1. Item 6 – Recent developments in improvement of expenditure data
Eurostat Education and Training Statistics Working Group - Luxembourg, June 2018

2. EU - Context
In reply to the 2012 Communication of the Commission on "Rethinking Education: investing in skills for better socio-economic outcomes"; ↓
Indicator Expert Group about "indicators for monitoring education investment (2014);
Eurostat new project (2015): "Improvement of expenditure data on education" (incl. contract running from 01/2016 to 05/2018);
In the meantime:
The Council (ECOFIN) "recognises the importance of timelier, better and integrated data (…) on major components of social expenditure" (education, health and social protection) in 2016 and 2017.
Eurostat Education and Training Statistics Working Group - Luxembourg, June

3. Context UIS-UNESCO: Methodology of national education accounts (2016)
UNECE (United Nations Economic Commission for Europe)-Task Force: develop of a framework and coordinate the pilot testing of satellite accounts on education and training as part of a more global objective of compiling internationally comparable measures of human capital (on going)
OECD: Informal Working group on Finance (indicators for Education at a Glance, Ad-hoc survey on household expenditure and methodological work)
Eurostat Education and Training Statistics Working Group - Luxembourg, June

4. Phase 1: Preparatory/Assessment phase (January 2016 to April 2018)
Eurostat project on the Improvement of expenditure data on education – A three phases project
Phase 1: Preparatory/Assessment phase (January 2016 to April 2018)
Phase 2: Discussing and agreeing a roadmap for future developments of expenditure data on education (April to September 2018)
Phase 3: Implementation of the agreed roadmap (October 2018 to end 2022)
Eurostat Education and Training Statistics Working Group - Luxembourg, June

5. Phase 1: Preparatory/Assessment phase (January 2016 to April 2018)
Eurostat project on the Improvement of expenditure data on education – A three phases project
Phase 1: Preparatory/Assessment phase (January 2016 to April 2018)
Eurostat Education and Training Statistics Working Group - Luxembourg, June

6. Main results were presented at the 2017-ETS WG
Quality assessment of the existing 'UOE' expenditure data → issues: geographical scope, private expenditure (households and other non-educational private entities), ancillary services, R&D expenditure, Public transfers to private sector and student loans;
Timeliness: pilot data collection on a subset of key indicators on UOE- expenditure on education
Main results were presented at the 2017-ETS WG
Towards a better understanding of the links between the UOE and National Accounts:
Inventory and documentation of the main methodological differences between the 'UOE' expenditure data and other finance data on education
Quantifying the main methodological differences between the 'UOE' expenditure data and other finance data on education (in 6 volunteer countries)
Main outcomes at the 2018-ETS WG
Eurostat Education and Training Statistics Working Group - Luxembourg, June

7. Main methodological differences between the 'UOE' and National Accounts – Main outcomes
Scope of education:
Formal (UOE) vs. Formal + Non-formal education (ESA2010)
ISCED 2011 (UOE) vs. ISCED97 (ESA2010)
Treatment of Early Childhood Educational Development
Geographical scope:
UOE: Residence criterion applied to educational Institutions/the education delivery mechanisms, the students as well as to the sources of funds;
ESA2010 considers that the mobile student remains resident of his/her country of origin whatever the length of his/her study stay abroad (either short term mobility or degree mobility).
Eurostat Education and Training Statistics Working Group - Luxembourg, June

8. Accounting principle:
Main methodological differences between the 'UOE' and National Accounts – Main outcomes
Education sectors:
UOE: treatment of public non-financial corporations/equal use of terms "public" & "government"
"Other private entities" (UOE) covers various institutional sectors of ESA2010
"International agencies and other foreign sources" (UOE) ≠ Rest of the world
Educational institutions (UOE) does not exist per se in ESA2010
Accounting principle:
Cash accounting principle (UOE) vs. Accrual accounting principle (ESA2010)
National practices may deviate from the general principle depending on the source of data
The difference may not be significant for some expenditure (e.g. salaries, intermediate consumption) but more important for capital expenditure
Eurostat Education and Training Statistics Working Group - Luxembourg, June

9. Inventory and documentation of the main methodological differences between the 'UOE' and National Accounts – Main outcomes (continued)
Capital expenditure:
Capital expenditure (UOE) ≠ Gross capital formation (ESA2010) as only acquisitions are covered by the UOE
Current expenditure:
Compensation of personnel:
Salaries in cash (UOE) vs. wages and salaries in cash and in kind (ESA2010)
Pension scheme operating costs (ESA2010)
Current expenditure other than compensation of personnel:
Intermediate consumption (ESA2010)
(Non-educational) ancillary services (UOE) vs. social transfers in kind (D.632 in ESA2010)
Eurostat Education and Training Statistics Working Group - Luxembourg, June

