1. Office for National Statistics: Regional & Local Statistics
Dev Virdee
Deputy Director, Regional & Local Division

2. PRESENTATION WILL COVER:
Drivers for regional and local data
What we currently produce
Regional Accounts
Wider range of regional/local outputs
What should be used for particular purposes - fitness for purpose
Future direction:
Allsopp review of regional statistical framework
National Statistics Quality Review of Regional Accounts

3. DRIVERS FOR REGIONAL & LOCAL DATA DEMANDS
European requirements eg ESA
Devolution - Scotland, Wales, NI, London, other English regions
More policy emphasis at local level
eg Neighbourhood Renewal, Urban & Rural policies
Need for more efficient and effective targeting of need and resources
Citizens want to know more about their area

4. Drivers 1 - European Union
Structural and Cohesion Funds
European System of Accounts (ESA95)
Urban Audit
Other information needs
UK proposals for future of Structural Funds
“A modern regional policy” consultation paper
Methodologies, timeliness
Challenges of comparability - different issues in different countries

5. Drivers 2 - UK/England Regional Policy
Public Service Agreement targets
Regional requirements:
Regional Accounts - nominal vs real, output/income/expenditure
Cost of living, prices
Inflation
Wages
Employment, unemployment, productivity

6. Drivers 3 - “Regional” Regional Policy
Devolved countries requirements
Regional Development Agencies (RDA’s)
delivering the strategy and policy
Core set of statistics for the region
compare with others
Additional statistics specific to the region
eg tourism
More detailed information for within the region

7. Drivers 4 - Sub-regional policy
RDA’s tier 2 and 3 targets
Data for specific policy initiatives
Drivers of productivity
Local Authorities’ needs
Local targets and indicators
Neighbourhood Renewal and Neighbourhood Statistics

8. WHAT WE CURRENTLY PRODUCE (1)
REGIONAL ACCOUNTS:
Regional Gross Value Added (GVA) (NUTS-1)
Sub-regional GVA (NUTS 2 & 3)
Household Accounts (NUTS 1, 2 & 3)
Gross Fixed Capital Formation (GFCF) (NUTS 1 & 2)
Individual Consumption Expenditure (NUTS 1)
Government Accounts (experimental) (NUTS 1 & 2)

9. WHAT WE CURRENTLY PRODUCE (2)
REGIONAL ACCOUNTS - CURRENT DELAYS
NUTS 1 GVA estimates published in August 2003
Estimates published in November 2002 had to be withdrawn
problems with sources and some errors in systems
Major programme of work to deal with problems
GVA and GFCF at NUTS 2 published in October 2003
NUTS 3 GVA to be published December 2003
Considering timetable for Household Accounts

10. WHAT WE CURRENTLY PRODUCE (3)
OTHER REGIONAL/LOCAL STATISTICS
Labour Market Statistics
employment, unemployment
Population
essential as denominator
Business statistics
VAT registrations, Business size analysis,
Household Surveys
Labour Force Survey, Expenditure & Food Survey, etc
etc ….

11. WHAT WE CURRENTLY PRODUCE (4)
OTHER REGIONAL/LOCAL OUTPUTS (a):
Sub-national Reporting - bring together publications
eg Regional Trends, Region in Figures, Focus on London, etc
The lead point of contact for users of area-based information
Co-ordinate Statistics for Regional Policy across government
Identifying available data for regional policy purposes and disseminating, improving signposting
Identifying gaps in data, prioritising and taking action
Identifying and supporting key geographies

12. WHAT WE CURRENTLY PRODUCE (5)
OTHER REGIONAL/LOCAL OUTPUTS (b):
Co-ordinating statistical needs for European purposes
EU Urban Audit 2
Urban/Rural definitions (being developed)
“Morphological” and “Context” approach, hierarchical
Urban/rural, rural subdivided into towns, villages, dispersed settlements
also into remote, non-remote settlements
Consultation Dec-Jan, agree and publish by April 2004
Travel to Work Areas (Labour Market Areas)
Neighbourhood Statistics, including Census

13. WHAT WE CURRENTLY PRODUCE (6)
OTHER REGIONAL/LOCAL OUTPUTS (c):
Area classifications
socio-economic classification of local authority areas (NUTS4/LAU1)
considering development at lower geographical level - LAU2 and lower
Indices of Multiple Deprivation
Different aspects of deprivation, as well as overall index
LAU2 level, considering lower levels

14. WHAT WE CURRENTLY PRODUCE (7)
NEIGHBOURHOOD STATISTICS
Very local level - Wards and Census Output Areas
Wide range, priorities currently driven by Neighbourhood Renewal needs
Domains:
Access to services
Community well-being/social environment
Crime / Community Safety
Economic deprivation
Education, skills & training
Health
Housing
Physical environment
Work deprivation
plus denominators and cross-cutting information such as urban/rural indicators

15. The Information Deficit
“The absence of information about neighbourhoods has produced a series of failings at national, local and community level ... policies can easily be mis-designed or mis-targeted”
Policy Action Team18, Better Information

16. DIFFERENCES WITHIN AND BETWEEN REGIONS
Large differences between regions
But …. greater differences within..
eg Inner London - highest GDP per head in EU, but contains some of the most deprived areas in UK

17. Manufacturing vs Services
Manufacturing more significant in East London
Services dominant in West London

18. Nitrogen Dioxide concentrations
Focus on London 2003
Higher concentrations in:
Central London
Heathrow Airport, and
around M25, M4, etc
Higher proportion of Londoners express concerns over traffic fumes than UK as a whole

