Office for National Statistics: Annual Report 1998-1999

WO R K I N G TO I M P R OV E E V E RYO N E ’ S L I V E S

ANNUAL REPORT & ACCOUNTS 19 9 8 – 9 9

WO R K I N G TO I M P R OV E E V E RYO N E ’ S L I V E S

A N N U A L R E P O R T & A C C O U N T S 19 9 8 – 9 9 AIM

O U R A I M I S F O R O N S TO B E A P ROV I D E R O F WO R L D C L A S S S TAT I S T I C A L A N D R E G I S T R AT I O N S E RV I C E S .

OBJECTIVES

W I T H T H E AG R E E M E N T O F T H E C H A N C E L L O R O F T H E E X C H E Q U E R , O N S S E T I T S E L F T H E F O L L OW I N G O B J E C T I V E S F O R 1 9 9 8 – 9 9 :

› To provide a trusted and authoritative statistical service, in accordance with UK, EU and international requirements, to improve decision making, stimulate research and inform debate within government and the wider community; and

› To ensure the registration of key life events in order to protect and help individuals.

Presented to Parliament in pursuance of Section 5 of the Exchequer and Audit Departments Act 1921 Ordered by the House of Commons to be printed 27 July 1999

7 31

THE STATIONERY OFFICE £12.55

The Office for National Statistics (ONS) is working to improve everyone’s lives, from the very young to the very old. Daniel Harris (front) and Evelyn Whitworth (page 26 and back), like all the people featured in this publication, are real people dealing with real issues. Directly or indirectly, their lives are affected by the work we do.

F RO N T C OV E R

Daniel Harris is five and has leukaemia. He is a patient on Piam Brown Ward at Southampton General Hospital. Doctors and hospitals supply details of all cancer registrations to regional cancer registries which then pass these to ONS to be processed for the Department of Health.These statistics help to monitor the incidence of cancer and cancer survival trends.

ONS also maintains the NHS Central Register – a key database of all patients registered with a GP in England and Wales.

AC K N OW L E D G E M E N T S

ONS and Celsius would like to thank the following for their help and participation in the photography used in this report: Daniel Harris, Dr Jan Kohler, Consultant at Southampton General Hospital, and Daniel’s mother, Debbie Harris; Deborah Short, Melanie Cook, Mr Brogan and the pupils of Shirley Junior School; Alex, Simon and George; Richard, Roswitcha,Tristan and Tamsin Gadd and Barbara Davis; Amanda, Stuart, Isaac and David Thom and Annette Becker; Darra Singh, Mary Scanlan and Chris Birchall of Hexagon Housing Association and Jon Broome of Architype architects; Lorraine Streater, Damian Braganza, Bose Akomolafe, Beverley Botting and Lois Cook of ONS; Ernest Peck; Gill and Evelyn Whitworth and Oliver Rau. © Crown copyright 1999 ISBN 0-10-276499-9 O F F I C E F O R N AT I O N A L S TAT I S T I C S

1 Drummond Gate London SW1V 2QQ National Statistics Public Enquiry Service T:

01633 812973 (From 31 August 1999: 020 7533 5888)

E– MAIL:

info@ons.gov.uk

WEB:

www.ons.gov.uk

DESIGN: P H O T O G R A P H Y: PRINTER: PA P E R :

celsius| Alan Hunter Signal Press, London In line with ONS’s Green Policy, this report is printed on environmentally friendly paper.

CONTENTS 5

D I R E C TO R ’ S R E V I E W

7

A B O U T T H E O F F I C E F O R N AT I O N A L S TAT I S T I C S

9

A B O U T T H I S R E P O RT

11

S TAT I S T I C A L AC T I V I T I E S

16

R E G I S T R AT I O N AC T I V I T I E S

19

O F F I C E – W I D E AC T I V I T I E S

22

THE FUTURE

24

A N N E X A – P E R F O R M A N C E AG A I N S T TA R G E T S 19 9 8 – 9 9

27

A N N E X B – R E C RU I T M E N T 19 9 8 – 9 9

27

A N N E X C – AV E R AG E E A R N I N G S I N D E X

28

A N N E X D – O N S P U B L I S H I N G A P R I L 19 9 8 – M A R C H 1 9 9 9

31

AC C O U N T S 19 9 8 – 9 9

Alex, Simon and George are all 15 years old; they live in London and meet up most afternoons after school to go skateboarding and rollerblading. ONS provides a variety of information on teenagers and young adults, often through government surveys that cover issues such as the economic activity and level of earnings of young adults; the development and well-being of adolescents; their dietary habits and nutritional status; smoking and drinking habits; and their participation in sport and other physical activities.

DIRECTOR’S REVIEW This report covers the third year of the Office’s existence.

As usual, we began the year with a challenging programme of on-going work and developments designed to meet high priority demands from our users. We have made good progress and performed well against our corporate targets.

We have achieved much during the year and this report reflects this. Many of our statistical outputs form part of regular statistical series and are produced month on month, year on year. Improving the quality of service is a constant challenge for staff throughout the office. Even maintaining existing quality is a major task, as systems have to be adapted to monitor a rapidly changing society.This on-going work should not be forgotten in the eagerness to celebrate the new. It forms the core of the 300 First and Press Releases, all of them issued on their pre-announced publication date, and the 421 publications published this year.

There were also successful developments in 1998–99:

› The year began with the launch of a wide-ranging debate on the future governance arrangements for National Statistics. Discussions have continued throughout the year.

› The 1998 annual National Accounts were published in September. This was the most far-reaching revision to the National Accounts since they were set up in the 1950s. The UK was the first country in the EU to convert to ESA 95 with a full set of back series.

› The new look Labour Market Trends provided a more user-friendly approach to the increasingly complex labour market by improving presentation of both national and regional labour market statistics involving better integration of data from different sources.

› Proposals for the census, including plans for a number of new questions were published in a White Paper in March. For the first time, this census will be processed with the help of private sector expertise to produce and scan over 30 million census forms. In February, along with my fellow Registrars General from Scotland and Northern Ireland, I signed the contract with a consortium headed by Lockheed Martin.

› A fundamental review of the civil registration service in England and Wales was launched in December. The aim is to provide the basis for a service which can adapt to the ever-changing needs and attitudes of a modern society and which can adopt modern methods and technology to meet them.

› We have contributed to cross government work, in particular on supporting families, social exclusion, modernising Government and combating fraud.

Despite these significant achievements we can only consider 1998–99 as a partial success.

The decision in autumn 1998 to suspend the Average Earnings Index (AEI) brought our methods and processes under close external scrutiny.The report and recommendations of the Turnbull/King Review were published on 1 March. More details are given in Annex C on page 27.

We have also come under the spotlight from other sources. As a result of the Government’s Comprehensive Spending Review a high level review was undertaken by external consultants to help identify scope for efficiency savings for future reinvestment in improved outputs.The Economic Secretary accepted the recommendations made by the review’s Steering Group in February 1999. As part of its regular programme, the Treasury Select Committee also reported on ONS at the end of 1998.

The combined effect of the recommendations from the AEI Report and these major reviews means we face radical change for 1999–2000 and beyond.The ONS Policy Board is committed to delivering on the recommendations.The challenges and our plans for

5

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

Deborah Short is four months pregnant with her second child. She is Head of Year at Shirley Junior School in Southampton. When born, Deborah’s baby will be registered by the local Registration Service and the details sent to the General Register Office (part of ONS). This information will then be used by ONS to calculate birth rates and provide population estimates and projections.

ONS is also active in monitoring women’s fertility; the age of women when they have their first child; and congenital anomalies detected at and after birth.

dealing with them are described in more detail in our 1999–2002 Business Plan. As we release efficiency savings, we shall plough them back to improve the quality and range of our outputs.

We are facing a period of significant change and inevitably this means a period of uncertainty for staff. However, the commitment to our work from staff at all levels within ONS is a tribute to them. Even through periods of uncertainty and change, regular outputs and developments continue to be maintained.

Our priorities for the future are unchanged: we will continue to provide world class statistics and registration services. Our challenge is to recognise the opportunities presented to us by the period of change we face.

Tim Holt Director T H E T H R E E RO L E S O F T I M H O LT

Director, ONS Directly accountable to the Chancellor of the Exchequer for the operation and performance of the Office in accordance with the Framework Document and its approved plans.

Registrar General for England and Wales (RG) Responsible for the administration of the marriage laws and to secure the provision of an effective system for the registration of vital events, ie births, marriages and deaths. This is a statutory office, to which he is appointed by Letters Patent.

Head of the Government Statistical Service (GSS) Responsible for promoting the provision across government of co-ordinated, high-quality, cost effective and easily accessible statistics.

A B O U T T H E O F F I C E F O R N AT I O N A L S TAT I S T I C S ( O N S ) The Office for National Statistics was created on 1 April 1996 as an Executive Agency and a government department, accountable to the Chancellor of the Exchequer.The Office has about 3,000 staff operating in London, Newport (South Wales), Runcorn, Southport and Titchfield (Hampshire), plus around 1,000 interviewers working on social surveys countrywide.

ONS is an equal opportunity employer and is committed to a policy of nondiscrimination for both its employees and potential recruits. In January 1999 the Director signed up to the Commission for Racial Equality’s Leadership Challenge, committing him to give a personal lead in promoting the principle of racial equality and taking practical action.

Systems are in place to ensure that recruitment is carried out on the basis of fair and open competition. Our report on recruitment is in Annex B on page 27.

Our international reputation has grown rapidly in the first three years of the Office.

During the last year ONS played host to around 50 groups of overseas visitors who came to learn from our experiences and to share theirs. In addition we hosted an international seminar on census methodology, the 50th anniversary meeting of the International Association for Research in Income and Wealth (IARIW) and the Paris Group on Labour and Compensation.

Preparations were underway for the Heads of the World Health Organisation Collaborating Centres for the Classification of Diseases which will take place in October this year.

7

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

Richard

and

Roswitcha

Gadd,

and

their

children,

Tristan and Tamsin, are about to move into their new home, a larger flat with a garden, close to where they are currently living. ONS processes economic data to help make which

in

addition, changes

in

turn it

decisions

affect

mortgage

conducts

household

on

interest

rates,

repayments.

surveys

which

composition,

and

In

monitor collects

household expenditure data on housing, goods and services. Every ten years ONS also carries out the Census in England and Wales, the next of which will take place in 2001. The Census covers the entire population and

provides

information

on

family sizes and the type of housing they occupy.

ABOUT THIS REPORT Reliable statistics are necessary for good public management and accountability. One role of our outputs is to provide the information to allow the performance of government to be monitored. It is also important that we demonstrate that the statistics and registration services we provide are produced efficiently.This third Annual Report and Accounts allows Parliament and all users of our services to monitor our performance.

The following goals, established when ONS was set up, form a core of the ONS Vision and Values and remain relevant to our business strategy : A:

TO I M P ROV E T H E Q UA L I T Y, R E L E VA N C E A N D AC C E S S I B I L I T Y O F O U R S E RV I C E S TO A L L C U S TO M E R S ;

B:

TO I M P ROV E P U B L I C C O N F I D E N C E I N T H E I N T E G R I T Y O F O U R O U T P U T S ;

C:

TO M I N I M I S E T H E BU R D E N O N T H O S E S U P P LY I N G I N F O R M AT I O N , S U B J E C T TO THE NEEDS OF GOVERNMENT AND SOCIETY FOR HIGH QUALITY INFORMATION;

D:

TO I M P ROV E VA L U E F O R M O N E Y A N D O P E R AT E E F F I C I E N T LY A N D E F F E C T I V E LY; A N D

E:

TO M A I N TA I N A N D D E V E L O P A W E L L - M OT I VAT E D WO R K F O R C E .

