finance

MPs slam ‘passive’ Statistics Authority over RPI measure


British MPs have called on the country’s statistical regulator to publish proposals “immediately” to rectify shortcomings in the retail price index inflation measure, accusing it of being “slow”, “too passive” and failing to “serve the public good”.

The public administration and constitutional affairs committee of MPs said in a report published on Thursday that the UK Statistics Authority’s decision to wait for a Treasury response before addressing concerns about its use of a flawed measure of inflation raised in a House of Lords’ inquiry earlier this year “rais[es] doubts about UKSA’s independence from the government as the regulator”.

The hard-hitting report concluded that Britain’s statistical system lacks independent scrutiny and called for UKSA to be split into two, eliminating tension between its role as both producer and regulator of statistics.

Bernard Jenkin, chair of the all-party committee, said: “UKSA’s conflicting dual role has led to governance issues within the organisation affecting its ability to serve the public good and failing in its duty properly to regulate national statistics”.

The MPs praised some aspects of UKSA’s work, welcoming its move in 2017 to ban the pre-release of indicators from the Office for National Statistics to government departments a day ahead of general publication. It also highlighted tentative evidence of rising public trust in official statistics.

But the report was highly critical of UKSA’s failure to resolve the shortcomings of the RPI inflation measure, which overstates price increases and has cost taxpayers £1bn a year since 2010, despite the acceptance by both the ONS and UKSA that the statistic is a bad measure of inflation.

“UKSA has allowed what was originally a simple mistake in price collection of inflation data to snowball into a major unresolved issue for a decade,” the report said.

RPI inflation is used for the uprating of the £400bn index-linked government bonds, student loans, rail fares and elements of telecoms pricing.

The committee recommended legislation to split UKSA’s functions, but acknowledged this was unlikely to be a priority for parliament and instead called on the body to have a greater separation in its production of statistics and regulatory functions, which was possible without new laws.

“Our report is clear that if parliamentary time cannot be found to pass the necessary legislation for restructuring soon, then UKSA must take other steps to separate its two roles as soon as possible,” Sir Bernard said.

The report also called for the ONS to take a stronger lead in using data to transform government while demonstrating that the public’s personal information will be protected.

The Statistics Authority said it would respond in due course. “Today’s report contains a number of substantial and detailed recommendations which will require consideration from the Authority’s Board, the Office for Statistics Regulation, and the soon to be appointed National Statistician,” it said in a statement.



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