consequential decisions taken by the Treasury and Bank of England challenging at best and misinformed at worst".
What's next?
The ONS deserves credit for being a generally trusted source of accurate data, said Andrew Sentance on CapX. But "we need much quicker action from our official statisticians and their regulators to fix problems".
Maybe it's a wider shift in attitudes that is needed, said The Economist's Bagehot. "If the state can compel people to sit in a stale room for hours to decide if someone is a thief, it can force people to fill in a form."