Our annual targets, agreed with the Chancellor of the Exchequer, are designed around these goals.

1998–99 was overshadowed by the problems with the AEI and this is reflected in our major government customers’ assessment of our performance. However overall they were satisfied that our performance had generally met the target. Our performance against the other targets was good and in the case of the compliance plan and efficiency savings both targets were exceeded. In a few cases we missed the target marginally. Performance against all the targets is reported in Annex A on page 24.

1998–99 was a busy year on both the statistical and registration fronts. Despite a considerable agenda of change and development, the staff at ONS ensured that the regular outputs, on which our customers rely, were produced on time.

Our performance towards achieving our objectives is considered in the next section.

Goals A–C are considered separately for our statistical and registration services. Improving value for money and maintaining a well-motivated workforce (goals D and E) are reported across the office.

9

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

Amanda

Thom

and

three

of

her

six

children

(Stuart, Isaac and David) unpack their weekly shop. ONS undertakes the Family Expenditure Survey

and

maintains

the

Retail

Prices

Index (RPI) – an important barometer of the UK economy which measures the impact of inflation on family budgets. Another ONS service is the Retail Sales Index (RSI), which monitors the spending patterns of the population.

S TAT I S T I C A L A C T I V I T I E S GOAL

TO I M P ROV E T H E Q UA L I T Y, R E L E VA N C E A N D AC C E S S I B I L I T Y O F O U R S E RV I C E S TO A L L C U S TO M E R S ( A )

Improving the quality of service is a constant challenge for staff throughout the office. Even maintaining existing quality is a major task, as systems have to be adapted to monitor a rapidly changing society.The introduction of the euro and the growth in Internet trading are just two examples of how the economy is changing.

Much of our work involves the regular collection, analysis and production of statistical information at monthly, quarterly and annual intervals.The majority of the 300 First Releases and Press Releases and 421 publications issued during the year relate to our statistical outputs. A lot of effort goes into producing what may, on the face of it, seem routine outputs. However, we are constantly looking for ways to improve the thousands of series that underlie the headline figures – for example the Retail Prices Index (RPI) and the Gross Domestic Product (GDP) – and many of these improvements are not immediately obvious to our customers.The migration of national accounts systems, from spreadsheets onto the new Windows based version of the Central Shared Database (CSDB) is one such example. It brings the benefits of improved efficiency, consistent approaches, improved quality and reduced training costs, nearly all of which will be invisible to our customers.

New products and services Each year ONS publishes approximately 400 titles. In 1998–99 the large majority of ONS publications were published according to the pre-announced timetable (see Annex A for detailed performance). New additions to the ONS publications portfolio this year included: Stockbuilding, UK Trade in Services, Health Statistics Quarterly, Sub-national Population Projections – England, Social Focus on Women and Men and Tracking People: A Guide to Longitudinal Social Sources.

The full range of ONS publications is shown in Annex D on page 28.

Despite much improvement 1998 is likely to be remembered for the decision to suspend the AEI.This occurred after major shortcomings were found in a revised series introduced in 1998. More details on the AEI suspension and subsequent review are given in Annex C on page 27.

On the positive side a number of improvements were made in the year.The major projects are outlined below in the main statistical themes.

C O M M E R C E , E N E R G Y A N D BU S I N E S S

ONS has worked closely with users to understand their requirements and considerable planning has gone into the development of a package of improvements to enhance a range of business and economic statistics.

A new single whole economy Annual Business Inquiry replaces eight previous annual structural inquiries improving coherence between data from the different sectors of the economy. A new Trade in Services publication was introduced meeting the needs of the Department of Trade and Industry (DTI) and the Treasury but has also proved a valuable source to a much wider range of users. A prototype corporate services price index was published in 1998, placing ONS among the leading group of nations in the development of service sector price indices.

All business and macro-economic indicators were rebased in 1998 so that they now more closely reflect the changed industrial structure.

11

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

THE ECONOMY

The publication of the Blue and Pink Books in September 1998 saw the culmination of several years of planning for the introduction of the National Accounts on the European System of Accounts (ESA 95).This was the most far-reaching revision to the National Accounts since they were set up in the 1950s. It involved the Blue Book, Pink Book, InputOutput tables, Concepts Sources and Methods, Introducing ESA and Sector Classification Guide, all of which were produced to deadline, together with the First Releases, background briefing and an electronic dataset. Nearly 2,000 copies of the Blue Book were sold.The UK was the first EU Member State to publish accounts on the ESA 95 basis with a complete back series.

In addition to taking on the ESA 95 changes, the estimates published in the 1998 Blue Book were rebased onto 1995 and included the full effects of the new business register.

The new standards are designed to give the accounts a clearer and more up-to-date framework to allow international comparisons. A series of explanatory publications and seminars explaining the changes for major users of these economic data preceded the publication.This educative programme resulted in a positive response from users.

Improvements continue to be made despite the changes to the Blue Book being the most comprehensive since the National Accounts were started. During work on BB98 it became clear that other substantive revisions would be needed to the accounts soon; in part to take account of feedback from users (especially Eurostat) on the methodologies and presentation used.

In February 1999 we published the RPI Technical Manual, a complete explanation of methodology used in compiling the widely used but not always fully understood Retail Prices Index. Subjects covered in the manual include price collection, validation and sampling procedures, and special indices.

H E A LT H A N D C A R E

Customer involvement is an important element of ensuring we provide the best possible service. A new user group, the Public Health Statistics Advisory Committee, met for the first time in May 1998. It includes members from other government departments, the NHS and academic institutions and will advise ONS on the direction of our statistical work in public health.This new committee joins the network of such groups covering our activities in business statistics, national accounts, financial statistics, gender statistics and registration services.

Extending the use of existing data is an important aspect of our work. In February 1999 we published an easy to use guide on longitudinal data aimed at encouraging better use of existing data sources, and directing potential users to sources that are available for analysis.

In May 1998 we published the results of a study, Health of the Elderly: a General Household Survey (GHS) follow-up for the Department of Health, primarily designed to investigate the feasibility of collecting longitudinal data from which healthy active life expectancy (the expected number of years of disability-free life) could be estimated.

LABOUR MARKET

Following extensive consultation the presentation of monthly labour market statistics was extensively enhanced in the April 1998 First Release.This was mirrored in a new format for Labour Market Trends in the May 1998 edition. After six months the release was reviewed, again through customer consultation, and some further improvements agreed.

To coincide with the launch of Labour Market Trends Quarterly Supplement the publication of the full Labour Force Survey quarterly databases was brought forward by two months.

To provide a more rounded and informative picture of the labour market we have also produced a range of pilot small area estimates which we are currently validating and assessing with customers.

12

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

P O P U L AT I O N A N D M I G R AT I O N

Mid-year population estimates by age and sex for England and Wales at the national and sub-national level were produced for the reorganised local authority boundaries.

We can now better meet the needs of customers for our international migration estimates through the introduction of a new computer system.The new system allows greater flexibility for delivering customer specified outputs.

S O C I A L A N D W E L FA R E

In partnership with the Equal Opportunities Commission (EOC) we published Social Focus on Women and Men in October 1998. Social Focus on Women and Men is the second collaboration with the EOC.The partnership with EOC gives the opportunity to improve coverage, quality and accessibility of gender disaggregated statistics by pooling our experience and expertise.

In another collaborative venture, ONS and the Economic and Social Research Council (ESRC) published the new government social classification. It is designed to replace the two current classifications based on social class and socio-economic groups in 2001. All official government statistics are expected to use the new classification once it is fully implemented and it is likely that others outside government will also choose to use it as it becomes established.The new classification is based on employment conditions and relationships, which are now considered to be central to describing the socio-economic structure of modern societies.The use of a single occupation-based social classification will contribute to the government’s determination to use joined-up government to tackle social issues by helping to explain variations in health and social behaviour and attitudes in society in a coherent way.

Through the year our work has also been integral to a number of cross-departmental initiatives. One way in which we help is through the analyses and reports based on the over 30-year-old Longitudinal Study (LS). With a sample size of 600,000 drawn from the total population, its coverage and scope provides a unique dataset. In the past year the findings from the LS have fed into major reviews of adult health and health inequalities, and into the formation and development of policy in areas such as social exclusion, the elderly and the family.The decision of the LS Review to update it with data from the 2001 Census, is expected to increase greatly its value for developing policies in the next millennium.

H O U S E H O L D S U RV E YS

ONS is also a foremost supplier of quality survey research and advice on survey methods to government and the public sector. In 1998–99 we carried out nine large continuous surveys and over 25 ad hoc surveys.The General Field Force interviewers dealt with a greater volume of units for interview during 1998–99: over 150,000 – an increase of 28 per cent on the previous year.These included elements of: survey design; sampling; data collection; processing; analysis; and interpretative commentary.The main outputs of our social survey work are survey datasets and published interpretative reports. In addition, we carried out methodological research and provided expert advice and guidance across the ONS and other government departments, and to the wider research community.

AC C E S S I B I L I T Y TO A L L C U S TO M E R S

Accessibility is a cornerstone of ONS’s business strategy and more of our customers are seeking information from non-paper sources. Many of our publications are also available in CD-ROM format and electronic dissemination is becoming an important medium for our outputs.The new ONS website design went live on 27 April 1998. It provides background material and briefing papers that will interest professional statisticians as well as more general information.The ONS website links to the Government Statistical Service (GSS)

13

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

Lorraine Streater, Damian Braganza, Bose Akomolafe and Beverley Botting between them have worked for ONS for a total of 69 years. ONS holds a vast amount of employment information. Nearly all the information comes from sample surveys like the Labour Force Survey and other sources such as monthly records of the number of unemployed benefit claimants. The Labour Force Survey tracks topics such as employment, unemployment, job-related training and jobsearch methods, and patterns in equal opportunities in the workplace. The Annual Employment Survey and the New Earnings Survey collect details of jobs and earnings from employers each year.

website, which is a focal point for access to official UK statistics.The launch of StatBase, the home for the statistical data, on the Internet on 1 October 1998 drew the headline ‘A must for any researcher or actuary’ in the Mail on Sunday. Since its launch approximately 3,500 users have been visiting the StatBase site each week.

National Statistics Information and Library Services (NSILS) provides access to the full range of statistics for visitors to our Newport and London sites. Members of the public are welcome to use the library facilities for their research. We also make datasets available to the Data Archive at the University of Essex for further analysis as well as providing access electronically to our data through private providers such as NOMIS. GOAL

TO I M P ROV E P U B L I C C O N F I D E N C E I N T H E I N T E G R I T Y O F O U R O U T P U T S ( B )

T H E F U T U R E O F O F F I C I A L S TAT I S T I C S

The consultation on the Green Paper, Statistics – A Matter of Trust, ended in May 1998.

The public consultation opened up a wide-ranging debate on how best to set the framework to deliver official statistics which are trustworthy and seen to be so.

A Government response to the Green Paper has been delayed awaiting the outcomes of the ONS Efficiency Review and the reports on the AEI and the Treasury Select Committee’s First Report, Session 1998–99, Office for National Statistics. A White Paper is expected shortly.

Previous criticism of the labour market statistics had an adverse effect on official statistics generally.The revised booklets, How exactly is Unemployment Measured?, and a new one, How exactly is Employment Measured?, were produced this year, together with a new User Guide to Labour Market Statistics Releases, to help users better understand how the figures are compiled.

Although the AEI suspension has understandably knocked public confidence it is reassuring that the bulk of our statistical outputs are accepted as authoritative.

