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Scottish Economic Statistics 2002

A1 The Scottish Executive Statistics Programme 2002

Introduction

This paper is the fourth in the series which sets out the planned schedule for the development of the Scottish Executive's Scottish Economic Statistics Programme (SESP). It is a working document in that the outputs and timetable are subject to amendment; however, it represents the current plans as at March 2002. The SESP includes relevant outputs and activities across the whole of the Scottish Executive, as well as in other government departments and, accordingly, represents a complete programme for the development of official economic statistics on Scotland. These are intended to provide insight into a wide range of aspects of the performance of the Scottish economy and to underpin the development of more effective policy in Scotland.

One of the major priorities over the past year has been to liaise with colleagues in other Devolved Administrations and in Whitehall departments and to consider with them where there are opportunities to improve the basic sampling and methodologies used to produce sub-UK economic analysis and indicators. Although any benefit from these developments would not be realised for some years, it is seen as an important investment towards the improved quality, timeliness and range of Scottish economic statistics.

The primary areas of developmental work on economic indicators within the Executive continue to be usefully seen as addressing three distinct elements;

• The macro-performance side: including GDP, input-output, corporate sector, the disaggregation of services, and trade flows;
• The policy side: including innovation, commercialisation, tourism, the enterprise birth-rate, inward investment, IT and education;

The local area economic statistics: the development of 'neighbourhood' statistics and the need for more comprehensive, better quality sub-Scotland indicators of labour market activity and household income levels.

The previous SESP identified the key areas for future development required in order to make progress in each of these 3 primary areas, and as the relevant work takes several years of investment, these remain:

• Preparation for the introduction of chain-linked GDP, which will improve the sensitivity of the Scottish GDP index to change in the composition of the Scottish economy.
• Continued development of statistics on Innovation and the Knowledge and New Economy.
• Improvements in the quality of indicators to allow the monitoring of income-related Social Justice targets in consultation with DWP.
• The development of Neighbourhood statistics, which will improve the quantity and quality of statistical information on labour markets and household income available at sub-Scotland levels.

Other areas of work that will become priority areas for 2002/03 include:

• Full cost benefit analysis of the case for boosting the Labour Force Survey for Scotland.
• Review of the existing Scottish exports statistics.
• Feasibility study for the production of a GNI estimate for Scotland.
• Development of tourism statistics.
• Driving forward the priority of sub-National economic statistics within the National Statistics agenda.

As in previous years, the SESP details progress against the previous year's plans, and lays out the proposed, continuing and new development work for the coming year. Comments are invited on any aspect of this from readers and users of the statistics. The new SCOTSTAT website provides information on how comments can be submitted electronically. Alternatively, please phone or write to the address/number provided at the back of this publication, in the usual way.

Neighbourhood statistics

The funds for work on Neighbourhood statistics became available from April 2001. A steering group was set up to involve external advice on priority areas for development, and internal projects have been initiated to concentrate on developing small area estimates for a range of statistical indicators in specific subject areas. The rural classification is one of the key geographic indicators being considered. The individual subject areas will agree a programme of developmental work for the next 2 years. This will include classification work, methodologies, boosting samples, IT facilities and dissemination. Close liaison will take place between SE and ONS to ensure maximum co-operation and compatibility across the 2 initiatives, and the Scottish Executive will work in partnership with Local Authorities and other organisations in order to maximise the use of existing small area data in this work.

