Sub-Scotland economic statistic group: minutes November 2019

Attendees and apologies

• Simon Cleary (Biggar Economics)
• Jamie Coventry (Aberdeen City Council)
• Trevor Fenton (Office for National Statistics - ONS)
• Hervey Gibson (Glasgow University)
• James Harris (Office for National Statistics - ONS)
• Alex Morton (South Lanarkshire Council)
• Brian Sinclair (South Lanarkshire Council)
• Claire Ross (Highlands and Islands Enterprise - HIE)
• Niki Spence (Clyde Gateway)
• Marina Curran (Scottish Government - SG)
• Jessica Scriven (Scottish Government - SG)
• Sandy Stewart (Scottish Government - SG)
• Dette Cowden (Scottish Government – SG)
• Gayle Mackie (Scottish Government – SG)
• Jonathon Slow (Scottish Enterprise – SE)
• Iain McCreaddie (Scottish Cities Alliance)
• Rachel Dickie (Scottish Government - SG)
• David Boyle (Glasgow Council)
• Kerry Wilkie (Skills Development Scotland – SDS)
• Monika Frejeryte (Skills Development Scotland – SDS)
• Cara Connachan (Improvement Service)
• Mairi Spowage (Fraser of Allander Institute)
• Orla Kilroy (University of Manchester)

Items and actions

Agenda 

1. 11:30– 12:00 Introductions, minutes and actions of previous meeting
2. 12:00– 12:30 South Lanarkshire Council – local dashboards
3. 12:30– 13:00 ONS update
4. Lunch
5. 13:30– 13:45 Feedback from latest CLIP meeting – Paper 1
6. 13:45– 14:00 Business demography 2018 publication – Aberdeen VAT office issue
7. 14:00– 14:15 Review of ‘The statistical classification of economic activities’
8. 14:15– 15:15 Productivity model 
9. 15:15– 15:30 AOB and date for next meeting

Introductions, minutes and actions from the previous meeting

Sandy Stewart (Chair) welcomed everyone to this meeting of the Sub-Scotland Economic Statistics Group (SSESG) and members introduced themselves.

The minutes from the previous meeting were accepted and Marina Curran went through the actions.

Actions from the SSESG meeting – 30 May 2019

Action No	Action	Status	Comment/result
1	Send out the name of the OCEA twitter account where information on publications is released	Completed	Sent in meeting follow-up email
2	Approach Scotstat lead regarding email formats	Completed	Email subjects cannot be changed on the current system but should be possible when the new system is released
3	Clyde Gateway would welcome comments on the draft survey (see paper), so please email Niki (niki.spence@clydegateway.com) or Clare (Clare.ferry@glasgow.gov.uk)	Completed
4	Clyde Gateway to link up with Dette Cowden on privacy notice consideration	Completed
5	SG are going to provide some QA on the Scottish data from IDBR and personal knowledge: others are also welcome to provide similar feedback or QA	Ongoing
6	SG to provide members with Hervey’s email address for feedback/comments on who is the target audience and how should the evidence from the model be presented?	Completed	Email address provided in meeting follow-up email
7	SG to Provide members with the link to sign up to the Cities newsletter	Completed	Sent in meeting follow-up email
8	Provide links to developing Labour Market sources/ Alternative Claimant Count	Completed	Sent in meeting follow-up email
9	SG would welcome feedback on the test version of the SCRIG tool and the Export Performance Monitoring Tool	Ongoing	SCRIG tool planned to be published in January with automatic updates from statistics.gov.scot
10	Feedback would be welcome when we send out a draft of the Sub-Scotland database to members to review.	Ongoing	Sub-Scotland Economic Statistics database is still being compiled, as Travel-to-Work areas are now being added
11	Ideas/suggestions/preferences for a suitable name for the database would be welcomed	Completed	It is being called the Sub-Scotland Economic Statistics database to mirror the name of the group

South Lanarkshire Council: local dashboards – Alex Morton & Brian Sinclair

Officials from South Lanarkshire Council gave a presentation of their dashboard work – including the motivation for the work, its current form and future direction.

