Helping to Deliver the Devolution RevolutionChair:

Professor Nick PearceBath University

Jonathan PriceChief Economist, Welsh Government

John HoldenNew Economy

Roma ChappellDeputy Director of Public Policy Division, ONS

Andrew CarterDeputy Chief Executive Director of Policy and Research, Centre for Cities

Economic statistics and devolution – some reflections

Jonathan PriceChief Economist, Welsh Government

Our approach: a (Welsh) basket of indicators - plus text for context:

The Welsh Economy in Numbers is published at http://gov.wales/statistics-and-research/economic-indicators/?lang=en

But lack of understanding of indicators persists:From The Economist (Sept 2016):Certainly the Britain beyond London and the south-east that Mrs May wants to conquer—call it the Mayan Empire—is less economically advanced. If it were a country it would be about as rich as Spain, with a GDP per person one-tenth below the EU average. Some parts are a lot worse off. On the Isle of Anglesey, in Wales, income per person is 57% of the EU average, lower than most of Sicily. The gap between the richest and poorest parts of Britain is greater than in any other EU country; London’s GDP per person is 186% of the European average.

Implications?

Customer is always right?

Wants:• Timely, quarterly GVA• Input-output tables• Small spatial scale• Equality groupsNeeds?

Wants versus policy relevance:

Devolution

Assessing Welsh economic performance – need English regional data for context:

- Note wealth data adds a key dimension- Regional prices needed?

Data versus apportionment (1): Welsh exports

• Before 2016 methodology change around 40% of Welsh exports to EU (and less than UK average)

• After change, around 67% of Welsh exports to EU (and much more than UK average)

SITC Description New Method

£m

Rank Old Method

£m

Rank Change in Rank

Other Transport Equipment 2,818 1 129 17 16Petroleum, Petroleum Products and Related Materials

1,448 2 1,983 2 0

Iron and Steel 780 3 1,039 3 0Non-Ferrous Metals 668 4 83 24 20Electric Machinery, Apparatus and Appliances and Electric Parts Thereof not Elsewhere Specified

522 5 649 4 -1

Road Vehicles (Including Air Cushion Vehicles)

436 6 318 6 0

Miscellaneous Manufactured Articles not Elsewhere Specified

375 7 299 8 1

Medicinal and Pharmaceutical Products 369 8 480 5 -3Professional, Scientific and Controlling Ins and Apparatus not Elsewhere Specified

282 9 315 7 -2

Organic Chemicals 280 10 293 9 -1

Note: Probably >4 times as much exported to rUK as overseas…..

Data versus apportionment (2): ABS productivity

“The regional ABS methodology uses information held on the IDBR for local unit employment to compile detailed estimates below the national level. Since no local unit information is collected by the ABS, the reporting unit data are apportioned amongst the constituent local units in line with a regression model. ‘’

“Once the data have been apportioned to local units for returned reporting units, then totals are estimated for English regions / UK countries.”

Annual Business Survey: Technical Report, 2014

My view of needs:

• Context for /coordination of data releases• Clarity on data versus apportionment /

modelling• More data (to reduce role of apportionment)• Intra-UK trade a key / increasing need?• Regional prices important for assessing

economic well-being?• Why quarterly GVA?

Improving ONS data in response to the city region devolution agenda

Roma Chappell – Public Policy DivisionESCoE Conference, 22nd February 2017

The need for change

Changing policy landscape Bean Review

ONS is undergoing radical change

Regional and local statistics

ONS currently produce a wide range of economic and social sub-national data

Key regional economic outputs

Regional Accounts• Regional Gross Value Added (GVA)• Regional Gross Disposable Household Income (GDHI)• Welsh Short term indicators

Labour Market• Regional Labour Market Statistical Bulletin, monthly•Business Register and Employment Survey (BRES), annual• Annual Survey of Hours and Earnings (ASHE), annual

Productivity• Regional and Sub-regional productivity.

Business Statistics• Business Demography, annual• UK Non-Financial Business Economy (ABS), annual

Other regional outputs / activity

Ad-Hoc Analysis• Regional firm-level productivity analysis for the non-financial business economy•City Regions and Northern Powerhouse short articles• Rural urban productivity (forthcoming)

Small Area Statistics• Small Area Income Estimates• House Price Statistics for Small Areas• Small Area Housing Affordability

Geographic•Travel to work area analysis•Towns and Cities Analysis•GVA for LEPs•GDHI for LEPs• European city statistics (Urban Audit)

Other• Microdata improvement work.

