The cost of improving the Office for National Statistics’ labour market survey has almost doubled over the past year amid persistent delays to its publication, underscoring concerns over the validity of UK economic data.
A response to a freedom of information request from The Times revealed that the agency has spent £40.4 million on creating the transformed labour force survey, up from an earlier estimate of £24.1 million.
In December the ONS pushed back the publication of the overhauled labour market statistics to 2027, the latest of several postponements from spring 2024.
The statistics agency has sought to improve the monthly survey owing to a sharp drop in response rates — down to record low of 12.7 per cent in the three months to September 2023 from about 50 per cent a decade ago.
Officials at the Bank of England have said that scepticism about the findings from some economic surveys have complicated their interest rate decisions. Andrew Bailey, the Bank’s governor, said in November that unreliable labour market figures have become a “substantial problem”.
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In a letter to the ONS in May, Huw Pill, chief economist at the Bank, chided the agency for allowing the labour force survey to deteriorate.
Separate research by The Times found that responses to a government survey that underpins benefit and pensions policy have sunk to a record low, highlighting that the UK is grappling with a widespread erosion in the reliability of its key economic statistics.
The response rate to the Department for Work and Pensions’ Family Resources Survey sank to only 25 per cent in the most recent year from 60 per cent 15 years ago.
The decline in responses accelerated during the pandemic, down to 23 per cent in 2020-21 from 49 per cent in 2019-20. Researchers generating government statistics have not returned fully to in-person survey interviews since the pandemic, and use the phone instead.
The Family Resources Survey, started in 1992, tracks developments in poverty, household incomes, savings and investment, and food security. It is an important source of information for officials crafting welfare, pensions and labour market policy.
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Another survey crucial to the agency’s monthly GDP estimates, the Living Costs and Food Survey, has also suffered a tumbling response rate to a record low of 22 per cent last year from about 60 per cent at the turn of the millennium.
Adam Corlett, principal economist at the Resolution Foundation, a think tank, said that problems with “a range of official data sources” had left policymakers “flying blind about some of the data it needs to measure success”.
The ONS said: “The transformed Labour Force Survey is the long-term solution for collecting key labour market data that cannot be obtained from other sources such as the number of people out of work but actively seeking employment.
“Its online-first design means we can approach many more people in different ways to paint a richer picture of the UK labour market. However, as a new self-completion survey it has taken time to fully develop, to ensure we are achieving the quality necessary. We recently tested a shorter version of the questionnaire aimed at further improving data quality. We will provide an update on next steps in the spring.”
A DWP spokesperson said: “We use multiple years of survey data where necessary to maximise the robustness of our estimates while we are trialling new ways to encourage higher response rates.”
