Wiesbaden Group - Tallinn 2010 Session 4:Lessons Learnt from an Administrative Data Failure Andrew Allen

Background Two main administrative sources : VAT and Pay as you earn tax- PAYE VAT - daily birth & deaths - main source PAYE - second source- quarterly employment

New PAYE system In 2008 revenue department notified us of the plan to create a new computer system. ONS worked closely on the data requirement A transition process was agreed Technical data for testing etc

The problem First files received were processed on the test database ONS holds a test version of the business register for testing system enhancements and changes Results from the test system indicated there were differences between the old and new PAYE datasets

Tactical Solution Quality problems were reported to HMRC. A new temporary solution was developed to extract data from the data warehouse in HMRC. Came too late , so we missed one quarters data. Register could not cope - had to roll forward previous employment

Tactical Solution Available The data from the tactical solution had to be extensively tested.

Quality Assurance Individual record checks Known employments were checked in high profile cases Checks against Business Register Employment survey records Telephoned sample of businesses to check suspicious employment

Quality Assurance Aggregate checks Check growth in employment caused solely by PAYE records. Many businesses updated by register survey or other surveys So needed to isolate - then check the impact of the PAYE records

Quality Assurance 3 Number of PAYE schemes changing from zero to non zero and vice versa Used information from Annual Survey of Hours to check for inappropriate pension records

Impact Checks have meant no significant impact on surveys Residual risk limited because most large business updated from the Business Register Survey PAYE used for mostly small businesses - around 17% of total employment

Lessons Learnt Administrative data is not perfect. Tax system designed for collecting tax not statistics. Important to have multiple data sources - were able to validate using these. Also impact lessoned Eg BRS and VAT

Lessons 2 Work closely with administrative data supplier To build understanding of the data This crisis led to workshop with key staff in HMRC - learnt more about the data. Different terminology between statistics and administrative world

Lessons 3 Beware of users trying to stretch the register data too far. E.g. full time equivalent employment

Conclusions Dependent on administrative data Quality cannot be controlled So : Multiple sources good Knowledge of data Dialogue with suppliers