Chart A1.1: Estimated GVA component of total Scottish manufactured exports, 1995-2001Q3

Economy

Summary of main outputs

• Gross Domestic Product (including Index of Production)
• Manufactured Exports
• Input-Output Tables
• Regional Accounts

New outputs and developmental work

• GDP estimates are published at a more disaggregated sectoral level for the first time in this publication (see table 1.2)
• Development of advance estimates of GDP under consideration
• Index of output of Knowledge Industries under consideration
• Scottish quarterly non-manufactured exports indicator under consideration
• Environmental Accounts for Scotland under consideration
• A one-off research project will be conducted in 2002 to disaggregated household consumption and income within the I-O tables

Progress against the SESP 2001 Plans

• Gross National Income. The possibility of reproducing the methodology used by the UK to calculate a Scottish GNI was investigated. This involved checking on the availability of data on investment flows between Scotland and the rest of the UK. Since the currently run surveys are at a UK level, letters have been sent to survey respondents in order to clarify whether data are readily available on intra-UK investment flows. Once this position has been clarified, a clearer decision on the way forward can be taken.
• Gross Domestic Product (including Index of Production). Quarterly GDP estimates for Scotland were produced in each quarter to timetable. Improved methodologies and data sources were identified and introduced for the Estate Agents, Banks, Building Societies, Air Transport, Central Government and Other Services sectors. Changes to the methodology used for the Production sector remain on hold. Work on preparing for the introduction of chain-linked GDP estimates began in 2001.
• Scottish Manufacturing Exports. This was published each quarter to timetable. The publication schedule was moved forward by a week from January 2001. Development of seasonal adjustment and other smoothing procedures was completed and seasonally adjusted estimates were published from July 2001 onward.
• Index of Construction. Progress on the planned review of the methodology and data sources used to produce the Index of Construction and accompanying construction tables was delayed in 2001. To date changes have not been implemented. This work will be carried forward into 2002.
• Input-Output Tables. The 1998 Input-Output (I-O) Tables and Multipliers were published in June 2001. The tables were the first to be presented in line with the European System of Accounts 1995(ESA95) and incorporated all planned data developments. In addition to the standard tables the Type II Leontief and multipliers were presented along with completely revised publication text. The tables were placed on the Internet for the first time (www.scotland.gov.uk/stats/docs/io98.pdf ). ESA95 adjustments were also made to the 1995 and 1996 tables. Investigation into the feasibility of producing Constant Price Input-Output Tables for Scotland was deferred until completion of UK development work on this area.
• Environmental Accounts. A seminar was held by the Scottish Executive in October 2001, to raise awareness and stimulate interest in the development of Environmental Accounts in Scotland, and to identify those who might be willing to help in their development (both analysts and customers). A working group has been set up to take forward the work.
• Regional Accounts. The income measure of gross domestic product - GDP(I) - is compiled by the ONS. The 1999 results were presented for Scotland in February 2001 and 1998 results for local areas were published in April 2001. The estimates of GDP for 2000 have been delayed due to technical problems but should be available in the next 6 months. Details of household income and expenditure for 1999 were published in July 2001.

Developments in data collection and quality

• Gross Domestic Product (including Index of Production). Ongoing data monitoring will continue with particular focus on the public sector. Work on preparing for the introduction of chain-linking will continue throughout 2002. Scottish Executive Statisticians will continue to liaise with ONS counterparts.
• Scottish Manufactured Exports. The timetable will be brought forward by another week in the first half of the year. Comparisons with other sources of Scottish exports data will be carried out.
• Input-Output Tables. As part of the ongoing development of the tables, reviews of the methodology and data sources will take place for agriculture, forestry, fishing and exports. Improved data and methods will also be used in the analysis of distribution margins, inventories and gross fixed capital formation. In addition, a survey of service sector trade flows will be conducted in 2002. The technology assumptions used to derive the symmetric tables will be reassessed as part of a joint review with ONS. Work will continue to provide reliable and timely estimates of GVA from the I-O tables to meet the demands of the GDP chain-linking project.
• The review of the Index of Construction and the Scottish Construction Tables will continue in 2002. Increased resources will be invested in this exercise.
• Environmental Accounts. Over the next year, the Working Group will look into the development of Environmental Accounts for Scotland. They will seek to identify the key areas of policy required by all interested parties that environmental accounts should address, and develop and implement a strategy for prioritising and meeting these needs while minimising, where possible, the burden on data suppliers and maintaining quality fit for purpose.
• Regional Accounts: A quality review is being undertaken by ONS, SE are actively involved in the Review Board. Additional UK outputs presently being developed on a regional basis by ONS are Gross Fixed Capital Formation, Household Accounts and Government Accounts.