A feature of this work is the decision to include links to statistical reports pertinent to the subjects the indicators relate to – for example, on the employment rate links to reports on employment rates by age, gender, employment by occupation, industry, health status, etc. to provide some deeper insight into the subject. At the last count there were 480 of them.

There are two dashboards at present:-

1. A quarterly one on the labour market at a South Lanarkshire, Scotland and Glasgow City Region basis with a section specific commentary around each indicator. The indicator is given a RAG (red, amber, green) status, as arrows representing the direction of travel, and as absolute and percentage changes. Access to the underlying data in tabular form and the ability to graph it and export it is also available. Data is hosted in a SQL database, having been manually collected after updates.
2. An annual Inclusive Growth dashboard – again showing data at the South Lanarkshire, Glasgow City Region and Scotland level – with a RAG status, arrows representing the direction of travel and absolute and percentage changes. The indicators are grouped into four themes. Access to the underlying data in tabular form and the ability to graph it and export it is also available. There is no commentary sitting alongside this dashboard and a review is due to take place on whether the current indicators are fit for purpose.

The proposal is to extend the suite of dashboards to cover a range of themes – population, community safety, housing, homelessness, youth, health, etc. These will focus only on South Lanarkshire and Scottish data but have the same functionality and with no commentary. There would be links, however to the appropriate council produced reports on each theme.

Update on ONS regional statistics

Sub-national analysis – James Harris

1. It has been confirmed that funding for the Centre is to continue.

2. On the 4th of December they aim to publish an article on Decent Work by country, city region (including some Scottish city regions), unitary authority looking at hours worked, contracts, work.

3. They intend to produce a report on Business Enterprise R & D at NUTS 2 level focusing on spending.
4. Foreign Direct Investment breakdown at NUTS 2 level
5. Further work with Ordnance Survey on high streets is planned – in January 2020 it will report on the situation related to pubs
6. In February 2020, it will produce estimates of regional and local productivity – possibly down to a council level.

Regional Accounts – Trevor Fenton

1. Hervey Gibson: On 31st October, new average industry GVA figures were produced with some industries seeing a 33% rise due to improved purchases data. This led to increases of £136bn in revenue and of £520bn in sales. As a consequence, this has increased the Scottish figure by £200mn. The changes are not constant over time and change from year to year and need to be re-examined. The improvement has been very disruptive to Regional Accounts, the Index of Industrial Production and has led to changes in industrial weighting. This has led, for example, to major changes for Shetland which has seen a revision of around £10,000 per inhabitant.
2. On the 19th December, the Regional GVA estimates will be published using the same geographies as in the last publication. This will introduce new GDP estimates for all areas with a time series in both current price and volume terms. The new GDP estimates include GVA but also taxes and subsidies. It will include the new VAT data that has become available at local unit sites. A four way sector split is being used with the allocation constrained to the NUTS1 level figures. It will include nominal and real estimates with information on deflators and populations being published.
3. HMRC is developing new VAT information for Scotland and the other nations / regions and this group will be kept informed of how this work is progressing.
4. There have been some changes in the methodology but this has had little impact at the regional level but has resulted in major changes to the national accounts through the supply / use framework at the industry level and this is what is driving the changes. A revised series covering 2004 to 2016 is being produced.
5. On 2nd March 2020, a planned Regional Household Expenditure experimental series will be released. This has been delayed due to a resourcing issue. The plans are to release data down to NUTS2 level. There are concerns over the strength of the living costs data at a NUTS2 level, so they are looking at obtaining a time series of credit and debit card data to get a more complete coverage of household income and expenditure – and this should allow analyses to be produced for smaller geographical areas.
6. Access to VAT data should enable estimates to be made of GVA at the datazone level. This work has been delayed due to resourcing issues but they would hope to have this available in the first half of 2020. To an extent this is linked to the work on flexible geographies. GVA at this level will not have any industrial breakdown but some 4 sector industry breakdowns may be possible at Intermediate Geographies – through there will be a need to check for disclosure issues.
7. The flexible geographies development means that GVA and GDP figures could be produced for any geography than can be built up from datazones. There was support at the meeting for producing estimates for Clyde Gateway, HIE’s local office network areas, health board areas, national parks, the Scottish coastal zones of Marine Scotland and for the River Clyde area.
8. Work on the flexible geography project is focusing on the user interface – ideally the plan would be to allow users to electronically draw their geographical area of interest and then the system would produce the results.