10. Inventory and documentation of the main methodological differences between the 'UOE' and National Accounts – Main outcomes (continued)
Ancillary services:
"Education-related services such as vocational and psychological counselling, placement, transportation of students, and student meals and housing, transport administration" (UOE) vs. "an ancillary activity is an activity whose output is intended for use within an enterprise" (ESA2010) and "inputs used for the production of ancillary services are recorded as intermediate consumptions (ESA2010)
Ancillary services by ISCED level (UOE) ≈ part of group 09.6 in COFOG
R&D expenditure:
R&D activities performed in tertiary educational institutions (UOE) vs. R&D on education (group 09.7 of COFOG)
Eurostat Education and Training Statistics Working Group - Luxembourg, June

11. Pilot exercise in 6 volunteer countries: UK, SE, BEfr, PT, NO and IE;
Quantifying the differences between the 'UOE' expenditure data and National Accounts data – The reconciliation exercise
Participants: statisticians/experts from the UOE and the National Accounts frameworks;
Pilot exercise in 6 volunteer countries: UK, SE, BEfr, PT, NO and IE;
Purpose: identifying and quantifying the differences between "UOE" expenditure data and National Accounts data on education and to summarise them in reconciliation tables → fostering the transparency between the two methodologies;
Flexible approach: each country adapts the timing of the exercise and the date and the agenda of the on-site visit, the scope of the exercise, the level of detail of the data to be used.
Eurostat Education and Training Statistics Working Group - Luxembourg, June

12. Quantifying the differences between the 'UOE' expenditure data and National Accounts data – The reconciliation exercise
1-Mapping transactions between UOE and ESA2010
Theoretical reconciliation tables have been developed and are made available to participating countries for consideration
2-Identifying sources of UOE and ESA2010
Both frameworks use (at least partially) the same sources of information/data. Before comparing the data, it is necessary to document their sources
3-Scope of education
It is necessary to understand if and how it is possible to exclude non-formal education from NA data on education.
4-Accounting principle
To identify if national practices comply with their methodological framework. To identify transactions for which the difference in the accounting principle impacts the data.
5- Confronting data from both frameworks
Beside the conceptual analysis, the quantification of the difference between the UOE data and the ESA2010 data on education is thus at the core of the exercise.
6 – Explaining data discrepancies
Explaining the discrepancies between the two datasets is the most difficult part of the exercise: multiples reasons (data sources, data treatment, etc.) might be at stake.

13. Quantifying the differences between the 'UOE' expenditure data and National Accounts data – The reconciliation exercise
Financing units: The UOE collects data by sources of funding (questionnaire FIN1) and the National Accounts records the transactions between institutional sectors → Analysing the correspondence between the UOE financing units and the institutional sectors of the national accounts.
Production units of educational goods and services: in ESA2010 "public educational institutions" (as defined in the UOE) are part of the general government and as such are not considered as separate institutional units because they do not have an autonomy of decision (by definition) and thus are not isolated within a sub-sector → Definition and classification of Educational Institutions should be further discussed at national level.
Eurostat Education and Training Statistics Working Group - Luxembourg, June

14. Main lessons learnt from national experiences:
Quantifying the differences between the 'UOE' expenditure data and National Accounts data – The reconciliation exercise
Main lessons learnt from national experiences:
Cooperation between UOE correspondents and national accountants: although this exercise was seen as a rather new opportunity, it appears that such cooperation is not fully new;
Scope of the exercise: the flexible approach is necessary (national time and resources constraints) but constitutes a clear limitation;
Conceptual analysis and mapping: no major criticisms but the exercise outlined the gap between the conceptual analysis and the data availability within the ESA2010 framework;
Eurostat Education and Training Statistics Working Group - Luxembourg, June

15. Main lessons learnt from national experiences:
Quantifying the differences between the 'UOE' expenditure data and National Accounts data – The reconciliation exercise
Main lessons learnt from national experiences:
Sources of data: listing and assessing the sources of data is a prerequisite but also a short term concrete outcome of the reconciliation exercise;
Scope of education: still difficult to isolate formal education from non-formal education in the NA data. From national experiences, it is difficult to estimate the formal education part when using National Accounts data for UOE purposes (e.g. Psycho-medico-social centers (CPMS) in BE; education below 6 years in NO).
Accounting principle: the difference in the accounting principle is a well identified conceptual difference but still difficult to quantify. In practice, the approach is more mixed especially when the UOE return uses National Accounts data (e.g. PT, SE).
Eurostat Education and Training Statistics Working Group - Luxembourg, June