Developments in geographic data including neighbourhood statistics

Gross Domestic Product (including Index of Production). Exploratory investigation of sub-national GDP indices will commence in 2002.

Main Contacts

GDP, Manufactured Exports, Regional Accounts: Hugh McAloon - 0141 242 5497

Input-Output, Impact Analysis:
Lynn Graham - 0141 242 5459

Gross National Income, Environmental Accounts, Scottish Economic Statistics:
Maria Melling - 0131 244 3003

Chart A1.2: Employment by sector and size of enterprise , 2000

Business, Industry and Commerce (including tourism)

Summary of main outputs

• The Production, Services and Construction Sectors Databases
• Corporate Sector - analysis of structure and trends in Scotland
• Innovation and the Knowledge Economy.

New outputs and developmental work

• Innovation and the Knowledge Economy. Publication of the Knowledge Based Industries Index as part of the GDP publication will be considered further
  in 2002.

Progress against the SESP 2001 Plans

• Innovation and the Knowledge Economy. The results of the Scottish Executive Survey on Commercialisation of Intellectual Property in the Scottish Higher Education Sector were published in September 2001. Work continued in 2001 on the development of a Knowledge Based Industries Index to measure growth in the Scottish knowledge economy with a view to publishing data as part of the GDP estimates.
• Corporate Sector. The results of the 2000 Scottish Corporate Sector Analyses are presented in this publication, along with a longitudinal analysis that looks at the changes in the structure of the corporate sector since 1997. More detailed tables and analyses will be published on the Scottish Executive website.
• The Production, Services and Construction Sectors. In order to meet the timetable for chain-linking, the timetable for producing the Scottish Production Database (SPD), Scottish Services Database (SSD) and Scottish Construction Database (SCD) from the raw ABI data is to be brought forward. ABI data for Scotland for 1999 were received in July 2001. Although this was slightly later than hoped, nevertheless the SPD, SSD and SCD were available for input-output analysis by autumn 2001 as planned, and were published in January 2002. The main vehicle for publishing these data is the Scottish Executive website. SPD data are available at http://www.scotland.gov.uk/stats/spd . SSD data are available at http://www.scotland.gov.uk/stats/ssd . In 2001, the SCD formally became part of National Statistics, following work to establish that the database was of sufficient quality.
• Tourism. Scottish Executive statisticians have carried out further investigations into the source data that underpins the currently available tourism data.

Developments in data collection and quality

• The Production, Services and Construction Databases. It is planned to continue to bring the timetable for production of the SPD, SSD and SCD forward, to meet the needs of the chain-linking timetable. Raw ABI data are due to be received from ONS in April 2002. If this delivery date is realised, the SPD, SSD and SCD should be ready by late summer 2002 for publication in autumn 2002. A pilot survey of large firms in Scotland was conducted in 2001. The aims of the study were to find out whether large, multi-site firms are able to provide data at individual site level, if they are not able to do so, why not and where they are able to provide site level data, how these compare with the current estimates used. Analysis of the results of this study will take place in early 2002, with any follow-up carried out later in 2002. During 2002, it is planned to try to increase the use made of the SPD, SSD and SCD databases, particularly in policy making.
• Innovation and the Knowledge Economy. Work on drawing together and developing useful information on innovation and the knowledge economy will continue. Liaison with ONS and other organisations with a useful input is likely be stepped up over coming months. There is more information on this in the text box in chapter 2 of this publication.
• Tourism. A Tourism working group will be established to consider developing the range of information available on tourism within the Scottish Executive.