Action 1: Send specifications in datazone or intermediate geography terms for specific geographic areas of interest for GDP and GVA. A time series for these will be made available back to 1998. Scottish Government will coordinate the response and circulate the list to members before forwarding to Trevor Fenton at ONS.

Feedback from the latest central local information partnership (CLIP) meeting (Paper 1) – Alex Morton

a) DWP has joined the partnership

b) ONS is reviewing the Labour Force Survey

1. Four questions will be added for 2020
2. A question on zero hours contracts has been introduced, so estimates will be available in January 2020. A paper on zero hours contracts will be published next year
3. Two questions on the quality of jobs have also been introduced and four other questions are being/have been trialled

c) NOMIS is no longer viable and ONS plan to combine it into the customisemydata tool. Data is already being loaded into customisemydata but is likely to take 12-18 months. This tool does not have the same functionality as NOMIS and there is a risk of losing some historic geographies, as well as the possibility of creating user-defined combinations. An exercise is being undertaken to see what elements of NOMIS are being accessed, what users use it for and how it fits into policy and strategy making.

d) Vacancies data is an area of increasing focus. Some organisations are using the private sector’s Burning Glass but it is expensive. There is an ONS / UK cross-departmental initiative underway – Examine A Place – which is a collaboration with Adzuna to provide a range of information on vacancies. 

e) ONS is working on a new IPAC – Integrated Population and Characteristics Survey – as the potential replacement for the Annual Population Survey and also to incorporate the LFS. For the LFS they are undertaking a major review going back to first principles and they are currently field testing the proposal. The aim is to have around 400,000 respondents pa. There are issues with funding – the DfE decision has created a shortfall – and they are seeking to move this work to a central funding model. The decisions may see the end of the Annual Population Survey. A meeting is to be held in December between ONS and NRS and the Scottish Government to discuss the implications for them. The Scottish Government is to explore the potential for its own datasets and data linkage should the APS not continue to provide the potential to continue to obtain important data, which could include HMRC and DWP data supplemented with an online survey.

Action 2: Scottish Government to produce a list of data accessed from NOMIS and from the LFS/ APS in respect of policy and strategy development and the impact (financial) of not being able to access such data. This to be circulated to councils and other users to provide a more complete picture and forwarded to James Harris at ONS to feed into the LFS Transformation project.

Business demography 2018 publication: Aberdeen VAT office issue – Marina Curran

The Business Demography UK, 2018 publication that was published on the 19th November, describes the number of births (VAT registrations), deaths (VAT deregistrations) and business survival rates. The Businesses in Scotland publication, which was released on the 6th November showed that the number of registered businesses had increased, and therefore it would be expected that the number of business birth should be higher than the number of business deaths. However, the Business Demography publication figures indicated that Scotland was the only region of the UK where the business death rate was higher than the birth rate. Further investigation revealed a very large increase in business deaths in Aberdeen City, which is due to the centralisation of VAT related to foreign online traders and in their dealings with HMRC through the Aberdeen office and being allocated to this office. This explanation and manually adjusted figures for Aberdeen to reflect actual activity were included in the footnotes; these adjusted figures will be the ones used in Scottish Government publications.

This anomaly is not picked up in the Businesses in Scotland figures because the IDBR data used is filtered for employment in Scotland.

Review of ‘The statistical classification of economic activities’ – Marina Curran

Discussions are underway on the review of the NACE - Nomenclature statistique des activités économiques dans la Communauté européenne - classification of industries by ONS and EU statistical offices taskforce. The UK SIC codes follow NACE to the four-digit level. The last update to SIC codes was in 2007, but since then developments have created and/or altered a number industries, such as drones, 3D printers, renewable energy activity and life sciences. The Scottish Government contributed to the ONS response to the Eurostat consultation, confirming that a review was needed. The taskforce is reviewing each sector and by the end of December plans to have finished reviewing Divisions 47 to 56. The intention is to consult on the first draft of the proposals in March 2020 with the new codes to be finalised in 2021.

