2. Executive Director, Atkinson Review
Measurement of Government Output and Productivity for the National Accounts “The Atkinson Review” Measurement of Government Output and Productivity for the National Accounts “The Atkinson Review”
Joe Grice
Executive Director, Atkinson Review

3. Subject of Review = National Accounts
Purposes and Limits of National Accounts
Macro-economic management
Measurement contribution of economic activities to welfare
Coherent with, but different from, micro-measures of efficiency of service providers or agency targets

4. Timetable
UK National Statistician, Len Cook, commissioned Review, December 2003
Interim Report published, July 2004
Final Report will be published January 2005

5. A Long-Running Story European Implementation
Conventional Approach Output = Inputs
Assumes zero productivity growth
SNA 1993 approach DIRECT measurement of output
European Implementation
ESA 1995
Handbook on price and volume measures in national accounts 2001
EU Decision of 2002

6. ONS Programme of Introducing Direct Output Measures 1998-

7. Key Findings of Interim Report
ONS among the first to introduce direct measures, but “first generation” methods need to be refined (as already in health).
Interim Report sets out a principled approach within the framework set by international guidelines.
Important to improve measures of government inputs as well as outputs.
Need for increased statistical resources to be allocated to measuring government outputs and inputs

8. Principles
Output
Output should be measured by incremental contribution to individual or collective welfare ie the added value of service concerned
Start from services provided, and seek indicators that give full coverage.
Value should be seen as adjusted for quality.
Formal criteria should be established for extending direct output measures to further services.
Measures should cover the whole of the UK.

9. Added Value Input Activities Output Outcome
Parallel with market output
Measures incremental contribution to individual or collective welfare
Value depends on quality and context

10. Principles Inputs and Productivity
Measures of inputs should be as comprehensive as possible, and should include capital services
Consideration should be given to the split between current and capital spending
Criteria should be established for price deflators applied to input spending series
Independent corroborative evidence should be sought on government productivity, as part of a process of “triangulation”

11. Triangulation Outputs Inputs … we need to work on all three.
divided by = Productivity
Inputs
… we need to work on all three.

12. Necessary Work Programmes (1)
Review has already established work programmes with Departments covering key areas
Report sets out questions that need to be addressed in each field.

13. Necessary Work Programmes (2)
Health: improved measures introduced in June 2004; further work on quality adjustment , UK coverage, GP usage; productivity article to be published
Education: improved volume and attainment measures, exploration of quality adjustments, and value of education approach, possible satellite account.
Public Order and Safety: work on division between collective and individual services, alternative output measures, UK coverage
Social Protection: work on improved coverage, UK coverage, relation with market sector.

14. Final Report (1) To be published in January 2005
Will draw on responses to Interim Report and discussions with international organisations and national statistical agencies

15. Final Report (2) Will revise and refine properties from Interim Report
Will report progress on the key agendas…
…and propose ways forward in each case
* * * * * * * * * *
Then for Len Cook, as UK National Statistician, to decide whether to accept recommendations