GOAL

TO M I N I M I S E T H E BU R D E N O N T H O S E S U P P LY I N G I N F O R M AT I O N , S U B J E C T TO T H E N E E D S O F G OV E R N M E N T A N D S O C I E T Y F O R H I G H Q UA L I T Y I N F O R M AT I O N ( C )

ONS has a responsibility to ensure that the burdens we place on business respondents to all government surveys are kept to a minimum, subject to the needs of government and society for high quality information. Compliance planning is an integral part of ONS’s business planning process. In 1998–99 compliance costs were estimated at £20.5 million against a target of £20.7 million.Through improved sampling methods we have been able to reduce the number of companies required to participate in statutory surveys. In the second year of the introduction of the Osmotherley guarantee for small businesses (firms employing less than 10 people included in surveys only once every four years), the guarantee was breached in only 119 cases, where it was vital for statistical purposes.

Data supply to the population estimates has also been made easier for suppliers.

Flexible input methods have been developed for a number of systems which allow data take on in a form that is the most convenient for the supplier.Through closer contact with suppliers we have helped to eliminate problems before they arise in live data transfer. We are also increasing our take on and exchange of data in electronic format.

As a result of a sample optimisation project carried out for us by Southampton University we have been able to implement a more efficient International Passenger Survey (IPS) design. We have also improved the survey design on the Vehicle Occupancy Survey which has made it more cost effective.

15

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

R E G I S T R AT I O N A C T I V I T I E S The General Register Office’s main outputs are:

› advice and guidance to the public, registrars, local authorities, ministers, MPs and government officials;

› an archive of all births, marriages and deaths in England and Wales since 1837 and certain births, marriages and deaths abroad;

› certified copies (certificates) of birth, stillbirth, adoption, marriage and death register entries (vital events);

› the Adopted Children’s register and Adoptions Contact Registers; and › the Family Records Centre (providing a public search facility for indexes of vital events).

The National Health Service Central Register’s main outputs are :

› the database of all patients registered with a GP in England and Wales; › the provision of information from the database for use in primary health care; › the preservation of historic indexes and registers; and › the provision of services to meet customers’ needs.

GOAL

TO I M P ROV E T H E Q UA L I T Y, R E L E VA N C E A N D AC C E S S I B I L I T Y O F O U R S E RV I C E S TO A L L C U S TO M E R S ( A )

The General Register Office (GRO) has been involved in a number of joined-up policy initiatives across government including family policy, identity and fraud. Casework has increased significantly in the past few years and this year was no exception.

The Home Office consultation paper, Supporting Families, recommended a review of civil registration. A Review was announced in December 1998 and a Project Board has been set up to oversee the process of preparing a consultation paper. Work has begun with a series of discussions with key stakeholders, such as registrars, genealogists, local authorities and other government departments, in advance of the wider public consultation.

In April 1998 we employed Qualtech to act as a mystery shopper to evaluate the services provided by the GRO. Overall the results were positive and the exercise is to be repeated again this year. Qualtech also supplied more detailed information that has been used as part of our training programme.

The number of visitors to the Family Records Centre (FRC) has continued to increase.

On average in excess of 8,000 people visit every week with Saturday becoming one of the busiest days.The number of applications made in person have decreased whilst those by phone, e-mail and post have increased.This is in line with our strategy aimed at relieving congestion at the FRC and supplying a service to the public which is not driven by the need to apply in person.

Preparations for the introduction of the new registration service software (RSS2000) have been underway.This will replace software used in register offices which is not Year 2000 compliant. Roll-out of RSS2000 to the 600 register offices in England and Wales is due to begin shortly.

GOAL

TO I M P ROV E P U B L I C C O N F I D E N C E I N T H E I N T E G R I T Y O F O U R O U T P U T S ( B )

The GRO’s involvement in anti-fraud initiatives continued to increase in 1998–99. A system for regular liaison and exchange of information with the UK Passport Agency and the Department of Social Security was set up and has proved to be successful in the discovery and investigation of a number of frauds. Work commissioned by the Ministerial group set up as a result of the Green Paper, Beating Fraud is Everyone’s Business, required a significant amount of input on civil registration.

16

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

Alongside the roll-out of the RSS2000 the GRO has begun to phase in a new background design for birth, stillbirth and death certificates.The new design is a result of a review of certificate security and will provide better protection against forgery and counterfeit.

GOAL

TO M I N I M I S E T H E BU R D E N O N T H O S E S U P P LY I N G I N F O R M AT I O N , S U B J E C T TO T H E N E E D S O F G OV E R N M E N T A N D S O C I E T Y F O R H I G H Q UA L I T Y I N F O R M AT I O N ( C )

The legislation covering civil registration is very prescriptive and prevents the registration service operating at premium efficiency.The Review of Civil Registration’s aim is to provide a service that is responsive to the needs of modern society, capable of adapting and evolving with technological advances.This could contribute to the joined-up Government initiative of citizens providing information only once to government. Fundamental change will depend on legislative reform. In the meantime the rationalisation of registration districts has helped local authorities to amalgamate registration districts, thereby increasing efficiencies for local authorities and the public.

Following a public consultation on its draft the Welsh Language Board approved the ONS Welsh Language Scheme. Prepared under the Welsh Language Act 1993 it sets out how we will put into practice the principle of treating the Welsh language on an equal basis.

Mae’r Swyddfa Ystadegau Gwladol (SYG) yn croesawu pob gohebiaeth yng Gmraeg. Ein bwriad yw cynnig gwasanaeth dwyieithog ar draws y cyfan o weithgareddauir SYG. Dyma’r rhifau ar gyfer ymholiadau Cymraeg: Ymholiadau am gofrestu sifil: 0151 471 4575 Ymholiadau ystadegol a rhai cyffredinol: 01633 813381 Dylai ymholiadau ysgrifenedig ar gofestru gael eu cyfeirio i’n swyddfa yn Southport a phob ymholiad arall i swyddfa Casnewydd. Mae’r cyfeiriadau ar y tu mewn i’r clawr. Mae copiau o’r cynlln ar gael drwy gysylltu ein llyfgell yng Nghasnewydd.

17

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

Darra Singh is Chief Executive of Hexagon Housing Association. He is pictured with his

Senior

Scanlan,

Administration

and

Finance

Officer,

Director,

Mary Chris

Birchall, on the site of their new offices in

South

London.

ONS’s

statistics

on

industry and commerce provide a wide range of information on the structure of the UK economy covering employment, wages, sales and factory gate prices. Data can be used in assessing an area for relocation in terms of potential competitors, business customer bases, supply businesses, available workforce, and remaining market potential.

O F F I C E - W I D E AC T I V I T I E S GOAL

TO I M P ROV E VA L U E F O R M O N E Y A N D O P E R AT E E F F I C I E N T LY A N D E F F E C T I V E LY ( D )

Efficiency savings achieved by ONS in 1998–99 amounted to £9.26 million.These were gained by consistent efforts across all Groups to improve on their target figures, together with the savings now starting to accrue from rationalisation of our London accommodation.

Over the past three years, since the creation of ONS, we have achieved efficiency savings of £22.5 million.

ONS EFFICIENCY REVIEW

To identify future efficiency savings for reinvestment into improved outputs a review was undertaken by KPMG in September 1998 with the following terms of reference: To review the scope for improving the efficiency with which ONS delivers its planned outputs; and to identify quantified proposals for savings. The review will examine the scope for radical changes for both direct service delivery and support services, for example through innovative use of technology, increased publicprivate partnerships, business process re-engineering and rationalisation.

KPMG presented their findings to an independent Steering Group, chaired by Peter Ellwood of Lloyds-TSB, who reported their recommendations to the Economic Secretary to the Treasury (EST) on 5 February 1999.The EST approved the recommendations on 24 February 1999. An Efficiency Review Programme Steering Group has been set up to implement a programme of action to deliver the savings identified of around £20 million per year after four years.

2001 CENSUS

Our public service agreement commits us to achieving a good value for money Census in 2001.The preparation for Census day 2001 has been progressing steadily.The results of the Census Test, carried out in June 1997, were completed this year and had a large input into the decision-making process in relation to areas such as form design and data collection. In the drive to improve the cost-effectiveness of the operation we are harnessing outside experience.The results from the Census Test helped us to design the specification for the contracts. Five major contracts, valued at a total cost of around £50 million, were awarded to handle a number of key activities including the printing, distribution, collection and processing of the forms and the field staff payroll.

The Census Test was also used to test the acceptability of questions related to sensitive issues.This work informed the 2001 Census White Paper which was laid before Parliament on 4 March.The year ended with the culmination of the planning for the Census Dress Rehearsal which is to be conducted in April 1999.

O F F I C E AU TO M AT I O N

In September 1998 the ONS Policy Board agreed a three-year vision for ONS office automation (OA) that: ONS staff will be skilled and knowledgeable and make cost-effective use of the OA environment. Lotus Notes will underpin their day-to-day activities, providing access to all the information, systems and communications resources they need and supporting process control and work-flow management. It will support these activities regardless of whether staff are working at their desk, at another ONS location or away from the office. In-house paper usage will be reduced to 25 per cent of 1998 levels and ONS will reduce its expenditure on software licenses for the OA environment by 50 per cent.

19

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

Ernest Peck is 79 and sells newspapers from a stand outside the Bank of England, where some of the key national macroeconomic decisions are made. ONS economic statistics play an important role in the management and monitoring of the economy. They are used for analyses within government, the City, business and academia and, directly or indirectly, have a bearing on citizens like Ernest whose lives are affected by changing economic conditions. Data on money supply and credit, banks and building societies, interest and exchange rates are published in the monthly Financial Statistics.

This vision represents a significant change in the way ONS operates and offers substantial opportunities for improving our efficiency, effectiveness and quality.

Planning for the Year 2000 continued. During the year the central Year 2000 team resources were increased by 50 per cent.

To ensure that staff are aware of the potential problems of the Millennium Bug we held a series of workshops covering: testing strategy; risk assessment and contingency planning; and millennium business planning.

We have an extensive programme to ensure all ONS systems are Year 2000 compliant.

At the end of March 1999 we had completed 70 per cent of IT systems and 75 per cent of embedded systems. We have also prepared draft Millennium Business Plans.

Work on compliance continues into 1999–2000. Our target date for completion of business critical systems is September 1999.

GOAL

TO M A I N TA I N A N D D E V E L O P A W E L L - M OT I VAT E D WO R K F O R C E ( E )

ONS invited all staff to participate in the annual Staff Perception Survey in late 1998.

73.6 per cent of staff completed the questionnaire; an increased response rate from 1997 (72.9 per cent). Overall responses to the full range of questions showed an improvement in ratings of 5 to 6 per cent.

The specific survey question ‘my job makes good use of my relevant skills and abilities’ is used as a measure of this goal.The rating improved but did not meet the target. See Annex A on page 24 for details.

Investors in People The ONS office in Southport and the Family Records Centre in London received Investors in People accreditation in July 1998. At the same time the remainder of the Office was undergoing its pre-assessment. Following on from the results of that pre-assessment, action plans were completed to achieve our goal of full accreditation. Taking forward the recommendations of the ONS Efficiency Review will provide us with an additional challenge but we are committed to developing and carrying forward work resulting from the review in a way that is consistent with achievement of IiP.

21

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

THE FUTURE The next few years will see considerable change for ONS.The ONS Efficiency Review recommendations focused on reducing costs through a combination of further streamlining of our activities and working more closely with appropriate private sector organisations.This was expected to lead to the transfer of around 680 jobs to the private sector under TUPE arrangements and to 350 posts which would no longer be required.

This does not take account of the new posts that will be created as a result of recycling the savings into new outputs.The programme of action designed to deliver these savings is underway.

