UK Stats Agency Is on ‘Life Support’ Warns Chair of MPs’ Inquiry

ONS statistics include inflation and retail sales estimates, as well as major labor market indexes. Photographer: Carlos Jasso/Bloomberg Photo by Carlos Jasso /Bloomberg

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(Bloomberg) — Britain’s national statistics agency is on “life support” and could be dealt a “fatal” blow if turnaround efforts fail, according to the chair of a parliamentary committee investigating the embattled body.

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In an interview with Bloomberg News, Public Administration and Constitutional Affairs Committee Chair Simon Hoare said it would take “Herculean efforts” to rescue the Office for National Statistics and called for a more energetic response.

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The ONS is trying to restore credibility after quality issues afflicting its key metrics have left markets and policymakers unable to read the world’s 6th largest economy clearly. As part of the turnaround efforts, the government is installing a new management team and the agency has diverted resources into the statistics affected.

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These include inflation and retail-sales estimates, as well as major labor-market indexes that have been rendered inaccurate by cratered survey-response rates.

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Although Hoare said there was appetite within government to revitalize the organization, he warned officials have “only got one shot in the bow,” after a string of blunders.

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PACAC, a group of backbench lawmakers appointed to scrutinize the civil service, is conducting an inquiry into the running of the statistics agency.

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“Get it wrong this time and that is a fatal body blow. I think, reputationally, the ONS is on life support,” Hoare said. “If the body rejects the transplanted organs, it’s the last rites and we’re off to the crematorium and literally starting from scratch.”

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An ONS spokesperson said its leadership “is executing with urgency the improvement plans we set out in the summer to refocus our resources and energy on our key economic statistics.” They added that the ONS recognizes the “need to rebuild trust with users and will continue to be open and transparent in outlining progress against our plans.”

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Two years on from the initial collapse of the labor-market data, Hoare raised concerns over the urgency of the response. He said there must be no “sacred cows” in fostering a turnaround. That includes whether to rethink the location of the ONS headquarters in Wales. 

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They were moved there as part of a Blair-era bid to boost regional economic growth, but led to a massive loss of expertise as London-based staff opted to quit rather than relocate. 

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Although headline unemployment figures were reintroduced last year after a temporary suspension, the labor-market data is not trusted by economists and is clouding the view of policymakers at the Bank of England.

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PACAC’s inquiry follows a scathing government report led by former civil servant Robert Devereux earlier this year. In June that revealed deep-seated cultural issues within the ONS, coming just weeks after the sudden departure of then-ONS chief Ian Diamond on health grounds.