Developments in geographic data including neighbourhood statistics

• The Production, Services and Construction Databases. Work is underway to further develop sub-National estimates of the key variables including GVA, employment, Capital expenditure, and Purchases as part of the Neighbourhood Statistics initiative.

Main Contacts

Production, services and construction databases: Fiona Roberts - 0141 242 5620
Corporate sector, knowledge economy, tourism: Gerhard Mors - 0141 242 5488

Chart A1.3: Economic inactivity rates in Scotland, 1992-2001

Labour Market

Summary of main outputs

• New Deal Statistics
• Local Area Profiles
• Skills Statistics.
• Labour Market Forecasts
• Earnings data

New outputs and developmental work

• Longitudinal Analysis of Labour Force Survey. Standard analysis developed and results will be published in Scottish Economic Statistics.
• Skills Statistics. Assess the feasibility and value of a skills survey.

Progress against the SESP 2001 Plans

• Ward Level Unemployment Rates. Unemployment rates based on claimant counts were produced for 1991 wards and were included in the Local Areas Profiles that are published monthly on the Scottish Executive website.
• Local Area Profiles. Monthly update of the labour market information relating to Scottish Local Authorities was made available on the Scottish Executive web-site on the release of the ONS's labour market statistics.
• Improved Economic Activity Time Series. Information is now available on economic activity in Scotland from 1986 to 2000, which is the most recent information available.
• New Deal Statistics. Monthly news releases on New Deal statistics reporting on the performance of the New Deal programmes are now being produced. In addition, a New Deal Intelligence Report is published quarterly which gives more detailed information on performance and includes different theme reports each quarter. The topics already covered in the reports include economically active lone parents, labour market activity of offenders, rural/non-rural delivery, rural/non-rural performance and social justice milestones.
• Consultations. The Scottish Executive participated in a range on consultations with ONS that included reviewing the quality of the Annual Business Inquiry and establishing a Local Labour Market Strategy.
• Skills. A review of research into information available on skills has identified areas where there are gaps in information on skills and key lessons from experience in England and Wales that are applicable to Scotland

Developments in data collection and quality

• Links between the Labour Force Survey and other Survey data. Findings on possible options for combining the results of LFS and Scottish Household Survey and an assessment of the feasibility of using this joint data set will be reported. Also, the possibility of linking the Inter Departmental Business Register with LFS or other labour market information will be investigated.
• Labour Force Survey Boost. The Scottish Executive will investigate the relative costs and benefits of boosting the Labour Force Survey for Scotland and will assess how the local labour force surveys are progressing for England and Wales and establish the most appropriate methodology for Scotland.
• Small Area Estimates. Local area labour market information will be improved by modelling benefits data from the Department for Work and Pensions and local population estimates to obtain better local area estimates for economically active and economically inactive people.
• Longitudinal Analysis. The labour force survey tracks people over five quarters and it is therefore possible to track people's labour market situation. A standard analysis will be developed with consideration being given to publishing results in Scottish Economic Statistics.
• Skills. Technical advice will be given to Future Skills Scotland (FSS) on the feasibility and value for money of a skills survey, similar to those already undertaken in England and Wales. The survey would assist FSS in addressing the gaps in information on skills that have already been identified.
• Labour Market Forecasts. Similarly, advice will be given to FSS on the range of labour market forecasts that are produced for Scotland as a whole and for areas within Scotland. FSS will assess the potential for using the forecasts to provide information on future skills issues and the matching of the demand and supply sides of the Scottish labour market.
• New Deal Statistics. Monthly news releases on New Deal statistics will continue to be produced and quarterly New Deal Intelligence Reports that focus on the performance of New Deal programme and cover specific topics as agreed with Employment and Welfare to Work Division will be published.

Developments in geographic data including neighbourhood statistics

• Small Area Estimates. Local area labour market information will be improved by modelling benefits data from the Department of Work and Pensions and local population estimates to obtain better local area estimates for economically active and economically inactive people.

Main Contact

Elaine Drennan - 0141 242 5461

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