Britain’s national statistics agency is set for a funding boost to improve measurement of the modern economy and provide early warning signals of any recession, the Chancellor announced on Friday.
The Office for National Statistics will be given £9m to pay for the development of new indicators and techniques to model growth following concerns that official figures are no longer appropriate for an increasingly digital and services-driven economy.
“Our modern economy is rapidly changing and it is vital we have the data and tools to understand it,” said Philip Hammond, chancellor. “Funding for new data scientists, improving our statistics and harnessing the power of big data will help us to quickly identify and address the challenges of the new economy and seize the opportunities that lie ahead.”
The increase in funding follows a 2016 review of UK economic statistics by Charlie Bean, a former Bank of England official. The report criticised the national statistics agency for failing to adapt to the digital economy and the slow pace of adoption of new data sources.
Official statistics had failed to account for the growth of services such as Uber and Airbnb which allow households to temporarily rent out their cars and houses, the report said, meaning that Britain was richer and faster-growing than figures suggested.
Friday’s funding will be used to develop “superfast indicators” of economic activity based on big data sets, the Treasury said. The ONS has already previewed new indicators based on value added tax returns, traffic flows and ship movements that it says could quickly alert policymakers to any recession.
The money will also be used to introduce a “double-deflation” method of calculating national income, that could help shine a light on Britain’s low rate of productivity growth by providing a better picture of how different industries have expanded over the past decade.
Since the Bean review the government has established an Economic Statistics Centre of Excellence to research how to measure the economy, while the ONS has established a data science campus in its headquarters in Newport.
Some of the new funding would go towards training an additional 500 government data scientists by 2021, the Treasury said.
“Recent investment in the ONS has driven some important new developments in the measurement of our rapidly evolving economy,” said John Pullinger, the UK’s national statistician. “The continuing support of HM Treasury will enable the next stage in our transformation of the UK’s key economic indicators.”