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The expenditure for improving the Office for National Statistics’ (ONS) labour market survey has witnessed a dramatic surge, nearly doubling to £40.4 million from an initial estimate of £24.1 million over the past year. This significant increase comes amid ongoing publication delays and mounting concerns regarding the validity of UK economic data.
A response to a freedom of information request has unveiled the expanding costs, whilst the ONS has pushed back the publication of its revamped labour market statistics to 2027, marking several postponements from the original spring 2024 timeline. The statistics agency’s efforts to enhance the monthly survey stem from an alarming decline in response rates, which plummeted to a record low of 12.7 per cent in the three months to September 2023, compared to approximately 50 per cent a decade ago.
Bank of England officials have expressed serious concerns about the reliability of economic surveys, citing complications in interest rate decision-making processes. The Bank’s governor, Andrew Bailey, highlighted in November that unreliable labour market figures had evolved into a “substantial problem.” The Bank’s chief economist, Huw Pill, previously criticised the ONS for allowing the labour force survey’s deterioration.
The issue extends beyond the ONS survey, with the Department for Work and Pensions’ Family Resources Survey experiencing similar challenges. Response rates have fallen to a mere 25 per cent from 60 per cent fifteen years ago, with a particularly sharp decline during the pandemic period. This crucial survey, which informs welfare, pensions, and labour market policies, has struggled to maintain engagement since researchers shifted from in-person to telephone interviews during the pandemic.
The Living Costs and Food Survey, essential for monthly GDP estimates, has also witnessed a significant decline in participation, reaching a record low of 22 per cent last year, down from approximately 60 per cent at the millennium’s start. The Resolution Foundation’s principal economist, Adam Corlett, warns that these data collection challenges have left policymakers “flying blind” in measuring economic success.
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