Thank you for allowing me the time to access some caffeine, convener. I also thank the committee for the opportunity to contribute to its inquiry into economic data for Scotland.
The need for robust and timely economic statistics for Scotland is well recognised, not least by the committee’s inquiry. Sound economic statistics are an essential source of information for policy makers, researchers and the wider public. Given the impact of Brexit, the establishment of the Scottish Fiscal Commission and the new powers being devolved to the Scottish Parliament, the need for comprehensive statistics has never been greater.
It is also important to be clear on my role as cabinet secretary, with regard to Scottish economic statistics. Economic statistics in the Scottish Government are produced independently of the Scottish ministers, which is a similar approach to that taken by other devolved nations and the United Kingdom Government. That means that any issues relating to methodology, estimation or production are entirely and properly the responsibility of Scottish Government statisticians. Any issues of that nature are the sole preserve of the chief statistician. That important separation of responsibilities is rigorously maintained.
I am a key user of economic statistics, which are vital for informing our economic policy, monitoring progress and evaluating our interventions. I have also raised issues about their scope, robustness, coverage and timeliness. Members will know that I have talked openly about that.
It is important to emphasise the improvements that have been made to Scotland’s economic statistics over recent years, many of which have been mentioned in the evidence received by the committee. First, the economic statistics published for Scotland are more comprehensive and timely than for any other part of the UK and for many other devolved Governments internationally. They continue to expand. In the last year, new publications have been introduced covering quarterly productivity and consumer sentiment. In December we will release the first statistics publication in a series on the new devolved Scottish employability services.
Secondly, we allocate considerable resources to producing the statistics. There are 27 professional statisticians in the office of the chief economic adviser, producing a range of key economic indicators. They are complemented by dozens of statisticians elsewhere in government who produce key social, financial and economic statistics. In total we have more than 200 statisticians operating across government, which is a third more than five years ago.
Thirdly, all our publications are official statistics and most are classified as national statistics. That means that they have been independently assessed by the UK Statistics Authority and found to be produced to high standards, well presented and produced completely independently by Scottish Government statisticians.
Fourthly, we have strong user consultation arrangements in place. Statistical developments are agreed in advance with a range of expert users, and the minutes of those discussions are publicly available. The Scottish Government also publishes an annual economic statistics plan, which sets out the work for the year ahead.
We can be positive about those developments, but we cannot be complacent. We know that challenges remain, not least in terms of gaps in the statistics that are available. Many of those challenges have been highlighted over the course of this committee’s inquiry—for example, the need for better trade figures, which I have previously highlighted and will return to subsequently.
Economic statistics are only as good as the raw data that informs them. Ours are derived from a wide range of data sources. The Scottish Government conducts its own surveys, engages directly with major businesses in Scotland and receives highly detailed company-level data direct from the Office for National Statistics. We also fund ONS to boost Scottish samples in its surveys in order to ensure that we have more robust estimates for key economic and fiscal data, such as that relating to the labour market and Scottish VAT.
We know that more needs to be done to enhance the economic data that are available for Scotland. In particular, we need to make better use of the administrative data that are held by Her Majesty’s Revenue and Customs. Payroll information, VAT returns and customs declarations all provide important information on Scotland’s economy that could inform our economic data.
Scottish Government statisticians are in discussion with HMRC officials concerning trade data and with ONS statisticians about VAT turnover data. It is important that those discussions yield tangible results, so I have been taking an active interest in ensuring that they reach a successful outcome. There should be no barriers to the effective and professional sharing of data or information between appropriate Government officials. I have to say that that is not currently the case with reported Brexit impact studies.
There are also gaps in the statistics that are published for Scotland that need to addressed. As I highlighted earlier, there is a need for further improvements in the trade data that are available for Scotland, which is all the more pressing, given the need to understand the impact that Brexit and any subsequent trade agreements will have on Scotland’s economy.