Dissemination of regional and local stats

• the regional GVA landing page on the ONS website

• the dataset selection page on Nomis• the area profiles page on Nomis

Planned improvements

• A number of developments were described in the following document, published in May 2016

https://www.ons.gov.uk/economy/regionalaccounts/grossdisposablehouseholdincome/articles/supportingdevolutiondevelopmentsinregionalandlocalstatistics/2016-05-25

Devolution Programme – Regional Accounts• Balanced regional GVA - produce a balanced measure, combining

income and production measures (by end 2017)

• The regional household account - develop annual regional estimates of household final consumption expenditure and the household saving ratio (by 2018)

• Regional short term indicators – deliver quarterly output indicators for English regions (by 2018)

• Flexible geography - provide a mechanism for compiling estimates for non-standard, flexible geographical areas by breaking down existing regional measures (mainly at NUTS3 level) to smaller areas and building back up (by 2019)

Contact: trevor.fenton@ons.gsi.gov.uk

Devolution Programme – Public Sector Finances• Annual UK public sector finances – produce country and region

estimates (by 2017Q2) ONS will also continue to work with devolved administrations and other key stakeholders to produce NUTS1 estimates of using a similar approach as taken in the Government Expenditure and Revenue Scotland publication.

• Devolved taxes - work with bodies responsible for administering devolved taxes to ensure that as taxation powers are devolved there is no drop in the timeliness or quality of tax data reported in the monthly public sector finances bulletin

Contact: foyzunnesa.khatun@ons.gsi.gov.uk

Devolution Programme – Exports, Productivity and Small Area Data• Exports - Experimental estimates of services exports by region

were published in 2016 and will be updated in 2017. These supplement existing HMRC information on trade in goods by region.

• Productivity estimates – Estimates of regional and sub-regional productivity have been combined into a single output, while a programme of ad-hoc analysis investigating the sources of regional productivity differences is underway.

• Small area data – There is to be an increase in the range and timeliness of outputs, including income, poverty and house prices

Contact: richard.prothero@ons.gsi.gov.uk

Devolution Programme – Regional Prices• Regional prices development - assess suitability of the current

consumer price data for calculating regional price indices and consider alternative sources that could supplement the data.

Contact: christopher.jenkins@ons.gsi.gov.uk

• Administrative data – Cross-Cutting all aspects of the devolution programme is our exploration of alternative data sources to increase the quality and timeliness of published regional and local statistics.

Exports of Services

City Region Firm Level Productivity.

ESCoE Projects

Work Strand 3 – Regional and Labour Market Statistics

• Project 3.3: Regional nowcasting in the UK

• Project 3.4: Improving the quality of regional economic indicators

Stakeholder Engagement

• Public Policy Forum held in October 2016 organised by Centre for Cities and the ONS. A follow up event is now in planning.

• ONS Regional Economic Forums held in 2016 in Cardiff, Manchester, Edinburgh, Belfast, Birmingham and York.

• Frequent User Groups including Regional Accounts Government User Group (RAGUG), Labour Market CLIP, and the Devolved Economic Statistics Co-ordination group (DESC)

• Engagement with city regions and other devolved areas and local stakeholders is being stepped up.

ANY COMMENTS OR QUESTIONS

?

Using data to deliver devolution in Greater Manchester

John HoldenDirector of Research22/02/2017

Greater Manchester Overview

109,800 businesses

2.76m people+192,100 since 2005

Gross Value Added Source: ONS, GVA estimates 2015

GREATER MANCHESTERECONOMY, 2015

£59.6bnWALESECONOMY, 2015

£55.8bnNORTH EASTECONOMY, 2015

£49.7bn

NORTHERN IRELANDECONOMY, 2015

£34.4bn

100,000 Higher Education Students at 5 HE Institutions

Source: ONS

1.24m jobs

Challenge 1: Productivity Gap

Challenge 2: Tax and Spend Gap

Challenge 3: Geographical Gaps

Creating evidence to meet the challenges (1)

Estimated andSimplifiedPublicRevenue andExpenditureStandardisedStatisticalOutput

• A tool to use in a wider toolkit

• A single database showing all public expenditure and tax generated across all areas

• An Excel spreadsheet designed for analysts and casual users alike

Creating evidence to meet the challenges (2)• New Economy CBA model supports decision making

• Backed up by a open Unit Cost Database which provides over 600 units of public expenditure

… supported by these core activities and associated

objectives

By 2040 Greater

Manchester will be one of the world’s leading city

regions, reaping the benefits of sustainable

and inclusive growth across

a thriving Northern

economy. It will be more self reliant, connected, dynamic, inclusive, digitally-driven,

productive, innovative and

creative. A destination of choice to live, work, invest

and visit, GM will be known for the high

levels of happiness and quality of life our people

enjoy. No one will be held

back, and no one will be left behind: all will

be able to contribute to and benefit

fully from the continued success of

GM.