16. Current and forthcoming outcomes:
The conceptual analysis about the differences between UOE and ESA2010:
Was made available as background material to the six volunteer countries participating to the reconciliation exercise;
Was used to prepare the documents discussed during the workshop "UOE Development of Education Expenditure Data" (Phase 2)
Is now being finalised and will be disseminated for comments by the end of July 2018 (deadline: end of September)
Material for improving the UOE methodology (Task Force)
Eurostat Education and Training Statistics Working Group - Luxembourg, June

17. Current and forthcoming outcomes:
Quantification of the differences between the 'UOE' expenditure data and National Accounts data – The reconciliation exercise:
Improve (simplify/clarify) the reconciliation exercise framework and material;
Follow-up of the reconciliation exercise in the 6 volunteer countries;
Enlarge the reconciliation exercise to all ESS members.
Eurostat Education and Training Statistics Working Group - Luxembourg, June

18. Eurostat project on the Improvement of expenditure data on education – A three phases project
Phase 2: Discussing and agreeing a roadmap for future developments of expenditure data on education (April to September 2018)
Eurostat Education and Training Statistics Working Group - Luxembourg, June

19. Phase 2: Discussing and agreeing a roadmap for future developments of expenditure data on education (April to September 2018)
Workshop on Development of Education Expenditure Data (12-13 April 2018):
Participants:
All EU-Member States (except BE and DK excused), IS and NO and Candidates and potential candidate countries (AL, RS, TR, BA and Kosovo);
EU Commission: DG EAC and DG EMPL;
OECD and UNESCO-UIS;
UNECE (United Nations Economic Commission for Europe).
Objectives:
Sharing views about the identified issues;
Preparation of a roadmap for the future.
Eurostat Education and Training Statistics Working Group - Luxembourg, June

20. Phase 2: Discussing and agreeing a roadmap for future developments of expenditure data on education (April to September 2018) - (continued)
Outcomes: a Draft roadmap for the future
WP1-Improving the existing UOE methodology: geographical scope, private expenditure (households and other non-educational private entities), ancillary services, R&D expenditure, Public transfers to private sector, student loans;
WP2-Towards a better understanding of the links between the UOE and National Accounts - main methodological issues: scope of education, education sectors (institutional sectors, educational institutions), accounting principles, capital and current expenditure, national reconciliation exercise;
WP3-Timeliness of the UOE finance data: the way forward: Discussing the possible options to get fresher/more up to date UOE finance data.
Eurostat Education and Training Statistics Working Group - Luxembourg, June

21. Phase 2: Discussing and agreeing a roadmap for future developments of expenditure data on education (April to September 2018) - (continued)
16 April 2018 – 14 May 2018: Written consultation to prioritize issues (WP1 and WP2) identified during the workshop in order to:
Finalize the draft roadmap;
Prepare the mandate and work programme for a Eurostat Task Force.
18-19 June 2018: ETS-Working Group discuss and possibly agree:
The roadmap for the future development of education expenditure data;
The setup of a Task Force to support future development of education expenditure data (three work-packages) → Item 7 of the agenda
Eurostat Education and Training Statistics Working Group - Luxembourg, June

22. Eurostat project on the Improvement of expenditure data on education – A three phases project
Phase 3: Implementation of the agreed roadmap (October 2018 to End 2022)
Eurostat Education and Training Statistics Working Group - Luxembourg, June

23. Phase 3: Implementation of the agreed roadmap (October 2018 to End 2022)
Phase 3 implements the agreed roadmap:
Operational means: Eurostat Task Force (3-years) and possible financial support;
Reporting progresses about the implementation of the roadmap to the ETS-Working group and other relevant groups (e.g. SGIB) regularly;
Coordination: strong coordination with other international stakeholders (OECD, UNESCO-UIS, UNECE)
Cooperation: developing stronger cooperation with stakeholders from National Accounts (e.g. joint workshops?)
Phase 3 possibly leads to reflections on the need to revise the EU-Regulation
Eurostat Education and Training Statistics Working Group - Luxembourg, June

24. Summary The ETS Working Group is invited to take note of:
The recent developments in improvement of expenditure data;
The dissemination of a summary of the assessment report of the UOE finance data and the conceptual analysis of the difference between the UOE framework and the ESA2010 framework by the end of July 2018 for possible comments by end of September.
Eurostat Education and Training Statistics Working Group - Luxembourg, June

25. Summary
Participants of the ETS Working Group are invited to express their views and discuss:
The overall approach of the reconciliation exercise framework:
Would the 6 countries which contributed to the pilot exercise agree to have their results shared within the ETS-WG?
Would the Working Group agree to gradually extend the pilot exercise to other countries on the basis of an improved framework (to be discussed by the Task Force?)?
What kind of Commission support could be needed to facilitate national reconciliation exercises (grants/country visit/other support)?
The Eurostat's proposal for implementation actions for improvement of UOE expenditure data
Eurostat Education and Training Statistics Working Group - Luxembourg, June