Download Open - The Scottish Government

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The Atkinson Review in Scotland
- progress to date.
Sandy Stewart
Office of Chief
Economic Adviser
22 August 2007
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Outline of Presentation
Recap on history
Public Sector contribution to GDP
Progress to date/proposed changes to GDP
What to expect in October
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Atkinson Review - History
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2003 - No 10 !
Tony Atkinson – 1 Year’s commission
Interim Report – July 2004
Final Report – January 2005
54 recommendations to improve the measurement of
public services output and productivity
Implementation Strategy for Scotland – April 05
Action Plans – updated quarterly
Working teams set up in Scottish Executive.
Established strong(ish) links with ONS UKCeMGA.
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Atkinson: summary of key
principles
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Principle A: the measurement of government non-market output should aim to
follow a procedure parallel to that adopted for market output.
Principle B: the output of the government sector should in principle be
measured in a way that is adjusted for quality of the service delivered.
Principle C: account should be taken of the complementarity between
public and private output – e.g. NHS output increasing private sector
productivity.
Principle E: measures should cover the whole of the United Kingdom; and
reflect regional variation in the delivery of public services and/or data
collection.
Principle F: the measurement of inputs should be as comprehensive as
possible, and in particular should include capital services – e.g. imputed rent
for buildings
Principle G: Pay and price deflators should be sufficiently disaggregated to
take account of changes in the mix of inputs; and should reflect full and actual
costs.
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Historical context
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Atkinson is not new
Previous assumption of outputs=inputs
System of National Accounts 1993
European System of National Accounts 1995
Eurostat price and volume handbook (2001)
 A methods: multiple direct measures of output, quality adjusted
 B methods: Output indicator, not quality adjusted; or multiple
quality adjusted input measures for collective services
 C methods: Use of single input volume indicators (e.g.
employment)
 OECD productivity manual (2001)
 ONS response to ESA95
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Actions
 Supply data to ONS for UK National
Accounts.
 Replicate productivity analysis for Scotland.
 Ensure UK assumptions make sense for
Scotland.
 Consider inclusion in Scottish GDP system.
 Consider policy relevance of new measures
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GDP – weights and series
Sector
Weight (percent)
Number of Series
Agriculture etc
2%
7
Oil & Mining
1%
4
Manufacturing
15%
144
Energy & Water
3%
3
Construction
7%
11
Services
50%
78
Public Services
22%
19
Total
100%
266
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Atkinson Recommendations
Input (proxy)
Poor
Total Inputs - deflated
Better
Output (proxy)
Even Better
Total quality-adjusted
Output - deflated
Good!
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The October Deadline
 New economic target makes Scotland/UK comparability
ESSENTIAL!
 Opportunity to introduce more cost weights – constrained
to Regional GVA
 Will introduce as many new measures as possible into
GDP in October
 Ideally quality-adjusted output
 Happy to implement simple output measures if they are
similar to UK
 May consider revised input-based methods if they are
an improvement over current estimates.
 Improve scope for further incremental improvements.
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Public Administration and Defence
7.2% of Scottish GVA
Current measures
Proposed measures
Civil Servants – numbers employed
FTE employment in Civil Service by grade,
weighted by salary.
Armed Forces – personnel based in Scotland.
Total persons employed in defence in UK,
adjusted by population share.
Number of administrative and clerical staff in
NHS
FTE employment by grade, weighted by salary.
FTE employees in Local Government
FTE employment by grade, weighted by salary.
Scottish LA Police and related services numbers
Deflated expenditure on police services; direct
measures of output for probation, courts and
prisons systems.
LA FTE employment on Fire Services
Direct output measures – numbers of fires
attended, weighted cost by type; hours spent on
fire prevention activities; RTAs.
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Education
6.5% of Scottish GVA
Current measures
Proposed measures
Primary school teachers/
Secondary school teachers
Direct measure of output: number of pupils,
adjusted by attendance and quality adjustment for
changes in attainment.
New measures: special education, teacher training
and nursery education.
HE/FE teachers
Number of students initially, but will consider a
direct measure of attainment in future
LA – other education employees
To be determined – may be subsumed within
primary/secondary
University lecturers.
Number of students.
Number of grant-aided and independent teachers
Number of students.
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Health
6.2% of Scottish GVA
Current measures
Proposed measures
Health: Employees in Employment: NHS
To be determined. Possible change to
deflated expenditure whilst a direct
measure of quality adjusted output is
finalised.
GPs
Ditto.
Dentists
Ditto.
Private and other Health
No change.
Veterinary practices
No change.
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Social protection
6.2% of Scottish GVA
Current measures
Proposed measures
FTE Employees in LA Social Work
Actiivities
New direct measures of output for adult
and children’s services; number of bednights in residential care, number of
hours in day care and domiciliary care,
number of referrals etc.
Non-LA employees in Social Work
activities
Ditto.
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Conclusions
 Significant methodological improvements to be introduced
in October
 Greater transparency
 Improved coherence with UK methods
 Greater scope for future improvements
 Too early to gauge full impact