The management team at the top of the office has also been changed as a result of the Efficiency and Average Earnings Reviews.Two new statistical Directorates, economic and social, have been created to improve coherence, and the post of Director of Methodology and Quality has been created to strengthen quality control. Registration will report direct to the Registrar General,Tim Holt. A new post of Director of Finance and Corporate Services has been created to lead the change programme.These posts will be advertised and filled in the coming year.The four new directors will form, with Tim Holt, the new ONS Executive Committee.

C RO S S - C U T T I N G C O M M I T T E E S

O N S G OV E R N A N C E

› Human Resources Committee › Information Systems Committee › Methodology and Quality Committee

Executive Committee plus 2 non-Executive Directors

S E N I O R M A N AG E M E N T PAY C O M M I T T E E

AU D I T C O M M I T T E E

The ONS Audit Committee provides the assurance to the Director on its internal audit programme.

Throughout these organisational changes the regular work of producing the current and future new statistical and registration services on which our many customers depend will continue.The ONS Business Plan 1999–2002 outlines our plans for the next three years detailing how we will continue to develop our services to meet the changing needs of our customers.These include:

› developing the Public Sector accounts, balance sheets and fiscal indicators; › implementing the ESA requirements for regional accounts; › developing a monthly index of service sector output; › enhancing trend and longitudinal analyses; › improving migration statistics, population estimates and projections; › developing the Social Focus series; › introducing new analyses covering variations in demography and health; › enhancing analysis on cross-cutting issues; › providing support on the Bill dealing with Welsh Language Registration issues and changes to marriage law in the Immigration and Asylum Bill;

› developing the ‘Traceline’ service; and › reviewing the future of the NHS Central Register in the context of the NHS wider information needs.

1999–2000 includes the challenge of beating the Millennium Bug. We are working to ensure that all of our computer systems are Year 2000 compliant and that we have contingency plans to deal with any problems that may emerge. Our Millennium Business Plans are aimed at minimising disruption.

22

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

The Census Dress Rehearsal took place in April 1999. It provides the opportunity to test the procedures for the Census proper in 2001.The results of this exercise will help us fine tune the arrangements for April 2001.

The registration review is expected to come forward with some radical proposals to bring the registration service up to date. However, fundamental change will depend on legislative reform.

The Government response to the Green Paper, Statistics – A matter of trust, is expected to be published soon.The future of National Statistics will have an impact not only on ONS but also across the whole of the Government Statistical Service. Devolution will in addition change the environment in which we operate.

With all the changes expected to take place, within the Office and externally, it is particularly important that we remain flexible to changing needs.Throughout all these changes our five goals remain key in driving forward our work programme.

23

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

ANNEX A – PERFORMANCE AGAINST TARGETS 19 9 8 – 9 9 SUCCESS CRITERIA

19 9 8 - 9 9 TA R G E T

TO I M P ROV E T H E Q UA L I T Y,

TO G OV E R N M E N T:

PERFORMANCE

R E L E VA N C E A N D AC C E S S I B I L I T Y O F

To receive formal recognition from HMT,

See opposite for comments from HMT,

O U R S E RV I C E S TO A L L C U S TO M E R S

DH, DTI and DfEE that performance has

DH, DTI and DfEE.

improved in line with negotiated concordats and targets.

TO T H E C I T I Z E N :

To respond to all public enquiries about

Over 130,000 substantive enquiries

statistical activities within ten days.

answered within the target response date.

TO BU S I N E S S :

To increase from the 1997–98 level the

Number of businesses using ONS statistics

number of businesses using statistics issued

rose to 30.7 per cent.Those describing

by ONS.

themselves as very or completely satisfied,

To increase from the 1997–98 level the

fell to 22.2 per cent, however the mean

percentage who express themselves as

satisfaction score rose from 5.0 to 5.1.

satisfied with the service provided.

None of these changes are statistically significant.

TO A L L C U S TO M E R S :

To release all publications in accordance

All high profile First Releases were

with pre-announced dates.

published to schedule. Of the 421 publications published by ONS, 91 per cent were released in accordance with the pre-announced dates.The reasons for delays to 31 reports were: a: delays in data processing – 17 reports b: problems during the printing stage – three reports c: date announced before production schedules finalised – 11 reports (the method of reporting release dates changed for some titles.This led to some incorrect information being announced in the early part of the year)

To meet all detailed targets for the

GRO met its targets for service availability.

registration service.

93 per cent of casework was dealt with by the target date (five days for urgent correspondence and 20 days for other).

84 per cent of certificates were provided within the stated target time.There were particular difficulties in providing (nonurgent) postal certificates primarily due to a 22 per cent rise in demand.

TO I M P ROV E P U B L I C C O N F I D E N C E I N OUR OUTPUTS

To continue to measure public confidence

In spite of frequent reference to ONS in

in official statistics and public recognition of

the media in the last year, and extensive

ONS and to take forward the proposals

coverage of the problems with the Average

set out in Statistics: A Matter of Trust.

Earnings Index, public awareness of ONS as the body mainly responsible for government statistics was, at 5 per cent, the same in March 1999 as in the two

24

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

SUCCESS CRITERIA

19 9 8 - 9 9 TA R G E T

PERFORMANCE

previous years.There was also little change

TO I M P ROV E P U B L I C C O N F I D E N C E I N

between 1998 and 1999 in public

O U R O U T P U T S (CONT)

perceptions of the accuracy of the RPI or of the unemployment figures.

The difficulties with the AEI appear to have had little impact on the general public: only 41 per cent said that they thought the AEI was generally or sometimes misleading, compared with 53 per cent in relation to the RPI and as many as 66 per cent in relation to the unemployment figures.

The White Paper on National Statistics has not yet been published.

TO M I N I M I S E T H E BU R D E N O N T H O S E W H O S U P P LY U S W I T H DATA , S U B J E C T TO T H E N E E D S O F

To limit business compliance costs to no

Compliance costs were estimated at

more than £20.7 million in accordance

£20.5 million.

with the compliance plan.

G OV E R N M E N T A N D S O C I E T Y F O R H I G H Q UA L I T Y I N F O R M AT I O N TO I M P ROV E VA L U E F O R M O N E Y A N D O P E R AT E E F F I C I E N T LY A N D E F F E C T I V E LY

To achieve the efficiency improvements

Efficiency savings of £9.26 million were

identified in the efficiency plan totalling

identified.

£6.2 million.

TO D E V E L O P A N D M A I N TA I N A W E L L

To conduct a staff perception survey to

Overall responses showed an improvement

M OT I VAT E D WO R K F O R C E

measure progress from 1997–98 and to

in ratings of 5 to 6 per cent. A rating of 64

achieve an improved rating of over 65 per

per cent was achieved against the specific

cent on the question ‘my job makes good

question.This was an increase on last year’s

use of my relevant skills and abilities’.

rating but it failed to meet the target.

Assessment of performance from major departmental customers HMT recognised that many aspects of the service it received had been satisfactory or more than satisfactory, but in some respects expectations had not been met.

DH acknowledged that our performance against agreed targets has improved in five out of 11 Service Level Agreements (SLA), remained the same in five; and slightly deteriorated in one (largely the result of loss of skilled staff).

DTI reported that in three areas ONS service was excellent, in 19 areas it was good, in three it was satisfactory and in four it was unsatisfactory. Co-operation between colleagues in ONS and DTI was good.

DfEE’s performance assessment underlying the concordat emphasises four central aspects of ONS service: delivery of data; consultation and communication; technical advice; and data quality; as well as some specific issues for the current year. DfEE’s assessment is that overall performance is good and ONS has sought to improve quality on a range of fronts.

25

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

Gill Whitworth is 59; she had polio when

she

was

17

and

requires

personal assistance 24 hours a day.

Her

disability

doesn’t

stop

her

from being a member of a number of committees, church

publishing

paper

and

the

singing

local in

a

choir. She lives with her mother, Evelyn, who is 92. In the UN International Year of the Older Person, ONS’s Social Focus on Older People reports on experiences, lifestyles and attitudes of older people in the UK today.

A N N E X B – R E C R U I T M E N T 19 9 8 – 9 9 Number of staff recruited on either a permanent or fixed-term basis not including casual appointments.

PAY

NUMBER

PERCENTAGE OF

PERCENTAGE

PERCENTAGE WITH

RECRUITED

ETHNIC MINORITIES

OF WOMEN

DISABILITIES

SCS

1

0

100

0

C4

5

20

60

20

C3

8

0

50

0

C2

2

0

50

0

C1

3

0

66

0

B2

9

0

44

0

B1

33

0

50

0

A2

199

1

65

2

A1

73

1

67

0

BAND

Exceptions permitted by the Civil Service Commissioners’ Recruitment Code during 1998–99 were:

› Nine cases where casual staff appointments were extended beyond 12 months up to 23 months. All these extensions were to enable the staff concerned to complete projects.

› Three TSOs had their contracts converted from casual to fixed term. › One secondee joined the department. › Three members of staff joined ONS on re-employment terms.

A N N E X C – AV E R A G E E A R N I N G S I N D E X In 1998 ONS introduced major revisions to the Average Earnings Index (AEI).These were planned to correct for various shortcomings of the Index including the need to keep pace with the changing structure of the economy. Improvements to the coverage of companies in expanding parts of the economy started in April 1998 with first results published in August 1998. In October 1998 further changes were introduced.

Whilst preparing the second set of changes it emerged that the changes to the coverage of companies had not been applied correctly and revised figures were issued in early October.The second set of changes in mid-October also generated concerns amongst economic commentators about the new methodology. As a result the Chancellor of the Exchequer commissioned a review of the changes and the Director of ONS took the decision to suspend publication of the Index.

This programme of intensive scrutiny identified a number of shortcomings in the Index.

Some were significant in the original Index; others were accentuated in the Index of 14 October. Amongst other things, the revised methodology increased the chance that the index could be sharply affected by wage movements in some individual firms.This scrutiny highlighted important lessons which ONS is determined to learn.

The review was published in March 1999. At the same time, the Index was reinstated, incorporating the revised methodology recommended in the review. In all, there were 37 recommendations spanning a range from detailed technical methodological issues to internal management practice within ONS. A change programme has been agreed, a programme manager at Board level has been appointed and projects have been established to carry forward each recommendation.This will be a major task for ONS during 1999–2000.

