The Treasury is ploughing £9bn into the Office for National Statistics (ONS) to develop cutting-edge methodologies for measuring how the UK economy is performing to provide new ‘super-fast’ indicators to inform tax and spending plans, and economic decision-making
The government said the move is in response to changes in the economy, pointing out the modern services-dominated digital economy is more complicated and fast-moving than the goods-based economy of the past.
The funding is intended to allow the ONS to implement the ‘double-deflation’ methodology of calculating GDP, bringing the UK in line with international standards, providing a more accurate picture of how the UK economy is performing, and developing better estimates of productivity and output across the economy.
The double deflation method represents a fundamental change to the way GDP is calculated by implementing a new framework which more coherently brings together all the existing data used to calculate GDP and makes better use of data on price changes to improve the consistency between real and nominal estimates.
The ONS will also develop a range of ‘super-fast’ indicators of economic activity, utilising new big data sets to create a clearer view of how the economy is changing in real time.
In addition, the ONS will train 500 fully qualified government data scientists by 2021, a ten-fold increase from 2017.
Philip Hammond, Chancellor of the Exchequer, said: ‘Our modern economy is constantly evolving so it is vital we have the data and tools to understand it.
‘Funding for new data scientists, improving our statistics and harnessing the power of big data will help us to quickly identify and address the challenges of the new economy and seize the opportunities that lie ahead.’
By Pat Sweet