19. What should be used for particular purposes (1)
Measures of regional “prosperity”:
Current headline indicator:
Gross Value Added (GVA)
Available in current prices only
GVA per head of population
Also as Index, UK = 100
And as Index, EU = 100

20. What should be used for particular purposes (2)
Historic & current key uses of GVA:
Eligibility criteria for EU Structural Funds Objective 1 (NUTS 2)
RDA Targets (NUTS 1)
Public Service Agreement Target
Comparison between Regions and against the national series

21. What should be used for particular purposes (3)
Problems with this measure:
In Current Prices - users would like “Real” GVA (constant prices) as a measure of growth
Measures economic activity - not incomes or prosperity
Denominator is not consistent
whole population, not just measure of “inputs”
residence based - huge impact on London due to commuting

22. What should be used for particular purposes (4)
When examining regional productivity:
Should use GVA per full time equivalent or hours worked
Relates GVA to measure of input (labour)
For welfare of residents of a region:
Use Household Disposable Income (HDI) per head

23. What should be used for particular purposes (5)
No single (or even 2) measures are sufficient:
Complement GVA and HDI with additional information, eg:
Business Statistics
Vacancy Rates, Employment, Unemployment
Individual Consumption Expenditure
Investment (GFCF)
Activity rates, commuting rates, productivity rates
Infrastructure Links, Property prices, etc

24. What explains differences in GVA per head? OECD view ...
What explains regional differences in GDP per capita?
What explains differences in GVA per head? OECD view ...
Sectoral specialisation = industry mix in region
Labour Productivity =
Employment rate =
Activity rate =
Commuting rate =
GDP
Employment at the workplace
Employment at the workplace
Labour force at the workplace
Resident labour force
Resident population
Labour force at the workplace.
Resident labour force

25. What explains differences in GVA per head? OECD view ...

26. Drivers of productivity that need measurement:
Skills - lifelong learning, employment choices > labour market statistics
Investment - integrated & efficient capital markets, supported by public investment > GFCF, Govt Accounts
Innovation - development & adoption of new technologies
revised/updated classifications, hedonics
Enterprise - friendly tax & regulatory environment, culture open to ideas & risk taking - new business formations
Competition - boost innovation, reduce costs, enhance quality - how to measure competitiveness?

27. ONS RESPONSE TO THE INCREASING SUB-NATIONAL NEEDS (1)
Recognise importance of sub-national statistics:
Established Divisions with key roles for enhancing regional & local data:
Regional and Local Division
Neighbourhood Statistics & Census Outputs Division
Statistical Frameworks Division (inc Geography)
Social Data Collection & Administrative Data Division
Consolidating Regional Accounts within National Accounts

28. ONS RESPONSE TO THE INCREASING SUB-NATIONAL NEEDS (2)
Major developments:
ONS Modernisation Programme
Re-engineering of systems
eg common tools for data collection, storage, analysis
Statistical Infrastructure Development Programme
eg common methods for disclosure protection, estimation, imputation, etc
Improved dissemination, eg interactive website, as well as tailored solutions such as Neighbourhood Statistics.

29. THE ALLSOPP REVIEW - AN OPPORTUNITY
Terms of Reference:
1. To advise on changes in the statistics and information necessary if the UK were to join the European single currency
2. To deliver an assessment to the Chancellor, Governor of Bank of England, and the National Statistician, on:
the regional information and statistical framework needed to support the Government’s key objective of promoting economic growth in all regions and reducing the persistent gap in growth rates between the regions;
whether the changing economic structure of the UK is being properly reflected in the nature, frequency and timeliness of official economic statistics

30. THE ALLSOPP REVIEW - AN OPPORTUNITY
Need to develop statistical framework that will support management of area-based policies
Must include consideration of wide range of needs - EU/international, UK, nations of the UK, regional, sub-regional.
Need to support identification of barriers to growth and competitiveness - eg productivity, structural change, demography, rural/urban, etc.
Should lead to step-change in commitment to sub-national dimension of UK statistics

31. THE ALLSOPP REVIEW - timetable
Review announced February 2003
Initial focus on regional aspect
June/July - scoping and consulting key stakeholders and experts
August/September - formulating views
September/October - testing conclusions
November - draft interim report
Interim report to be published in December
Final Report with Budget (March 2004)

32. NATIONAL STATISTICS QUALITY REVIEW OF REGIONAL ACCOUNTS
Looking at quality of current outputs
Looking at all aspects of quality, including relevance
Proposing a strategy for Regional Accounts for the future
Strategy to include timely & reliable estimates of key data, which include:
GVA, GFCF, on workplace basis
Household Incomes and Expenditures, residence basis
but also considering other indicators
Must have confidence of users in the statistics

33. BOTH REVIEWS:
Wide ranging implications for statistical methods and sources:
Annual Business Inquiry (ABI) is critical to GVA
current processes mainly designed for good national results
need changes in order to raise quality of regional results
National Accounts and Regional Accounts to be more integrated
Need expertise from (or on) the regions to be part of the process
Should conclude and publish early 2004

34. Much to do, but plans should lead to:
Improved synergy between sources and analyses at sub-national level, including for Regional Accounts
Better timeliness, improved accuracy and relevance
Additional advice and metadata to support the statistics
Greater user consultation at all key stages of programme development, including through peer review of outputs.
Much greater acceptance and appropriate use of outputs.

35. Any Questions?