27

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

ANNEX D – ONS PUBLISHING APRIL 1998 – MARCH 1999 SUBJECT AND FREQUENCY

HIGH PROFILE REGULAR OUTPUTS

OT H E R R E G U L A R A N D O U T P U T S

– FIRST RELEASES

– R E P O RT S

› Engineering Turnover and Orders › Index of Production › Machine Tools › Motor Vehicle production › Producer Prices › Retail Sales

› Aerospace and Electronic Cost Indices

C O M M E R C E , E N E R G Y A N D I N D U S T RY

monthly

(MM19)

› Motor Vehicle Production and New Registrations (PM34.10)

› Producer Prices Indices (MM22) › Retail Sales (SDM28) › Price Index Numbers for Current Cost Accounting (MM17)

quarterly

› Acquisitions and Mergers involving UK Companies

› Distributive and Services Trade › GB Cinema Exhibitors › Institutional Investment › Stocks (provisional; final) annual

› Business Enterprise Research and Development

› Gross Domestic Expenditure on R&D › Overseas Direct Investment

› Assets and Liabilities of Finance Houses and other credit companies (SDQ7)

› Insurance Companies and Trusts Investment (MQ5)

› Product Sales and Trades reports (35 vols) › Sector Reviews reports (4 vols) › Stockbuilding (SQ1) › Mineral Extraction in Great Britain (PA1007)

› Production and Construction Inquiries summary volume (PA1002)

› Product Sales and Trade reports (1 vol) › Research and Development in UK Business (MA14)

› Sector Review reports (5 vols) › Size Analysis of UK Businesses (PA1003) › UK Trade in Services (UKA1) THE ECONOMY

monthly

quarterly

› UK Trade › Public Sector Finances › Retail Price Index › Harmonised Index of Consumer Prices › Balance of Trade in Goods › Public Sector Borrowing Requirement › Business Investments › GDP Preliminary Estimate › Government Deficit and Debt under the Maastricht Treaty

annual

› Institutional Investment › Public Sector Accounts › United Kingdom Balance of Payments › United Kingdom National Accounts › UK Output, Income and Expenditure › Capital Expenditure (provisional) › Capital Expenditure (final) › Profitability of UK Companies

› Economic Trends › Financial Statistics › Monthly Review of External Trade Statistics (MM24)

› Retail Price Index (MM23) › Consumer Trends › Overseas Trade analysed in terms of Industries (MQ10)

› United Kingdom Economic Accounts

› Economic Trends Annual Supplement › Input-Output Balances for the UK › Overseas Direct Investment (MA4) › United Kingdom Balance of Payments (Pink Book)

› United Kingdom National Accounts (Blue Book)

28

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

SUBJECT AND FREQUENCY

HIGH PROFILE REGULAR OUTPUTS

OT H E R R E G U L A R A N D O U T P U T S

– FIRST RELEASES

– R E P O RT S

› Integrated Labour Market statistics

› Labour Market Trends › Labour Force Survey quarterly supplement › Annual Employment Survey › New Earnings Survey

LABOUR MARKET

monthly quarterly

–

annual

–

H E A LT H A N D C A R E

monthly quarterly

annual

› Weekly deaths in England and Wales › Legal Abortions › Legal Abortions › Cancer Registrations › Mortality Statistics › Deaths – all ages: infant; perinatal › Sudden Infant Deaths

–

› Health Statistics Quarterly › Legal Abortions (Monitor) › Abortions Statistics › Legal Abortions (Monitor) › Cancer Registrations › Cancer Registrations (Monitor) › Congenital Anomalies › Deaths by Certain Causes (Monitor) › Key Health Statistics from General Practice › Mortality – causes (DH2) › Mortality – childhood (DH3) › Mortality – general/area (DH1) › Mortality – injury and poisoning (DH4) › Infant and Perinatal Mortality (Monitor) › Sudden Infant Deaths (Monitor)

P O P U L AT I O N A N D M I G R AT I O N

quarterly

annual

› Population Estimates – UK, mid-year › Births › Marriages and Divorces › International Migration (UK) › Population Projections

› Population Trends

› Family Expenditure Survey › UK Electoral Statistics – local

› Electoral Statistics (UK) (Monitor) › Family Spending

› Births (FM1) › Births (Monitor) › International Migration (UK) (MN) › Key Population and Vital Statistics (PP1/VS) › Marriages and Divorces (FM2) › Divorce (Monitor) › Marriage (Monitor)

S O C I A L A N D W E L FA R E

annual

government electors

› Welsh Electoral Statistics T R A N S P O RT, T R AV E L A N D TO U R I S M

monthly

› Overseas Travel and Tourism

quarterly

–

annual

–

–

› Overseas Travel and Tourism (MQ6) › Travel Trends

REFERENCE AND COMPENDIA

monthly

–

annual

–

29

› Monthly Digest of Statistics › Annual Abstract of Statistics › Britain Handbook › Regional Trends › Social Trends

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

A D - H O C P U B L I C AT I O N S A P R I L 19 9 8 – M A R C H 19 9 9 COMPENDIA AND REFERENCE

› Focus on London › Focus on the South West › Gazetteer of the old and new geographies of the UK › ESRC Review of Government Social Classifications › Tracking People: A guide to longitudinal social sources › Report of the 1998 Review of the Longitudinal Study THE ECONOMY

› UK Environmental Accounts › Economic Trends Digest of Articles › European System of Accounts – Concepts, Sources and Methods (2 volumes) › Introducing the European System of Accounts 1995 in the United Kingdom › Sector Classification for the National Accounts › Share Ownership 1997 H E A LT H A N D C A R E

› Informal Carers › Health in England › Prisoners' Psychiatric Survey › Teenage Smoking Attitudes Survey 1997 › Omnibus Survey – Smoking-related behaviour and attitudes 1997 › Omnibus Survey – Drinking; adults behaviour and knowledge in 1998 › Omnibus Survey – Contraception and Sexual Health in 1997 G OV E R N M E N T A N D P U B L I C S E C TO R

› GSS Methodology Series – (9 reports) T R A N S P O RT, T R AV E L A N D TO U R I S M

› National Travel Survey Technical Report S O C I A L A N D W E L FA R E

› Family Resources Survey Technical Report › Social Focus on the Unemployed › Social Trends Pocketbook › Social Focus on Women and Men › Social Trends Quarterly – Pilot Edition

30

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

AC C O U N T S 1 9 9 8 – 9 9 32

F O R E WO R D TO T H E AC C O U N T S

35

AC C O U N T S

40

N OT E S TO T H E AC C O U N T S

53

AC C O U N T S D I R E C T I O N

55

S TAT E M E N T O F AG E N C Y ’ S A N D D I R E C TO R ’ S R E S P O N S I B I L I T I E S

56

S TAT E M E N T O F T H E S YS T E M O F I N T E R N A L F I N A N C I A L C O N T RO L

58

AU D I T C E RT I F I C AT E

31

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

F O R E WO R D TO T H E AC C O U N T S I N T RO D U C T I O N

The Accounts for the year ended 31 March 1999 have been prepared on an accruals basis in accordance with a direction given by HM Treasury dated 11 November 1997 in pursuance of section 5(1) of the Exchequer and Audit Departments Act 1921.The Accounts are subject to audit by the Comptroller and Auditor General.

F I N A N C I A L M A N AG E M E N T D E V E L O P M E N T S

The Office for National Statistics (ONS) was formed on 1 April 1996 by the merger of the Central Statistical Office (CSO) and the Office of Population Censuses and Surveys (OPCS).

› ONS has continued to develop its financial management and accounting systems to meet the developing needs of the organisation and the requirements of Resource Accounting and Budgeting.

› A new Principal Finance Officer and a new Director of Finance have been appointed and increased staff resources are now devoted to the Accounts production process with full management reviews.

› An updated version of our Executive Information System has now been fully installed giving managers easier access to financial information held on the main accounting system.

› A Year 2000 version of our CHAMELEON accounting software was loaded, tested and put into operation in December. However, the software supplier subsequently advised us of a potential Y2K problem. Action is in hand to resolve this by 31 July 1999 at the latest.

› ONS’s banking services requirements were put out to competitive tender.The Paymaster now operates all facilities, including a EURO account.

› Reviews of account coding and overheads procedures were undertaken with new arrangements being introduced on 1 April 1999.

› A Year 2000 compliant time recording system was developed and became operational from 1 April 1999.

› Accounting arrangements were made for the introduction of the Government Purchase Card on 1 April 1999.

FUTURE DEVELOPMENTS

› ONS will continue to develop its financial management and accounting systems to meet the developing needs of the organisation, the requirements of Resource Accounting and Budgeting, and the Green Paper, Statistics: A Matter of Trust.

› As part of the ONS Efficiency Review we will examine the options for improving the cost effectiveness of our accounts processing work.

› A trial Resource Account will be prepared for 1998–99.

M I L L E N N I U M BU S I N E S S P L A N N I N G

The Office for National Statistics has continued its programme of work to ensure continuity of service to users of its services and products through the end of century date change marking the new millennium. A member of the ONS Executive as the sponsor for the ONS Y2K Programme chairs the programme board. Progress is monitored closely, reporting to the ONS Executive Committee. Regular reports are sent to the Cabinet Office via CCTA, and to the ONS Minister the Economic Secretary to the Treasury.

To provide an independent check on the state of the programme, ONS commissioned Impact to carry out a Y2K Readiness Review in January 1999.This was followed by Internal Audit (KPMG) completing a report in June 1999, which ONS will respond to by the end of July.

The scope of work remaining includes:

› › completion of ONS Millennium Business Plans by the end of August prior to the completion of the remaining compliance programme by the end of September

commencement of the Change Moratorium period that starts on 1 September

32

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

› continuing to review and test contingency plans by the end of October All of the work is planned and fully resourced from both management and financial perspectives.

The total cost of the work is expected to be £2.9million.

F I N A N C I A L R E S U LT S

For the financial year ended 31 March 1999, ONS’s gross costs were £125.7m with income of £30.5m. Income arises from a variety of sources including sales of registration certificates, the provision of social surveys, sales of statistical data relating to business, the economy, population and health and the provision of services, such as the National Health Service Central Register, to other government departments.

A N A LYS I S O F N E T C O S T O F O U T P U T

The net cost of output (see page 35), attributed on a full economic cost basis, is as follows: £000’S 1998–99

Statistical services Register services

86,485 8,679 95,164

NET COST OF OUTPUT

AC C O U N T S D I R E C T I O N R E P O RT I N G R E Q U I R E M E N T S

The above review of Financial Management Developments and Financial Results supplements the performance report on key targets shown in Annex A to the Director’s Annual Report. In addition the other requirements of the schedule accompanying the ONS Accounts Direction (including information on the background, history and activities of ONS, details of Board members, and staffing policies) are shown in the Annual Report.

C A S H M A N AG E M E N T

ONS is Vote funded (Class XVI,Vote 11). Provision and outturn for the year ended 31 March 1999, taking account of supplementary estimates and a cash limit adjustment, were as follows:

Running costs Other current Capital expenditure Receipts NET

£000’S

£000’S

P R OV I S I O N

OUTTURN

126,581 110 5,817 (32,368) 100,140

121,935 610 6,050 (32,368) 96,227

FIXED ASSETS

ONS assets include computers and associated equipment, bespoke software developed in-house, vehicles, office and other equipment.

ONS occupies rented accommodation in London at Drummond Gate, and Myddelton Place. Rented accommodation is also occupied at Lancaster Court in Titchfield and at Runcorn.

Former Common User Estate property occupied in Newport,Titchfield, Christchurch, and Southport valued at £12.826m was brought onto the Balance Sheet at 1 April 1998.

Capital Interest charge and Depreciation are charged to the Net Expenditure Account and Revaluation to the Revaluation Reserve.

A S S E T S U N D E R C O N S T RU C T I O N

Assets under construction consist of in-house bespoke software and major works undertaken to refurbish accommodation occupied. All significant expenditure will be capitalised on completion.

C R E D I TO R PAY M E N T P O L I C Y

ONS is committed to the CBI prompt payment code and aims to pay all invoices within 30 days of receipt of goods or presentation of a valid invoice, whichever is later. During the period 1 April 1998 to 31 March 1999, 95.6% of all relevant invoices were paid within 30 days.

33

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

P O L I C Y O N D I S A B L E D S TA F F

ONS is committed to equal opportunities for disabled staff, including full implementation of the 1995 Disability Discrimination Act. ONS has received Employment Service approval for the use of the ‘Two Ticks’ symbol on stationery and advertisements to denote our positive approach to disability. We publish an Equal opportunities program for action which includes action for staff with disabilities.

S TA F F I N VO LV E M E N T I N T H E BU S I N E S S

ONS recognises the CPSA, PTC, IPMS and the FDA to represent staff. Formal and informal discussions regularly take place on a number of matters of mutual interest. Staff are also represented on the Health & Safety Committee, working with managers to ensure a safe working environment.

