National Statistical

Since 1997, successive governments have used fiscal targets that align with the internationally-agreed definitions used in the UK public sector finances statistics. These statistics have kept pace with external changes to provide the best fiscal measurements possible, not least with the introduction of country and regional public sector finances data in 2017. But now there are further opportunities to use alternative data sources to make these statistics more timely. Moreover, data sources and production techniques can help increase the granularity of geographical breakdowns. In this post, Jessica Barnaby looks at some improvements we’re working on.

Our public sector finance statistics not only help measure the UK’s performance against the government’s fiscal targets, but are an important part of the National Accounts. So we have been investigating potential improvements to the production of these statistics, reviewing production systems as well as the use of alternative administrative data sources.

Administrative data

So far, we have found that anonymised HMRC Pay As You Earn Real Time Information (PAYE RTI) data could be used to improve the timeliness of some public sector expenditure data, in the form of expenditure on wages and salaries.

With further work, these figures could also support the estimation of lower-level geographical breakdowns. Administrative data from VAT returns might be useful as an alternative, more timely, source of information about the revenue raised by publicly-owned corporations. Here too with further work, they might also help us make estimates of VAT receipts at a lower-level geographical split. These uses, the challenges in applying the data, and further background to this research work can be found in an article we’ve published today on administrative data.

Localised spending data

Meanwhile, in looking at more localised breakdowns of public sector expenditure we’ve found that, with some definitional adjustments, local authority financial reports can be used as a component of localised breakdowns of public sector spending. This is interesting because these reports are not only available at local authority level, but they also include information on how expenditure varies across the type of service provided. This means that we have been able to compile a complete dataset of local government expenditure by local authority area and the type of service provided – we have an interactive map that lets you explore how much local government spent in your area, and on which services.

There are a few challenges in using these data – notably, there are structural differences in how some services are funded in different areas of the UK, and the breakdown isn’t fully consistent with the measurements for local government in our national release. Another article released today, on local government expenditure, shows how the two measures reconcile, and how this granular information could be used in the context of the wider public sector.

In future

We will continue to investigate how the use of these alternative administrative data sources can enhance the timeliness and geographical detail of public sector finance statistics. We will seek to refine our experimental statistics and may also explore other novel data sources that relate to public sector expenditure. For example, we’ve also been looking at how ‘transparency declarations’ – information that public sector bodies are required to publish on themes such as single expenditure items over a certain threshold – might be used to supplement granular public sector finances, and will share the outcome of this initial research soon.

Jessica Barnaby is Deputy Director of Public Sector division at the Office for National Statistics, leading the measurement and analysis of public sector finances and output.