Better understanding of the links between the North Sea and Scotland’s on-shore economy are also a priority. North Sea oil and gas is a key element of Scotland’s trade that current economic statistics do not fully capture. Moreover, the North Sea supply chain is an important element of the wider Scottish economy, so better capturing those links will help us to fully understand the different elements of the Scottish economy.
Finally, I believe that we should look at how the timeliness of key economic statistics, such as gross domestic product, can be improved and how our existing data can be disaggregated to allow a sub-Scotland analysis.
I will say a brief word on the south of Scotland enterprise agency. As the committee knows, we are establishing such an agency, which was a key recommendation of the enterprise and skills review and we will introduce legislation next year to establish that new body. With parliamentary approval, that will ensure that it is up and running by the beginning of financial year 2020.
We want to ensure, of course, that the area benefits from a fresh approach before then, so we will establish an economic partnership to drive inclusive growth across the area. That partnership will seek to maximise the impact of current efforts and also adopt different ways of doing so. Establishing the partnership will help prepare the way for the new agency.
I am pleased to inform the committee that I am appointing Professor Russel Griggs OBE to chair the partnership. As he has a long-standing commitment to the south of Scotland, I am delighted that the partnership will benefit from Professor Griggs’s wealth of experience. To work alongside him and co-ordinate the day-to-day work of the partnership, I am appointing Rob Dickson, who is currently executive director of Scottish Borders Council. Mr Dickson will take up that interim role on secondment to the Scottish Government.
Those appointments underline our long-term commitment to the south of Scotland and build on our investments in the area, not least of which is the Borders railway. We are taking clear action to support inclusive growth in an area that has traditionally lagged behind other parts of Scotland. As we move forward, including in discussions on the borderlands inclusive growth deal, we will ensure that we work together to benefit the area. Arrangements for the other members of the interim economic partnership will be confirmed shortly and the committee will be kept informed of progress.
The work of the agency and of the interim economic partnership will need to be underpinned by good local data and information related to the performance of the wider region, as will the work for other parts of Scotland and for policies related to city and city region economic partnerships. We have to ensure that we will have data and tools available at sub-national level to understand the underlying drivers of inclusive growth, as well as to evaluate interventions and to monitor successful outcomes that go beyond the narrow measures of economic success. Scottish Government officials have been piloting inclusive growth frameworks and data sets with local authorities and academic partners across Scotland and developing wider toolkits. I am pleased to announce that we are creating a centre for regional inclusive growth that will provide a platform to share local and national data analysis and evaluations with partners and that will help to support our policy initiatives on regional partnerships, city deals and city region deals.
Committee members will be aware that, as part of the enterprise and skills review, we have created a strategic board that Nora Senior has agreed to chair. We have also announced the creation of an analytical unit to support the board and to improve the use of data across the enterprise and skills system—that is particularly relevant to the committee’s work. The analytical unit and the centre for regional inclusive growth will enhance the provision, understanding and analysis of data at a sub-Scotland level.
To go beyond GDP, the final issue that I will touch on is the Scottish Government’s national performance framework. That is our statement of ambition for Scotland, and it sets measures to help us to know whether we are moving towards that goal. There is a basket of 66 indicators in the NPF: they measure environmental factors, such as greenhouse gases and natural capital; social measures, such as healthy life expectancy and crime; and economic progress. Through our Scotland performs website, our progress is transparent and independently assessed. When new data are released, they are added to the Scotland performs website and the chief statistician decides whether progress is improving. That framework has gained international recognition. For example, the Carnegie UK Trust did a study of wellbeing measurement and said:
“We did not expect to find international innovation on our doorstep. But our work has repeatedly found that the Scottish National Performance Framework is an international leader in wellbeing measurement.”
The framework is being reviewed, which will involve consultation over the coming months on a new set of indicators, and it will, of course, be subject to parliamentary scrutiny. That gives us the opportunity to crack measuring the elements of inclusive growth, such as the quality of work.
I welcome the committee’s review and look forward to reporting to the Parliament on this and other developments in due course, as well as on the progress that we are making to develop the range and quality of the economic statistics that are available for Scotland.