Our published Visions and Values statement recognises the need to maintain a wellmotivated workforce by development of skills, teamwork and good management. ONS has developed a new human resources policy and is currently working towards ‘Investors in People’ accreditation.

Monthly briefing sessions are held for all staff.These are based on a cascaded message from the Board (the Core Brief).They provide staff with an opportunity to respond to issues raised in the Brief and to give feedback to the Board.

ONS is committed to the continued development of equal opportunities policies. Its policies and practices on recruitment and promotion are based on the ability of candidates to perform the job. Full and fair consideration is given to all candidates without regard to issues of disablement, sex or ethnic origin.

M A N AG E M E N T B OA R D

The Management Board at 31 March 1999 consisted of:

› Dr D Holt › Dr M Pepper › Mr J Kidgell › Mr J Pullinger › Dr J Fox › Mr J Calder › Mr D Roberts › Mrs G Batchelor › Mr J Beaumont

Director, Registrar General and Head of the GSS Business Statistics Macro-Economic Statistics and Analysis Socio-Economic Statistics and Analysis Census, Population and Surveys Statistical Support Services Administration Services and Registration Non-Executive Director Non-Executive Director

Dr LD Mayhew, formerly Head of Administration Services and Registration, left ONS in July to be replaced by Mr D Roberts who moved from Socio-Economic Statistics and Analysis where he was replaced by Mr J Pullinger.

Mrs M Berg ceased to act as a Non-Executive Director in March 1998 and was replaced by Mrs Batchelor.

Following the Efficiency Review and with effect from 1 April 1999 the Board will consist of Dr Holt, the Non-Executive Directors and Mr Roberts, Dr Fox, Mr Kidgell and Mr Calder.

Dr D Holt Director 21 July 1999

34

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

AC C O U N T S

N E T E X P E N D I T U R E AC C O U N T FOR THE PERIOD ENDED 31 MARCH 1999

1998–99 N OT E S

£’000

1997–98

£’000

£’000

£’000

EXPENDITURE

Running costs

119,947

122,816

Depreciation

3, 4 9

3,009

3,532

Notional superannuation

5

408

(1,175)

provided from other Votes

6

31

164

Notional interest

7

2,303

Other non-cash costs and services

Gross cost of output

1,863 125,698

127,200

(30,534)

(29,405)

95,164

97,795

INCOME

Less income from services supplied in year

8

NET COST OF OUTPUT

The Notes on pages 40 to 52 form part of these Accounts

All activities are classed as continuing

35

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

BALANCE SHEET A S AT 3 1 M A R C H 1 9 9 9 1998–99 N OT E S

£’000

£’000

1997–98 R E S TAT E D £’000

£’000

TA N G I B L E F I X E D A S S E T S

Fixed assets Assets under construction

9 10

45,998

26,663

996

507 46,994

27,170

CURRENT ASSETS

Debtors and prepayments

11

Cash at bank and in hand

5,123

4,708

722

1,635

5,845

6,343

(4,122)

(5,456)

CURRENT LIABILITIES

Creditors (due within one year)

12

1,723

NET CURRENT ASSETS

887

T O TA L A S S E T S L E S S CURRENT LIABILITIES

48,717

Creditors (due after more than one year)

14

(60)

Provisions for liabilities and charges

13

(2,834)

28,057 (161) (3,285)

(2,894)

(3,446)

45,823

24,611

FINANCED BY

General Reserve

18

41,009

24,378

Revaluation Reserve

19

4,814

233

45,823

24,611

The Notes on pages 40 to 52 form part of these Accounts

Dr D Holt Director 21 July 1999

36

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

C A S H F L O W S TAT E M E N T FOR THE YEAR ENDED 31 MARCH 1999

Reconciliation of net expenditure to net cash outflows from operating activities 1998–99 N OT E S NET EXPENDITURE

£’000

(from the Net Expenditure Account)

£’000

1997–98 £’000

£’000

95,164

97,795

(3,009)

(3,532)

1,390

(180)

(202)

(172)

Adjustment for items not involving the movement of funds: Depreciation Reclassifications Adjustment for finance lease/hire purchase Losses on sale on fixed assets Return on investments and servicing of finance Interest

9 9, 10 14

(67)

9 14

(3)

(9)

(2,303)

(1,863) (130)

Insurance

7 6

Audit fee

6

(31)

(34)

Superannuation

5

(408)

1,175

451

(1,475)

Decrease in provisions

13

Finance lease obligation

14

(161)

Movement in net current assets: Increase/(decrease) in debtors

11

415

(1,493)

Decrease/(increase) in creditors

12

1,233

(473)

92,697

89,381

92,697

89,381

N E T C A S H O U T F L OW F RO M O P E R AT I N G AC T I V I T I E S

C A S H F L OW S TAT E M E N T

Net cash outflow from operating activities C A P I TA L E X P E N D I T U R E

Payments to acquire tangible fixed assets

4,038

Proceeds from the sale of fixed assets

(10)

N E T C A S H O U T F L OW B E F O R E F I N A N C I N G

3,823 4,028 96,725

(35)

3,788 93,169

FINANCING

Payments on ONS Appropriation Accounts

128,595

123,238

Receipts on ONS Appropriation Accounts

(32,368)

(29,795)

VOT E E X P E N D I T U R E A P P RO P R I AT E D I N Y E A R

96,227

93,443

Capital element of finance lease payments

(415)

321

95,812

93,764

(913)

595

Decrease in cash held in the period

(913)

595

New acquisition of 3 servers

(219)

(800)

Cash paid in respect of lease

415

327

Change in net funds

(717)

122

Net funds at 1 April

1,162

1,040

N E T F U N D S AT 3 1 M A R C H

445

1,162

(DECREASE)/INCREASE IN CASH

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

The Notes on pages 40 to 52 form part of these Accounts

37

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

N O T E S T O T H E C A S H F L O W S TAT E M E N T N OT E 1 A N A LYS I S O F C H A N G E S I N N E T D E B T AT

OT H E R

AT

1 APRIL

NON-CASH

31 MARCH

1998

CHANGES

C A S H F L OW

1999

£’000

£’000

£’000

£’000

Cash

1,635

0

(913)

722

Obligations

(473)

(219)

415

(277)

Total

1,162

(219)

(498)

445

N OT E 2 M A J O R N O N - C A S H T R A N S AC T I O N S

During the year ONS entered into a hire purchase arrangement for the acquisition of computer equipment.

38

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 MARCH 1999 1998–99

Net cost of output

1997–98

£’000

£’000

95,164

97,795

Movement on Revaluation Reserve: net gain on revaluation of assets

(4,581)

(232)

Total gains and losses recognised since 1 April 1998

90,583

97,563

The prior year adjustment (see Note 2) has no monetary effect on this Statement.

39

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

N OT E S TO T H E AC C O U N T S 1 . AC C O U N T I N G P O L I C I E S

B A S I S O F AC C O U N T I N G

The Accounts for the Office for National Statistics have been prepared in accordance with the Accounts Direction issued by HM Treasury on 11 November 1997 pursuant to section 5(1) of the Exchequer and Audit Departments Act 1921 (see page 53).

The Accounts follow the accruals concept of accounting and the historical cost convention, modified to include revaluation of fixed assets as set out below.

Subject only to compliance with the requirements set out in the Accounts Direction, the Accounts also:

› comply with the accounting disclosure requirements of the Companies Acts insofar as they are consistent with the status of a Vote-funded Agency;

› comply with the accounting standards issued or adopted by the Accounting Standards Board unless they are deemed to be inapplicable by the Treasury.

FIXED ASSETS

Tangible fixed assets are capitalised above an agreed threshold at cost on acquisition and installation, or at their estimated current cost. Bespoke software is valued in accordance with FRS15. Assets are revalued each year to take account of specific changes on the basis of appropriate Producer Price Indices for :

› Computers › Office equipment › Motor vehicles › Office machinery › Building refurbishment Furniture and PCs below the capitalisation threshold are not capitalised.

D E P R E C I AT I O N

Depreciation is calculated so as to write-off the revalued cost or the valuation of assets by equal instalments over their estimated useful lives down to a residual value, as follows:

› Mainframes › Bespoke software › Proprietary software › PCs › Large office equipment › Small office equipment › Motor vehicles › Buildings and refurbishments

7 years 7 years 4 years 4 years 10 years 4 years 5 years Remaining life of lease

A S S E T S U N D E R C O N S T RU C T I O N O R D E V E L O P M E N T

Capitalised projects in the course of construction or development are not depreciated until the year in which they become fully operational.

S TO C K S

ONS holds a small stock of publications and CD-ROMs for resale.Their value is not material and is not included on the Balance Sheet. Production costs and sales income are charged to the Net Expenditure Account.

LEASES

Assets held under finance leases are included under tangible fixed assets at their capital value and depreciated over their useful economic lives. Leasing payments consist of capital and interest elements and the interest is charged to the Net Expenditure Account. Rentals

40

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

due under operating leases are charged over the lease term on a straight-line basis or on the basis of actual rentals payable where this fairly reflects usage.

H I S TO R I C DATA

Statistical and registration data have built up over many years and are stored for reference purposes.The cost of storing and maintaining this data has been charged to the Net Expenditure Account as incurred.

I N T E R E S T O N C A P I TA L

The financing structure of ONS does not include specific interest bearing debt, but to ensure that the Net Expenditure Account bears an appropriate charge for the use of capital in the business in the year, a notional interest charge is included. In accordance with Treasury guidance, the calculation is based on a 6% rate of return on average net assets employed at current values.

N OT I O N A L I N S U R A N C E P ROV I S I O N

The previous practice of making a notional insurance charge has been discontinued in line with HM Treasury instructions.

VAT

ONS is registered for VAT purposes.

VAT is reclaimed on certain bought-in services as agreed with HM Customs and Excise.

Irrecoverable VAT is included either in the expenditure in the Net Expenditure Account or in the cost of tangible fixed assets in the Balance Sheet.

INCOME

Income comprises the invoiced value of services supplied to the private sector, the wider public sector and other government departments.

FOREIGN CURRENCY

Foreign currency transactions are translated at the exchange rate in force at the time of the transaction. Exchange rate gains and losses are charged to the Net Expenditure Account.

RESEARCH & DEVELOPMENT

ONS undertakes certain research into statistical and survey methodology. Costs are charged to the Net Expenditure Account as they arise.

E A R LY R E T I R E M E N T

ONS operates an early retirement scheme which gives retirement benefits conforming with the Principal Civil Service Pension Scheme. ONS bears the costs of these benefits until the normal retirement age of the employees.

41

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

2. PRIOR YEAR ADJUSTMENT

In preparation for Resource Accounting, ONS has taken the opportunity to review its accounting policy with regard to disclosure of the surplus/deficit grant drawn down from the Consolidated Fund. In previous years this was included in the General Reserve balance. We now consider it more appropriate and transparent to include it in the Creditors balance on the Balance Sheet and as a separate line on Note 12.

