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A key survey on local employment levels run by the beleaguered UK statistics agency has significant flaws and limitations, researchers have warned, hitting councils’ ability to predict future infrastructure needs.
The Office for National Statistics’ annual Business Register and Employment Survey gave “volatile” results that often significantly underestimated business activity, particularly in cutting-edge sectors, according to analysts at Cambridge university.
The verdict on the survey — which the government describes as the “official source of employee and employment estimates by detailed geography and industry” — will add to questions about the quality of ONS data.
The agency, which is braced for official reviews into its figures next month, has faced growing criticism from politicians and the Bank of England sparked by the high-profile failure of crucial labour market data in late 2023.
In the past two weeks, the ONS has postponed key trade data, suspended publication of two price indices that help calculate GDP, and been criticised by the Institute for Fiscal Studies think-tank for “jumbled economic reasoning” in the way it revalued pension wealth.
The questions over the BRES survey were raised in analysis done by Cambridge university’s Centre for Business Research for Cambridge Ahead, a local advocacy group for city expansion that comprises the university, big tech companies and developers.
The research found that the annual BRES survey, which is based on responses from 85,000 businesses across Great Britain, consistently underestimated actual levels of employment in Cambridge when checked against firm-level data drawn from corporate databases.
Between 2019 and 2022, the ONS survey recorded a 3.8 per cent rise in employment in the IT sector, but data from the Centre for Business and Research found an increase of 8.3 per cent.
Andy Cosh, senior research associate at CBR, said several factors had led to issues with the ONS survey, including shrinking sample sizes because of cost-cutting and failure to check outlying results.
He added that the survey was also limited by use of the outdated standard industrial classification (SIC), which is necessary for international comparisons but “a very poor representation of the structure of modern industry”, having last been updated in 2007.
“No data is perfect, but what we’re saying is we think we’re much closer to the truth than you [the ONS] are,” Cosh added, noting that the CBR had written to the agency in December 2023 about survey issues following discussions that began five years earlier.
According to the ONS, the BRES figures “are widely used” by local government planning departments “to forecast trends in employment in their specific areas”.
Dan Thorp, chief executive of Cambridge Ahead, said the government’s growth mission “risked being undermined” by flaws in official data used by councils, infrastructure providers and regulators for planning purposes.
“We see it first hand in Cambridge, where local employment measured by the ONS consistently under-reports what is seen and measured on the ground,” he added.
Thorp cited two recent infrastructure projects — the Cambridge North railway station and the Cambridgeshire Guided Busway — that both experienced far greater demand than was planned for soon after opening.
Local government officials in Cambridgeshire said that while planners used BRES data for both projects, they had commissioned separate research when drawing up the county’s current emerging Joint Local Plan because of ONS “shortcomings” in reflecting “actual observed growth” in the region.
The ONS said in a statement that the BRES survey provided “a good-quality snapshot” of local employment, broken down by industry and geography, but insisted that it was also clear about the survey’s limitations with users.
“As we note very clearly in our bulletin the quality of the sample estimates may deteriorate for smaller geographies, and this should be taken into account when making inferences about the figures,” the agency said.
The ONS added that it was working to revise the SIC in line with international requirements in order to ensure the comparability of UK data with that of other countries.
Data visualisation by Clara Murray