Action 3: Scottish Government will circulate details for getting in touch so that members can sign-up and give opinions and feedback. Scottish Government will also bring the first draft of the proposals to the group for discussion and feedback.

Productivity model – Sandy Stewart and Orla Kilroy

Work has been progressing on the development of the Scottish Productivity Model. It has involved capturing data from a wide range of sources and has involved some modelling work at a granular level to provide a definitive database of Scotland’s economic history from at least 1946 – though some data is available going further back for industries like coal mining and fishing. Most of the data was in paper form and was not linked.

The approach adopted has been similar to that used in Regional Accounts and has involved the development of a long term model covering 1946 to 1997 and the development of a short term model covering 1998 to 2018 and the creation of a long term diagnostic dashboard tool. The tool can be analysed by industry and for the current 32 council areas.

The work has in effect created a historic set of Scottish National Accounts. Taxes and subsidies are factored in through a separate line.

The model encompasses both economic and labour market statistics, and the granular-level data are modelled to 98 distinct industry groups (consistent with QNAS and IO tables), and 36 distinct geographies (consistent with NUTS 3 and LA areas). The modelled estimates are consistent with published national totals. It covers GVA in nominal and real terms and total employment – employment, HM Forces and the self-employed. It also covers hour worked and wages. Wages information goes back to 1951 but does not have gender or employment type information but has an age breakdown. 

The Regional Data Service holds a lot of data on manufacturing between 1950 and 1995. It relates to around 12,700 local units which employed 10 or more. There is information on sea fishing from the 1990s and from coal mining from the 1800s.

The Scottish Quarterly Accounts contain a lot of information but the information is only available from 1998 onwards and the now no longer produced Scottish Economic Bulletin contains information back to the 1960s.

The dashboard contains real and nominal GVA, implied deflators, employee numbers and real GDP per employee for each of the 32 council areas.

From 1998, the work has been able to use the Scottish National Accounts and this gives figures on total employment – which can be differentiated into gender and full time / part time splits constrained to reflect the overall UK situations. In respect to earnings, self-employment earnings are included in Mixed Income and Gross trading profits are allocated to the compensation of employees element. GVA is made up of Compensation of Employees plus Exports minus Imports plus Gross Operating Profits plus Taxes minus Subsidies. The model produces two productivity measures – real GVA per job filled and real GVA per hours worked.

In terms of the stages of the model:

1. IDBR data was analysed and applied to the GVA estimates to get council level data;
2. The 31 industry GVA data was then analysed and constrained to the Regional Accounts total ;
3. These were then rescaled to be consistent with the quarterly National Accounts for Scotland series and the Scottish Input-Output tables – including the supply use tables;
4. Iterations using multiple RAS are undertaken and tested for convergence with the National Accounts figure;
5. Derived estimates are then produced for productivity, etc.

The end results are breakdowns by each council for 31 industries over 19 years. In terms of issues, there are issues with the changing SIC codes over this period.

Activity is still continuing in relation to:

1) Continuing consultation and the collection of local knowledge including the potential to add:

a) Information from the Census of Production

b) Workforce information

c) Industrial records – in particular mining, coal, steel, textiles

2) Accessing relevant academic research

3) Peer reviewing of the results to date

Action 4: A day will be arranged in February or March, for group members to input into the model detail

AOB and date for the next meeting

May 2020 was suggested for the next meeting

Actions from the SSESG meeting – 22 Nov 2019

Action No	Action	Status	Comment/result
1	ACTION 1: Send specifications in datazone or intermediate geography terms for specific geographic areas of interest for GDP and GVA. A time series for these will be made available back to 1998. Scottish Government will coordinate the response and circulate the list to members before forwarding to Trevor Fenton at ONS.
2	Scottish Government to produce a list of data accessed from NOMIS and from the LFS/ APS in respect of policy and strategy development and the impact (financial) of not being able to access such data. This to be circulated to councils and other users to provide a more complete picture and forwarded to James Harris at ONS to feed into the LFS Transformation project.
3	Scottish Government will circulate details for getting in touch so that members can sign-up and give opinions and feedback. Scottish Government will also bring the first draft of the proposals to the group for discussion and feedback.
4	A day will be arranged in February or March, for group members to input into the model detail