The effects of the prior year adjustment on the previously reported figures are shown below: 1997–98 BALANCE SHEET

£’000

Creditors (due within one year) previously reported

3,076

Unused grant drawn down

2,380

Creditors (due within one year) restated

5,456

G E N E R A L R E S E RV E

42

General Reserve balance at 31 March 1998 previously reported

26,758

Unused grant drawn down

(2,380)

General Reserve balance at 31 March 1998 restated

24,378

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

3. RUNNING COSTS

RU N N I N G C O S T S I N C L U D E : 1998–99 £’000

£’000

Staff related costs

68,280

68,754

Accommodation and related services

13,856

19,570

Computer – current Surveys and data collection costs Other

4 . S TA F F D E TA I L S

A:

› Remunerations (including the Director's), salaries and wages Earnings related National Insurance contributions Other related costs

› Superannuation TOTA L S TA F F R E L AT E D C O S T S

B:

1997–98

› Director's and Non-Executive Directors’ remunerations:

7,170

5,939

20,105

15,386

10,536

13,167

119,947

122,816

1998–99

1997–98

£’000

£’000

56,256

54,892

4,067

3,946

615

2,803

60,938

61,641

7,342

7,113

68,280

68,754

1998–99

1997–98

£

£

99,881

97,533

4,732

12,145

The Director's total remunerations, excluding pension contributions The Director is a member of the Principal Civil Service Pension Scheme

› Non-Executive Board Members (2)

43

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

C:

› Senior employees OTHER BOARD MEMBERS

Remunerations within the following ranges:

D:

OTHER STAFF

1998–99

1997–98

1998–99

1997–98

£30,000–£34,999

-

-

91

70

£35,000–£39,999

-

-

60

58

£40,000–£44,999

-

-

36

31

£45,000–£49,999

-

-

13

17

£50,000–£54,999

-

-

9

8

£55,000–£59,999

1

-

6

7

£60,000–£64,999

-

2

2

-

£65,000–£69,999

3

1

-

-

£70,000–£74,999

2

3

-

-

£75,000–£79,999

-

-

-

-

£80,000–£84,999

-

-

-

1

£85,000–£89,999

-

-

-

-

£90,000–£94,999

-

-

1

-

› Number of employees:The average number of full time equivalent employees in the period 1 April to 31 March 1999 was 3,082.

E:

› The staff related costs do not include the fees and expenses of the 817 fee-paid interviewers employed on social surveys, which are included in the survey and data collection costs.

F:

› The employees of ONS are civil servants to whom the conditions of the Superannuation Acts 1965, 1972 and subsequent amendments apply. For the period ended 31 March 1999, contributions were paid to the Paymaster General at rates 12% to 18% (according to grade) of salaries determined by the Government Actuary and advised by HM Treasury.

44

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

5 . E A R LY R E T I R E M E N T C O S T S

The full cost of the early retirement departure decisions taken so far this year is estimated to be £637,000 and is being met in total by ONS.This has been offset by a reduction of £78,000, due to an over estimate of 1998–99 expenditure on previous years’ decisions.

1998–99

FUTURE YEARS

£’000

£’000

Cost met by ONS

559

3,622

Net notional charge*

408

0

Net Expenditure Account

967

0

6 . OT H E R N OT I O N A L C O S T S

1998–99

1997–98

A N D S E RV I C E S

£’000

£’000

*The notional charge relates to decisions made prior to 1 April 1997.

National Audit Office audit fee

note 1

31

34

Notional insurance

note 2

0

130

31

164

Notes: 1. The National Audit Office does not charge fees for the audit of On Vote Agencies. The notional audit fee however, represents the full cost of services provided.

2. On HM Treasury instructions, notional insurance is no longer charged to the Net Expenditure Account.

45

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

7 . N OT I O N A L I N T E R E S T O N

1998–99

1997–98

C A P I TA L E M P L OY E D

£’000

£’000

Interest on fixed capital (see Note 15) Interest on working capital

778

0

1,525

1,863

2,303

1,863

The interest on capital employed is calculated at 6%.

8. INCOME

For the purposes of company law and accounting standards, ONS has only one class of business, the vast majority of which arises in the UK.The following information is given to satisfy the additional disclosure requirements of the HM Treasury Fees and Charges Guide, in accordance with paragraph 3 of the Agency's Accounts Direction.

The only area of business where fee levels are regulated by statute is the supply of Registration Certificates.The financial objective is to recover full economic costs taking one year with another.The expenditure and income relating to Certificates was: 1998–99

1997–98

£’000

£’000

Income

5,191

4,806

Expenditure

4,585

4,786

606

20

Surplus in year

The balance of income, £25,343,000 (£24,599,000 in 1997–98), comes from services supplied, such as social surveys and the National Health Service Central Register, and from the sale of publications and data.

46

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

9 . TA N G I B L E F I X E D A S S E T S

LAND AND

COMPUTERS

MOTOR

OFFICE

BUILDINGS

(1)

VEHICLES

MACHINERY

TOTAL

£’000

£’000

£’000

£’000

£’000

17,748

17,243

154

3,022

38,167

18

2,565

41

431

3,055

Valuation at 1 April 1998 Additions (note 2) Transfers from assets under construction Reclassifications (note 3) Disposals (note 4) Revaluation (note 5) Valuation at 31 March 1999

626

280

0

0

906

13,560

626

(3)

(169)

14,014 (1,238)

0

(982)

(33)

(223)

4,707

0

2

(21)

4,688

36,659

19,732

161

3,040

59,592

Depreciation provision at 1 April 1998

859

8,736

71

1,838

11,504

1,551

4,812

32

358

6,753

143

(2,759)

(8)

(1,120)

(3,744)

0

(843)

(26)

(157)

(1,026)

109

0

1

(3)

107

2,662

9,946

70

916

13,594

At 1 April 1998

16,889

8,507

83

1,184

26,663

At 31 March 1999

33,997

9,786

91

2,124

45,998

Charge in year Reclassifications Disposals (note 4) Revaluation Depreciation provision at 31 March 1999 Net book value at current cost:

Notes: 1. Included within Computers are finance leases with a net value of £370,000 for which £146,000 was allocated as depreciation for the period.

2. ONS entered into a hire purchase arrangement to acquire 3 servers.

3. The main reclassifications represent: a) the bringing onto the Balance Sheet of land and buildings, and b) in preparation for Resource Accounting in 1999–2000, the opportunity has been taken to review and rationalise the price indices used for Modified Historic Cost Accounting, the cumulative backlog depreciation and the lives of certain assets.

4. Assets to the value of £1,238,000 were disposed of during 1998–99. These assets had a carrying value of £212,000 for which £10,000 was received leaving £202,000 to be charged to the Net Expenditure Account.

5. The downward revaluation (£2,517,000) in computers has been included within the depreciation charge for the year, as per FRS11.

47

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

IN-HOUSE

10. ASSETS UNDER CONSTRUCTION

Opening balance

SOFTWARE

BUILDINGS

PROJECTS

REFURBISHMENT

TOTAL

£’000

£’000

£’000

507

0

507 1,193

In year expenditure

391

802

Reclassification (note)

(12)

214

202

(280)

(626)

(906)

606

390

996

Transfers to fixed assets Closing balance

Note: The reclassification relates to: a) the net effect of expenditure on a software project being expensed in the 1997–98 Account and the total expenditure on another software project not reaching the capitalisation limit, and b) refurbishment work expensed in the 1997–98 Account.

C A P I TA L C O M M I T M E N T S

The capital commitments at 31 March 1999 were: £’000

Contracted for:

48

ON S

504

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

1 1 . D E B TO R S

1998–99

1997–98

£’000

£’000

2,593

2,397

416

693

Trade debtors (less provisions) Staff Other Prepayments Undrawn grant (note) Total

0

260

1,710

1,358

404

0

5,123

4,708

Note: The undrawn grant is the surplus Vote held on ONS's behalf by the Consolidated Fund.

1 2 . C R E D I TO R S

A M O U N T S FA L L I N G D U E W I T H I N O N E Y E A R 1998–99

1997–98 R E S TAT E D

£’000

£’000

202

0

0

0

Trade creditors Staff creditors Other creditors Accruals

233

222

1,471

1,466

Net obligations under finance leases/ hire purchase (Note 14) Deferred income Consolidated fund extra receipts Unused grant drawn down (Note 2) Provision for early retirement (Note 13) Total

220

321

27

355

1,181

0

0

2,380

3,334

4,744

788

712

4,122

5,456

Note: The movement in creditors, net of capital creditors, is £1,233,000.

1 3 . P R OV I S I O N F O R L I A B I L I T I E S AND CHARGES

Provision for early retirement

49

ON S

BALANCE AT

CHARGED

TRANSFERRED

BALANCE AT

1 APRIL

TO NET EXP.

TO

31 MARCH

1998

ACCOUNT

APPLIED

CREDITORS

1999

£’000

£’000

£’000

£’000

£’000

3,285

559

(222)

(788)

2,834

3,285

559

(222)

(788)

2,834

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

1 4 . L E A S E O B L I G AT I O N S

LAND AND BUILDINGS

OTHER

£’000

£’000

within one year

0

102

in the second to fifth years inclusive

0

0

Operating leases which expire:

over five years

3,315

0

3,315

102

Note: During 1998–99 ONS's expenditure on operating leases amounted to £6,768,000. Of this £6,666,000 was in respect of rent on land and buildings, including a one-off severance payment for St Catherine’s House, and £102,000 was on other leases.

Finance lease obligations: Payments due within: one year two to five years more than five years

161 0 0 161

Hire purchase obligations: Payments due within: one year

59

two to five years

60

more than five years

0 119

Note: During 1998–99 ONS acquired 3 servers under a 0% hire purchase agreement.

50

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

1 5 . P RO P E RT Y

Property Repayment Services (PRS) rents were abolished on 31 March 1998. On Treasury instructions property values have therefore been included on the Balance Sheet, where ONS is the sole or major occupier (Note 9). Notional interest on capital employed (Note 7) now includes a charge for these assets.

ONS land and buildings were valued at 30 June 1995 on an Open Market Value for Existing Use basis.Valuations were carried out for Property Holdings by independent firms of professional valuers, these being King Sturge for the Christchurch and Newport sites, Jones Lang Wootton for Titchfield and Edmund Kirby for Southport. Revaluation indices, supplied by HM Treasury, were applied to those valuations in order to calculate the 1 April 1998 values shown in Note 9. A professional Revaluation will take place in 2000.

16. CONTINGENT LIABILITIES

ONS has two industrial tribunals and one industrial injury case outstanding. Judgement is still pending so the amount of the liability is not known.

1 7 . R E L AT E D PA RT Y T R A N S AC T I O N S

ONS has had various material transactions with other government departments and other central government bodies. Most of these transactions have been with HM Treasury and the Departments of Health, Environment,Transport and the Regions,Trade & Industry and Education & Employment.

During the period reported on, none of the Board Members, members of the key management staff or other related parties had undertaken any material transactions with ONS. One senior manager is seconded to EUROSTAT, where he is spearheading their corporate planning programme. He is not in a position to influence the awarding of contracts to ONS. During the period 1 April 1998 to 30 June 1998 the Chief Executive, Dr Holt, was on unpaid leave from Southampton University. Dr Holt resigned from the University on 1 July 1998.

51

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

1 8 . G E N E R A L R E S E RV E

General Reserve at 1 April

1998–99

1997–98

£’000

£’000

24,378

29,864

Downward revaluation of assets charged to the Net Expenditure Account Land and buildings brought on charge

1,255 12,826

Finance lease Net Voted expenditure Non-cash items Net expenditure

(1,100) 96,227

1,091

(95,164)

(97,795)

41,009

24,378

1998–99

1997–98

£’000

£’000

Prior year adjustment (Note 2) General Reserve at the end of the period

1 9 . R E VA L UAT I O N R E S E RV E

Revaluation Reserve at 1 April

52

93,443

2,742

(2,380)

233

1

Surplus on revaluation

4,581

232

Revaluation Reserve at the end of the period

4,814

233

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

AC C O U N T S D I R E C T I O N AC C O U N T S D I R E C T I O N G I V E N B Y H M T R E A S U RY I N AC C O R DA N C E WITH SECTION 5(1) OF THE E X C H E Q U E R A N D AU D I T D E PA R T M E N T S AC T 1 9 2 1

1. The Office for National Statistics (ONS) shall prepare Accounts for the financial year ended 31 March 1998 and subsequent financial years comprising:

› a Foreword › a Net Expenditure Account › a Balance Sheet › a Cash Flow Statement, and › a Statement of Total Recognised Gains and Losses including such Notes as may be necessary for the purposes referred to in the following paragraphs.

2. The Accounts shall give a true and fair view of the income and expenditure, and cash flows for the financial year and the state of affairs as at the end of the financial year.

3. Subject to this requirement, the Accounts shall be prepared in accordance with;

› generally accepted accounting practice in the United Kingdom (UK GAAP); › the disclosure and accounting requirements contained in The Fees and Charges Guide (in particular those relating to the need for segmental information for services or forms of services provided) and in any other guidance which the Treasury may issue from time to time in respect of Accounts which are required to give a true and fair view;

› the accounting and disclosure requirements of Government Accounting (in particular Chapter 16) and the Treasury’s guidance paper Next Steps Agencies - Annual Reports and Accounts (February 1993), as amended or augmented from time to time, insofar as these are appropriate to the ONS and are in force for the financial year for which the Accounts are to be prepared.

4. Clarification of the application of the accounting and disclosure requirements of the Companies Act and accounting standards is given in Schedule 1 attached. Additional disclosure requirements are set out in Schedule 2 attached.

5. The Net Expenditure Account and Balance Sheet shall be prepared under the historical cost convention modified by the inclusion of:

› fixed assets at their value to the business by reference to current costs; and › stocks at the lower of net current replacement cost (or historical cost if this is not materially different) and net realisable value.

6. This Direction shall be reproduced as an appendix to the Accounts. It will not be necessary to reproduce the Pro Forma Accounts.

J Mortimer Treasury Officer of Accounts 11 November 1997

53

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

SCHEDULE 1 A P P L I C AT I O N O F T H E AC C O U N T I N G A N D D I S C L O S U R E REQUIREMENTS OF THE C O M PA N I E S AC T A N D AC C O U N T I N G S TA N DA R D S

C O M PA N I E S AC T

1. The disclosure exemptions permitted by the Companies Act shall not apply to the ONS unless specifically approved by the Treasury.

2. The Companies Act requires certain information to be disclosed in the Directors’ Report.To the extent that it is appropriate, the information relating to the ONS shall be contained in the Foreword.

3. When preparing its Net Expenditure Account the ONS shall have regard to the appended Pro Forma Account. Minor changes may be introduced subject to Treasury agreement.

4. When preparing its Balance Sheet, the ONS shall have regard to the Balance Sheet format 1 prescribed in Schedule 4 to the Companies Act.The Balance Sheet totals shall be struck at ‘Total assets less current liabilities’.

5. The ONS is not required to provide the historical cost information described in paragraph 33(3) of Schedule 4 of the Companies Act. 6. The Foreword and Balance Sheet shall be signed by the Accounting Officer and dated.

AC C O U N T I N G S TA N DA R D S

7. The ONS is not required to include a note showing historical cost profits and losses as described in FRS3.

SCHEDULE 2 ADDITIONAL DISCLOSURE REQUIREMENTS

1. The Foreword shall, inter alia:

› state that the Accounts have been prepared in accordance with a direction given by the Treasury in accordance with Section 5(1) of the Exchequer and Audit Departments Act 1921; and

› include a brief history of the ONS and its statutory background.

2. The Notes to the Accounts shall include details of the key corporate financial targets set by the responsible Minister together with an indication of the performance achieved.

54

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

S TAT E M E N T S TAT E M E N T O F T H E AG E N C Y ’ S A N D D I R E C TO R ’ S RESPONSIBILITIES

Under section 5(1) of the Exchequer and Audit Departments Act 1921 the Treasury have directed the Office for National Statistics to prepare a Statement of Accounts for each financial year in the form and on the basis set out in the Accounts Direction on page 53.

The Accounts are prepared on an accruals basis and must give a true and fair view of the Agency’s state of affairs at the year end and its income and expenditure and cash flows for the financial year.

In preparing Accounts, the Agency is required to:

› observe the Accounts Direction issued by the Treasury, including the relevant accounting and disclosure requirements and apply suitable accounting policies on a consistent basis;

› make judgments and estimates on a reasonable basis; › state whether applicable accounting standards have been followed, and disclose and explain any material departures in the financial statements;

› prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Agency will continue in operation.

The Accounting Officer of the Department of the Chancellor of the Exchequer has designated the Director of the Office for National Statistics as the Accounting Officer for the Agency. His relevant responsibilities as Accounting Officer, including responsibility for the propriety and regularity of the public finances and for the keeping of proper records, are set out in the Accounting Officers’ Memorandum issued by the Treasury and published in Government Accounting.

55

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

S TAT E M E N T S TAT E M E N T O F T H E S YS T E M O F INTERNAL FINANCIAL CONTROL

1. As Accounting Officer, I acknowledge my responsibility for ensuring that an effective system of internal financial control is maintained and operated by ONS. 2. The system can provide only reasonable and not absolute assurance that assets are safeguarded, transactions authorised and properly recorded, and that material errors or irregularities are either prevented or would be detected within a timely period.

3. It is based on a framework of regular management information, administrative procedures including the segregation of duties, and a system of delegation and accountability. In particular, it includes: a) comprehensive budgeting systems with an annual budget which is reviewed and agreed by the Management Board; b) regular reviews by the Board of periodic and annual financial reports which indicate financial performance against the forecasts; c) the setting of targets to measure financial and other performance; d) clearly defined capital investment control guidelines; and e) as appropriate, formal project management disciplines.

4. ONS has an internal audit unit, which operates to standards defined in the Government Internal Audit Manual.The work of the internal audit unit is informed by an analysis of the risk to which the body is exposed, and annual internal audit plans are based on this analysis.The analysis of risk and the internal audit plans are endorsed by the Audit Committee and approved by me. At least annually, the Head of Internal Audit (HIA) provides me with a report on internal audit activity in ONS.The report includes the HIA's independent opinion on the adequacy and effectiveness of ONS’s system of internal financial control.

5. During 1998–99 a major audit of budgetary control was carried out.This resulted in: a) the formation of a Finance Committee to oversee the operation of financial control arrangements; b) the finalisation of a financial framework within which managers are to operate; c) the establishment of a Financial Management Information Systems Development Project Board, reporting to the Finance Committee.This has reviewed the chart of accounts, time recording system and overhead methodology with the aim of improving the quality and transparency of financial management information.The changes arising from these reviews will be implemented from 1 April 1999; d) formal delegation letters, supporting the budgetary control system, being issued to managers as appropriate; e) the roll out of an improved version of our CHESS executive financial management information system.This gives managers quicker, clearer and direct access to information about their budgets, expenditure and income; and f) an enhanced role for the Audit Committee.

6. Of the other 35 audits carried out only one, relating to Sales Invoicing and Receipts, resulted in a non-assurance report. Measures will be taken during 1999–2000 to overcome the procedural shortcomings identified.

7. A further audit report, produced just after the year end, found some weaknesses in the procurement and management of consultancy projects in various parts of the Office.

Particular criticisms were made in respect of one contract, leading to further audit investigations in the business area concerned. Proposals have been developed to remedy the control shortcomings found in that area, and also to strengthen the guidance available to the Office generally on engaging and managing consultants.

56

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

8. My review of the effectiveness of the system of internal financial control is informed by the work of the internal audit unit, the Audit Committee which oversees the work of the unit, the executive managers within ONS who have responsibility for the development and maintenance of the financial control framework, and comments made by the external auditors in their management letter and other reports.

9. During 1998–99 a programme of action was undertaken to improve the quality and timeliness of the annual agency account.This included the institution of formal management reviews and an enhanced role for the Audit Committee.

Accounting Officer

57

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

C E R T I F I C AT E A N D R E P O R T O F T H E C O M P T R O L L E R A N D AU D I TO R G E N E R A L TO T H E H O U S E O F C O M M O N S I certify that I have audited the financial statements on pages 35 to 52 under the Exchequer and Audit Departments Act 1921.These financial statements have been prepared under the historical cost convention as modified by the revaluation of fixed assets and the accounting policies set out on pages 40 and 41.

R E S P E C T I V E R E S P O N S I B I L I T I E S O F T H E AG E N C Y, D I R E C TO R A N D AU D I TO R

As described on page 55, the Agency and Director are responsible for the preparation of the financial statements and for ensuring the regularity of financial transactions.The Agency and Director are also responsible for the preparation of the other contents of the Annual Report. My responsibilities, as independent auditor, are established by statute and guided by the Auditing Practices Board and the auditing profession’s ethical guidance.

I report my opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Exchequer and Audit Departments Act 1921 and Treasury directions made thereunder, and whether in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I also report if, in my opinion, the Foreword is not consistent with the financial statements, if the Agency has not kept proper accounting records, or if I have not received all the information and explanations I require for my audit.

I read the other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. I consider the implications for my certificate if I become aware of any apparent misstatements or material inconsistencies with the financial statements.

I review whether the statement on pages 56 and 57 reflects the Agency’s compliance with Treasury’s guidance ‘Corporate governance: statement on the system of internal financial control’. I report if it does not meet the requirements specified by the Treasury, or if the statement is misleading or inconsistent with other information I am aware of from my audit of the financial statements.

BASIS OF OPINION

I conducted my audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of financial transactions included in the financial statements. It also includes an assessment of the significant estimates and judgments made by the Agency and Director in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Agency’s circumstances, consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by error, or by fraud or other irregularity and that, in all material respects, the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. In forming my opinion I have also evaluated the overall adequacy of the presentation of information in the financial statements.

OPINION

In my opinion:

› the financial statements give a true and fair view of the state of affairs of the Office for National Statistics at 31 March 1999 and of its net cost of output, total recognised gains

58

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

and losses, and its cash flows for the year then ended and have been properly prepared in accordance with the Exchequer and Audit Departments Act 1921 and the directions made thereunder by the Treasury: and

› in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

I have no observations to make on these financial statements.

John Bourn Comptroller and Auditor General National Audit Office 157–197 Buckingham Palace Road Victoria London SW1W 9SP 23 July 1999

59

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

.

Printed in the UK for The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office Dd5068955 8/99 076368 Job No. J0089353

60

ON S

A n n u a l R e p o r t & A c c o u n t s 19 9 8 – 9 9

Published by The Stationery Office Limited and available from: The Publications Centre (Mail, telephone and fax orders only) PO Box 276, London SW8 5DT General enquiries 0870 600 55 22 Order through the Parliamentary Hotline Lo-Call 0345 02 34 74 Fax orders 0171 873 8200 The Stationery Office Bookshops 123 Kingsway, London WC2B 6PQ 0171 242 6393 Fax 0171 242 6394 68-69 Bull Street, Birmingham B4 6AD 0121 236 9696 Fax 0121 236 9699 33 Wine Street, Bristol BS1 2BQ 0117 9264306 Fax 0117 9294515 9-21 Princess Street, Manchester M60 8AS 0161 834 7201 Fax 0161 833 0634 16 Arthur Street, Belfast BT1 4GD 01232 238451 Fax 01232 235401 The Stationery Office Oriel Bookshop 18-19 High Street, Cardiff CF1 2BZ 01222 395548 Fax 01222 384347 71 Lothian Road, Edinburgh EH3 9AZ 0870 606 55 66 Fax 0870 606 55 88 The Parliamentary Bookshop 12 Bridge Street, Parliament Square London SW1A 2JX Telephone orders 0171 219 3890 General enquiries 0171 219 3890 Fax orders 0171 219 3866 Accredited Agents (see Yellow Pages) and through good booksellers