Researchers have highlighted significant flaws and limitations in a key survey conducted by the UK’s statistics agency on local employment levels, which they believe could hinder councils’ ability to predict future infrastructure needs. The Office for National Statistics’ (ONS) annual Business Register and Employment Survey (BRES) has been criticized by analysts from Cambridge University for providing “volatile” results that often underestimate business activity, particularly in advanced sectors.
Described by the government as the “official source of employee and employment estimates by detailed geography and industry,” the survey’s issues are likely to amplify ongoing concerns about the quality of ONS data. This scrutiny occurs as the agency prepares for official reviews of its figures and has faced growing criticism from politicians and the Bank of England following significant data failures in the labor market in late 2023.
Recently, the ONS postponed the release of key trade data, halted publication of two price indices used in GDP calculations, and was criticized by the Institute for Fiscal Studies for “jumbled economic reasoning” in its reevaluation of pension wealth.
The concerns regarding the BRES were raised through research conducted by Cambridge University’s Centre for Business Research for Cambridge Ahead, an advocacy group comprising the university, tech companies, and developers. The study discovered that the annual BRES survey, which collects responses from 85,000 businesses across Great Britain, regularly underestimated employment levels in Cambridge when compared with firm-level data from corporate databases. From 2019 to 2022, while the ONS survey registered a 3.8% rise in IT sector employment, data from the Centre for Business and Research indicated an 8.3% increase.
Andy Cosh, a senior research associate at CBR, identified several issues with the ONS survey, including shrinking sample sizes due to cost-cutting and a failure to check for outlying results. He also pointed out limitations posed by the outdated standard industrial classification (SIC), a necessity for international comparisons but a poor reflection of modern industry, as it was last updated in 2007. Cosh expressed confidence in the centre’s research accuracy compared to the ONS, noting that the CBR had communicated concerns to the agency in December 2023 after discussions that started five years earlier.
The ONS states that BRES figures are “widely used” by local government planning departments to forecast employment trends in specific areas. Dan Thorp, chief executive of Cambridge Ahead, warned that the government’s growth objectives could be jeopardized by inaccuracies in the official data crucial for councils and infrastructure providers in planning. He mentioned that the ONS consistently underreports local employment observed in Cambridge, as demonstrated by the underestimated demand in recent infrastructure projects such as the Cambridge North railway station and the Cambridgeshire Guided Busway.
Cambridgeshire local government officials admitted that while BRES data was used for these projects, separate research was commissioned for the county’s emerging Joint Local Plan due to shortcomings in the ONS data in accurately reflecting regional growth.
The ONS responded with a statement asserting that the BRES survey provides a “good-quality snapshot” of local employment by industry and geography, while also acknowledging its limitations. The agency stated that the quality of sample estimates might worsen for smaller geographies and should be considered when interpreting the figures. Additionally, the ONS mentioned ongoing work to update the SIC in compliance with international standards to ensure UK data comparability.