Strong People Strong people throughout their life course: Start Well, Live Well, Age Well•No one held back: no one left behind•Excellent integration of public services provided at the right time to enable people to become resilient and confident•Preventative rather than reactive services to achieve improved outcomes, greater efficiencies and reductions in demand for services•People equipped with the skills to succeed & progress •Strong, safe, empowered communities, able to draw on local strengths and assets to connect to the opportunities that the growth of the city region brings.

A Strong Place•Sustainable growth, driven by our globally distinctive assets and a diverse and highly productive business base •World class infrastructure and connectivity to drive growth and connect our people and businesses to that growth•A housing offer to meet the needs and aspirations of existing and future residents•Thriving and resilient communities•A digital powerhouse•A vibrant, inclusive cultural and leisure offer and an outstanding natural environment•A market facing approach to creating the conditions for growth

GM Spatial Framework

Greater Manchester Strategy vision and objectives

… impacting on wider conditions (GMS indicators)

… leading to these shared outcomes

Taking Charge

Transport 2040

A new programme to support

investment in the cultural offer of

Greater Manchester

Resilient Greater Manchester

Climate Change and Low Emissions

Implementation Plan

Police & Crime Plan

GM Investment Strategy

Increased number of GM residents gaining sustained, ‘good’ employment / supported

to remain in employment

Reduced number of GM residents claiming out-of-work benefits

A higher proportion of GM children who are school ready at five years old

Reduction in the number of GM children in need of safeguarding

Reduced crime, reoffending & anti-social behaviour. Increased support for victims

of crime & domestic abuse

Improved outcomes for people with mental health needs

Improved skill levels, including a higher proportion of the population educated to

degree level

Reduced obesity, smoking, alcohol and drug misuse

Improved transport networks & more sustainable GM neighbourhoods

Increased business start-ups and inward investment, and improved business

performance

Reduced carbon emissions and air pollution, and more sustainable

consumption and production

More people supported to stay well and live at home for as long as possible

New homes, including appropriate and affordable options for different groups

Reduced spend on reactive service provision

Voluntary & community activity

Reforming services for children

GM Connect

GMFRS Integrated Risk

Management Plan

Increase total employment to 4.3% of the UK total (an additional 199,700 jobs created)

GVA grows faster than UK and halves the growth differential against Greater London (an additional

£38.1bn in 2012 constant prices)

Increase the employment rate by 4.2% narrowing the gap with the UK average to 1.1 percentage point

Increase business start up rates to overtake the national average by >30% over next 20 years

Close the gap between the GM and UK median salary (c. 0.4% p.a. above the UK growth rate)

Build 12,900 net new homes a year, tripling the existing levels of development

Increase the proportion of peak hour journeys made by public transport, walking and cycling to 40%

Improve health life expectancy at birth to the national average by 2040

Match the UK average for the % of working-age population educated to level 4+ and the proportion of

residents with no qualifications

Increase the number of children achieving a good level of development (EYFS Profile assessment) to meet the national average by 2020, with sustained

performance to 2040

Close the crime-rate gap with the average of the most similar metropolitan forces from the current base of

2% above average

Increase the rate of reduction in carbon emissions so that CO2 is 59% lower than 1990 levels by 2035, and

80% lower by 2050

Increase the proportion of residents reporting that they have high or very high life satisfaction to above

the national average

GM Internationalisatio

n Strategy

GM Work & Skills Strategy

The Northern Powerhouse Strategy

Increased local and international awareness of, pride in, and engagement

with, GM culture

Increased GM resident well-being

Conclusions: three data priorities for devolution

• Improved availability, and use of, administrative data

• Improved sub-national data: • Priorities are population, GVA, and earnings.• Released at the same time, or before, national data.

• New measures: the inclusive economy?

www.neweconomymanchester.com

Thank you

#econstatsJoin the conversation: