 Good morning, and welcome to the 29th meeting of the Economy, Jobs and Fair Work Committee. This morning, I would ask everyone to turn off electrical devices that might interfere with proceedings. We've received apologies from Gil Paterson and Gordon MacDonald, although I think Alec Neill, who's running slightly late, will be coming to substitute for him. Also, committee member Jamie Halcro Johnston will be joining us as well shortly. Our first item on the agenda is a decision-take item 3 and 4 in private, as the committee agreed. This morning, we are working on concluding our economic data inquiry, and I'd like to welcome Keith Brown, who is the Cabinet Secretary for Economy, Jobs and Fair Work. With him we have Roger Halliday, chief statistician and head of performance at the Scottish Government. I'd like to thank Michael Esby, chief economist and Sandy Stewart, senior statistician. I'd welcome all of you this morning, and I understand that the cabinet secretary has an opening statement. Thank you very much, convener, and thanks for allowing me the time to access some caffeine. I also have the opportunity to contribute to your inquiry into economic data for Scotland. The need for robust and timely economic stats for Scotland is well recognised, not least by the inquiry that the committee has undertaken. However, sound economic statistics are an essential source of information, obviously, for policy makers, researchers and the wider public. With 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 stats has never been greater. It's 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 ministers, which is similar to other devolved nations and the UK Government. That means that any issues relating to methodology, estimation or production are entirely and quite correctly the responsibility of Scottish Government statisticians. Any issues on this nature are the sole preserve of the chief statistician. This is an important separation of responsibilities which is rigorously maintained. Obviously, I am a key user of economic statistics. They are vital to informing our economic policy for monitoring progress and for evaluating our interventions. I have also raised issues about their scope, robustness, coverage and timeliness and members will perhaps be aware that I have talked openly in this regard. It is important rather to emphasise the improvements that have been made to Scotland's economic statistics over recent years, many of which have been mentioned, I know, in the evidence received by the committee. First, the economic statistics published for Scotland are more comprehensive and more timely than for any other part of the UK and for many other devolved Governments internationally, and they continue to expand. In the last year alone, new publications have been introduced covering quarterly productivity, consumer sentiment and, in December, we will release the first statistics publication in a series on the news devolved Scottish employability services. Secondly, we allocate considerable resources to producing these statistics. There are 27 professional statisticians in OSHA, producing a range of key economic indicators, and they are also complemented by dozens of statisticians elsewhere in Government, producing key social, financial and economic statistics. In total, we have over 200 statisticians operating across Government, and that is a third more than five years ago. Thirdly, all our publications are official stats 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. In fourthly, we have strong user consultation arrangements in place. Statistical developments are agreed in advance by 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 until we know that challenges remain, not least in terms of gaps in the statistics that are available. Many of those have been highlighted over the course of your committee's inquiry. For example, issues such as better trade figures, which I have previously highlighted and will return to subsequently. Economic statistics are only as good as the raw data, which informs them and 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 their surveys to ensure that we have more robust estimates for key economic and fiscal data, such as Labour market and Scottish VAT. We know that more needs to be done to enhance the economic data available for Scotland, and in particular we need to make better use of the administrative data that is held by HMRC. Parall information, VAT returns and customs declarations all provide important information on Scotland's economy, which could inform our economic data. Scottish Government statisticians are currently 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 will be 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 because we have reported Brexit impact studies. There are also gaps in the stats published for Scotland, which need to be addressed. As I highlighted earlier, there is a need for further improvements of the trade data available for Scotland. This 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. I am also better understanding the links between the North Sea and Scotland's onshore economy are also a priority. North Sea oil and gas is a key element of Scotland's trade, so the important economic stats do not fully capture. Moreover, the North supply chain is an important element of the wider Scottish economy, so better capturing those links will help us 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 GDP can be improved and how existing data can be disaggregated to allow a sub-Scotland analysis. A brief word, if I could convener, on the South of Scotland agency. We, as you know, are establishing a new enterprise agency for the South of Scotland. That was a key recommendation of the Enterprise and Skills Review, and we will bring forward legislation next year to establish the new body. With parliamentary approval, that will ensure that the body is up and running by the beginning of financial year 2020. We want to ensure, of course, that the area covered benefits from our fresh approach before then, and we will establish an economic partnership with inclusive growth across the area. That will seek to maximise the impact of current efforts but also adopt different ways of doing that. Things will help, rather with the idea of preparing the way for the new agency by establishing that partnership. I am pleased to inform the committee that I am appointing Professor Russell Griggs OBE to chair the partnership. With a long-standing commitment to the South of Scotland, I am delighted that the partnership will benefit from Professor Griggs' wealth of experience. I work alongside him to co-ordinate the day-to-day work of the partnership. I am appointing Rob Dixon, who is currently Executive Director at the Scottish Borders Council. Mr Dixon will take up this interim role on succumbent to the Scottish Government. Those appointments underline our long-term commitment to the South of Scotland, which builds on our investment in the area, not least the Borders railway. We are taking clear action to support inclusive growth in an area that is traditionally lagged behind other parts of Scotland. On board, including discussions about the borderlands inclusive growth deal, we will ensure that we are working 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. Of course, the work of the agency and of the interim economic partnership needs to be underpinned by good local data and information relating to the performance of this wider region. That is the same for other parts of Scotland and also for policies relating to city region economic partnerships. We have to ensure that we have the data and the tools available at the subnational level to understand the underlying drivers of inclusive growth, as well as to evaluate the interventions and to monitor successful outcomes that go beyond the narrow measures of economic success. Scottish Government officials have been active in both piloting inclusive growth frameworks and data sets with local authorities, as well as academic partners across Scotland and developing wider toolkits. I am pleased to announce today that we are creating a centre for regional inclusive growth, which will provide a platform to share local and national data analysis and evaluations with partners and also help to support our policy initiatives on regional partnerships, city deals and city region deals. The committee will also be aware that, as part of the enterprise and skills review that we have created at strategic board, which Nora Senior has agreed to chair, we also announced the creation of an analytical unit that is very relevant to the work that the committee has undertaken to support that board and improve the use of data across the enterprise and skills system. The analytical unit and the centre for regional inclusive growth will enhance the provision of understanding analysis of data at a sub-Scotland level. Finally, to go beyond GDP, convener, the final issue that I want to touch on is the Scottish Government's national performance framework. This is our statement of ambition for Scotland and it sets measures to help us to know whether we are moving towards that goal. That is a basket of 66 indicators in the NPF and it does that by measuring environmental factors like greenhouse gases and natural capital, social measures like healthy life expectancy and crime as well as economic progress. Through our Scotland performs website, our progress is transparent and independently assessed. Whenever new data are released, they are added to the Scotland performs website with the chief statistician deciding whether progress is improving. That framework has gained international recognition. For example, the Carnegie Trust did a study of wellbeing measurement and said that 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 currently being reviewed. That involves consultation on a new set of indicators over the coming months and of course will be subject to parliamentary scrutiny. This gives the opportunity for us to crack measuring the elements of inclusive growth such as quality of work. I welcome the committee's review. I look forward to reporting back to Parliament on this and other developments in due course and on the progress that we are making to develop the range and quality of economic statistics available for Scotland. Thank you, convener. Thank you, cabinet secretary, for that. No doubt you will be willing to take questions during the questioning on the announcements that you made. If committee members wish to put these to use. Turning back to the economic data inquiry, we will start off with some questions from deputy convener John Mason. Thanks, convener. You obviously covered quite a lot, cabinet secretary, in your statement. I was just going to ask, so I'll ask a little bit further about where you see the kind of gaps that are in the present set up because we have had, as you said in your statement, witnesses basically saying that we've gone a lot, we're better than other areas, but there are still a kind of gaps. I mean, if I heard you correctly, you said that trade figures, VAT and Brexit impact would be three areas that you felt there were currently gaps. Is there other areas that you feel are important at the moment? Those would be the main ones. If you take, for example, trade figures, the current basis of those is through a survey. We don't, as is the case with Northern Ireland, which I think the committee has heard about, have the ability to oblige companies to respond in relation to those. So that can provide a low rate of response sometimes. It's also true, of course, that we're dealing with economic units which will be spread very often across the UK, and trying to get sub-UK level information can be an issue for us as well. So that is a major area of concern. In relation to Brexit, I mentioned the economic impact assessments. Whether it's the current position of the UK Government that these exist or don't exist, to be honest, I watched a debate on that in the House of Commons. There does seem to be information which the UK Government concedes that it holds, which could be very useful to the Scottish Government, and that would help fill another gap. We have, of course, done work in terms of Brexit, but to have that information specifically as it relates to Scotland and also to the sectors that are very important to the Scottish economy would be useful. That raises another issue, which is depending on how Brexit plays out, we might find there are other gaps that we need to fill in a post-Brexit scenario. I think that we have to be alive to the fact that we want to continue to improve and we have done. I think that the Scottish statistics are extremely well regarded both across the UK and internationally, but I think that we always have to look for where there are gaps, where we can have a better understanding. We don't, for example, have a measure of the primary report that some countries have, so we would look at that as well. I do think that much of this issue in terms of trying to close these gaps or fill the gaps will be something that, of course, the Scottish Government will be involved in, but which the analytical unit attached to the strategic board will be very heavily involved in. If it is to be their role, as it is, to push Scotland forward to the top quartile of economic performance, then they will be able to seek from that unit exactly the data that they require in order to support their decisions. Of course, the Government will have access to that as well, but that, to me, is extremely important. I think that we are in a good position just now. We have acknowledged that there are gaps and also there are improvements that we can make. It is now our job to try and do that, but we are doing that in partnership with the analytical unit that will be established in relation to the strategic board. That is helpful. Thanks very much. A number of the things, we will go into more detail on things like that, but that is an example of can the Scottish Government do any more even with more statisticians, more money, more whatever, or are you really totally dependent on external bodies in that case that would be HMRC? I think that in relation to that, another one would be, for example, the apprenticeship levy. We have no information on that. We are entirely dependent on the UK Government, but we have no way of crush-checking that other than through HMRC in terms of how much is actually raised in Scotland through the apprenticeship levy. There is just now, and it might be useful to hear from others, there is in certain areas, like VAT and apprenticeship levy or real reliance on HMRC. The new digital act that is coming should help us with that, not least as I have mentioned in relation to the apprenticeship levy, that kind of safe space is being created between statisticians at the UK level and at the Scottish level, being able to share that and being obliged to share that kind of information, and that should help matters, but just now I think there is no question that we do have a substantial reliance on the UK, I don't know if Gary or Roger want to come in on that. If I can just maybe give a little bit wider context to our economic statistics and then maybe Sandy could come in in the VAT work and assignment, that might help with the context. It's worth reflecting, I think, from the evidence most witnesses said Scotland was well served, but actually there remains gaps, trade imports, national accounts, things could be better, but it's worth probably reflecting on, Scotland's been well served from the 1970s, from the creation of input-output tables, which provide an economic data snapshot of the economy through the 90s for them being produced more frequently. If you go into 2002, the Scottish Parliament was formed, we had quarterly GDP was started, also the first global connection survey, if you move forward into 2008, the national accounts project, which is currently still in our plans, we publish economic statistics which outlie both the weaknesses and what users tell us where they would like to see the focus. I suppose I'm answering the question, there will always be gaps because the economy evolves when I started working as an academic, most of our focus was on manufacturing, we had annual sensors of production data, now we're largely a service sector economy and we're having to pick up new digital transactions, digital issues, so I suppose what I'm saying is we'll be here in 10 years' time and there will be new gaps and that's appropriate, and actually the challenge is how you can keep moving things on, but maybe Sandy could say a little bit about our key areas of development and the VAT assignment. I think generally speaking, the main weaknesses in what we do is due to lack of Scottish specific data, so information from large companies, for example, which are multi-sided across the UK, figures from them like Turnover and capital expenditure business investment tends to be a portion to regions by employment, so that gives us a bit of a problem for large companies. More specifically, we have problems with prices, there's no specific Scottish level consumer prices or producer prices, so it's very hard to know whether the figures that are for the UK which we use for Scotland are suitable. There may be effects like a London effect, there may be effects like rural and remote effects, so we don't know quite whether the prices are adequate and on the labour market side there are only annual earnings figures from the Ash Survey, so ideally a gap would be to have more regular earnings data which would then feed into our GDP estimates and also modelling work. We are looking and working with HMRC and O&S Office for Ash Statistics to try and get data on things like VAT Turnover. Figures produced by HMRC will help us fill in some gaps in the GDP side, so rather than boosting surveys that we do at the moment, which are expensive, we can use this admin data to fill in more information for smaller companies that can have a much wider sample. Can you just mention an evaluation of the CPI data that was mentioned? That's quite an important one because we know that unit costs for example Network Rail are an organisation that I've dealt with in previous roles. They have rising unit costs far greater in south and south-east of England than they will be in Scotland. That's why having a more accurate estimation of what inflation is in Scotland would be quite useful. It may well be that the strategic board will seek to get more information on that. You could see how that's one of the crucial figures if you think about the relationship of inflation to wage constraints that are there just now and spending power. It's a crucial economic tool that blunts in that it covers the whole of the UK and doesn't see the variations that will exist across the UK. That's very helpful, thank you. Andy Wightman We've heard that economic data for Scotland is good compared to other regions of the UK but there's still gaps, particularly in light of the fact that we have substantial devolved powers and now greater fiscal powers. We've heard that there's a good relationship generally speaking between the Scottish Government and O&S at an official level and a political level as well. I'm just wondering if some of the data that we capture that is extra to what's captured by O&S which we pay for to boost surveys, etc. It appears to be a little bit ad hoc. That's the nature of the game. I'm just wondering if that could be incorporated into a more coherent agreed framework so that O&S have a looking forward say, five years, having agreed framework about what they do as a UK Statistics Authority on behalf of Scotland. I think it would be useful to hear the response of officials to that as well but you do have a point. For example, in relation to the labour market survey we do pay for a boost to the survey that's done there. There is a question over how much more you pay, how many more people you survey. I suppose there's a question mark on the best way to collect that data in the first place as well. As I mentioned, in Northern Ireland it can be done by other means. I suppose the larger the sample, I think as politicians, well I know the larger the sample, it tends to be the more accurate the information you'll get although as with election polls there's an optimum, just around a thousand people if you can get all the different variables in that that gives you a very accurate picture. So there is that trade-off between doing ever more extensive boosts to surveys which might give you more accurate data and spending the money on doing that. I think your point about how they've grown up over time and has it been in a consistent way and if you looked at it across the landscape of stats are those the best ones for us to be spending money on is a reasonable question and to be interested also in the, again these are independent of ministers so it would be interesting to hear the views of officials on that as well. To start up with that, first of all I think the committees we've shared our economic statistics plan going forward and that an important contributor and collaborator with us is the ONS in doing that that the what we have across the UK is a devolved economic statistics group which brings together statisticians from the ONS from Wales from Northern Ireland and Scotland to sort of work out how we can move together and develop new statistics in particular that is through the development of the Digital Economy Act that mentioned so if we are having this conversation last year the HMRC in particular would be in a position where not only was sharing difficult it was legally impossible for them to do so and we're now in quite a different place that we worked on whether the details of that Digital Economy Act in a sort of very collaborative way with ONS and other devolved administrations to make sure that it would work not only for them but for each of the devolved administrations and now we're working with the ONS to add the HMRC to make that to get the best value from that so I think for me it's not necessarily about buying new data it's the challenge for us is how we make the most of yes HMRC data and ONS data that already exists but also new different kinds of commercial data as well and that will require our statisticians to work with statistical methods people at ONS at HMRC and in academia as well so I would sort of challenge the question a little bit and I think we've got but we've got a lot more work to do to understand how we get the value from the data that we can now get from HMRC Can I come in as well please just to Mr Wightman's point about ONS we do have a formal agreement with them we sign every year in which we enter into a financial contract to pay for boost to the labour market and other related surveys now we decide on those surveys based on feedback from users and where we think there's the most gaps the labour market as Mr Brown's touched on is obviously one that's featured monthly and one which gets a lot of scrutiny we boost that sample roughly from about 4,500 to over 20,000 households again there's still bigger statistical error than the UK but that's an example of one area but I think as Roger's saying actually the trend now is to move away from surveying better use of administrative data digital data and really this is where the big opportunities can lie with the digital economy act and getting access to data which through legislative restrictions we've not been able to access in the past Okay that's useful I mean I'm wondering if the what just to say that we are heavily involved with working with ONS we have a very good working relationship with them Roger here sits on the Interadministration Committee to decide the big picture things I sit on the devolved economic statistics committee where we scrutinise progress that's made in UK economic statistics and we look at developments in surveys developments in admin data and we have a seat at that table so we kind of ensure that there's a devolved argument when they develop the UK statistics so we have that very good relationship and as Gary says we have a service level agreement which is refreshed each year with new data items so we have that very good working relationship Okay I think I'll leave it there Thank you Richard Leonard Yeah I just wanted to probe a couple of areas first of all you've spoken about the case for a Scottish consumer price index or some kind of price index inflation figure do you have an expectation of whether that will be higher than or lower than the current UK figure It's a very good question I think from the response I gave earlier you can imagine that in relation to unit costs and labour costs not least if you just think about the London waiting allowance or the London living wage you would think intuitively that that would lead to higher unit costs but I've not said that we are ready to go to a Scottish CPI what I have said is some of the gaps in the data that we currently have are those in relation to inflation and I think going back to the previous question that was asked as well obviously my role in government is with the economy and I rely very much on these statistics but if I was to start trying to instruct the statisticians and we need this new data, we need that we need to change that, we don't want that anymore then I will be quite rightly open to substantial political scrutiny I do think the suggestions that this committee has made before and the inquiry you've held we've got substantial notes on that we've been looking at it very closely and listened to some of the suggestions that have been made there and also the analytical unit that I've referred to will be, first of all, will be statisticians not just Scottish Government ones so ones from SDS Scottish Enterprise and so on will be involved and they will take some direction and it doesn't include politicians so that is another way to try and interrogate and further improve and perhaps expand on the stats that we have so I don't know the answer to the question, my intuition would be in relation to inflation that there are inflationary pressures in the south east of England in particular it might not be as prevalent in Scotland I do remember a number of years ago a deputy governor of the bank of England going to the north of England and saying that he was justifying our interest rate increase and that was likely to lead to more unemployment in the north of England and in Scotland and justifying that by saying that that would allow them to bear down on inflation in the south east it was a price worth paying was the phrase that he used so I think that goes to your point about why it might be important to have that distinct information but it's probably better for the statisticians to answer whether it's likely to be higher or lower in Scotland just a brief comment we tend to be very close to the UK aggregate so it's probably going to be quite close to that when you take out London then London tends to dominate the CPI the ONS have done regional CPIs in the past 10, 12 years ago there was an approach to do it if you think about it as a basket of goods to take it across the UK and you could regionalise that to get a better estimate for CPI we use price information in our outputs maybe Sandy wants to talk about the kind of broader GDP deflators we use just on the CPI side there is a feasibility study at the moment on CPIH which includes housing costs which is being carried out by ONS and Southampton University they haven't published their results yet but I think that when that feasibility is published we will have an idea of whether Scotland is higher or lower than the UK as an average but I think Gary is right on the UK if you take out London and the south east what will be interesting is whether there are differences in say remote rural areas as opposed to urban areas which I think would be an interesting bit of additional research in terms of deflators we use very detailed UK deflators in producing real term GDP estimates they are UK figures and again we don't know how good they are for Scotland until that work is carried out but they are weighted in a way that reflects the output of Scottish companies so it is obviously goes a long way towards producing a Scottish specific implied deflator for GDP once you've weighted it out accordingly Thank you, maybe it's just my cynicism but when we moved from the retail price index to the consumer price index it was at a lower level and I just wondered whether a Scottish CPI would be lower still which may be of interest to people negotiating pay settlements for the determination of increases to social security payments and so on but can I move on to something else which you've spoken about Cabinet Secretary already which are the trade statistics and you will know that we've had almost every witness who's come along has questioned just how robust the trade statistics are partly driven by poor survey response through the global connection survey and also this question which has been raised with us before about the extent to which exports to the rest of the UK are then shipped on to other countries but don't count as exports statistics from Scotland I wonder whether you could comment on the Scottish Government's view about how robust these statistics are First of all we've started by saying that as one of the areas that we believe there is a gap and it is exactly at that level that you've described so not least through companies operating throughout the UK how goods are moved between them is one of those areas that is worth considering so I think we've acknowledged already that there is more to be done in terms of trade statistics we've seen a major revision not least through the work done by Scottish Government statisticians to the way that oil which is exported directly from the North Sea rather than coming ashore and then going off-hill we've seen a major revision to that which has substanished the change the export figures for Scotland and I think the thing to do now is to work out how best to fill that gap and obviously the statisticians are working on that and I'll go back to the analytical unit which can do further work on this and again to say that it's not necessarily for me to provide an instruction to the statisticians to say do it this way or do it that way they will carry out their work and it would be useful to hear from them as to what the work is being done and that's the gap just now Global Connections or Export Scotland now has a sample of 5,700 odd companies the response rate is low 27 per cent about 1,500 completed returns but when we add in the data from administrative sources like the Scottish Whiskey Association for rest of the world exports we cover about 80 per cent of the value so in a sense it's supplemented I suppose in a sense is you're intra-regional or intra-UK trade again that was the first time captured through the Global Connections survey and our own survey and it's been a weakness within the UK for a long time about intra-UK trade flows there's a specific question in the export stats survey which asks for the final destination so for instance it doesn't matter what port it's leaving from it's the final destination that's been raised in the past about that as far as the statistics are robust I think there's robustness we've got at the moment but obviously it's an area where we would seek to improve and as we've mentioned already the digital economy act and the use of HMRC data could really help just one other thing on trade statistics is there's different sources of trade statistics both for Scotland which we produce there's also the HMRC statistics which are based on goods and they provide an estimate for Scotland and there's also further development so there is a need to bring those together to have one more fully complete set which uses all of the available data it would be useful to... if it's a committee that's settled you will see what the outcome of the inquiry is that there needs to be more work done in this area that the idea that's done in a cross-party would be very useful so we acknowledge there's a gap there currently the ONS acknowledge there's been a gap in the past as well I've struggled very hard to when I've been asked to try and produce an opportunity arising from Brexit I know we have different views on Brexit but perhaps one opportunity is first of all there seems to be a much broader awareness of the need for international trade and with that the need for a proper data on international trade so perhaps that could fuel further improvement in those figures Jamie Halcro Johnston I've just come back from what you said apologies for being a little late to committee this morning one of the things that's come up a number of times and was mentioned by Highlands and Islands Enterprise was the lack of regional data regional economic statistics I was just wondering what steps are being taken by the Scottish Government to address that shortage I did mention that obviously you wouldn't have heard that earlier on but we have our intention to set up a centre to look at this particular issue and regional data and as you've said High have raised this issue as well there is currently a wide range of local government data especially relating to labour markets and the structure of businesses that's already available and we don't seek to duplicate that but as we set out in our plan over the coming year we are undertaking a programme of work to try and improve the sub-scotland stats such as regional GDP and earnings so there's a working group to deliver that project it meets next week membership includes High a number of local authorities the improvement service Glasgow Centre for population and health and the minutes will be published and a work plan agreed and I think you will also see this area come under increased scrutiny through the work of the strategic board which will have on it as of right a member from High a new south of Scotland partnership and eventually the south of Scotland agency and I think it's inevitable that you will start to see through that forum as well as the work that we are taking forward more scrutiny in this area When would you hope that some of the information from that, the figures from that would start kind of feeding into projections in terms of on your decision making? Perhaps the statisticians could answer in relation to the centre that we're starting up on when that workflow should start to become public strategic board that should meet very shortly for it's first time now it's first order of business will be to agree it's strategic plan but this analytical unit which I've mentioned a number of times will be there and that comprises people that are currently working in this area as well so I don't imagine to be much of a time lag in them getting to grips with that but it will be for in that case the strategic board to ask for that information So Mr Brown mentioned and he's opening remarks the creation of a platform which is the centre for regional inclusive growth and as officials we've been working over the last two years and looking at issues relating to inclusive growth how you measure it across different parts of Scotland and we've done a number of pilots including North Ayrshire, the three Ayrshers we've applied the frameworks in different areas and part of that work and part of the platform is now to provide a forum or a vehicle to actually publish that data high Scottish Enterprise are involved in the work as there are other partners and actually we have reasonable data for local authority level probably with Highlands and Islands it's more remote, it's more community based data that they're looking for but that platform will allow us to provide the tool kits we've developed in relation to inclusive growth the data monitoring frameworks the analysis and evaluation make that more systematically available across Scotland and also with academic partners again potential gaps and commission areas to develop further so I think that's a big step in addressing some of the issues that have been identified by some witnesses so we'll be saying more regional data and more local authority data being used going forward thank you a few things just to say that devolution is very high up on the O&S agenda and they're very keen on doing as much as they can to break things down to lower level geographies for example the regional accounts team there are now producing GVA gross value added and gross disposable household income figures by local authority level and they published that for the first time at the end of last year they're going to publish new figures in December this year at local authority level in both current price and constant price for GVA the local authority might actually slip into next year depending on their timetable but they're at least working on that and those figures will be very useful for say community planning and I think local partnerships will be very keen on using that data they're also actually introducing a flexible geography thing so that you can define your own geographies this will probably take a year or two to develop but it means that if you're interested in very small level geographies or specific areas that aren't well defined you'll be able to do it from that work so I think we'll see some progress in the next year or two on that Gary mentioned the subgroup which is meeting next week that will be looking at local priorities and we'll have a discussion with there'll be a number of local authorities there so we'll set priorities we'll consider the reliability of local data we'll discuss whether there are gaps and whether we can actually do some modelling work to fill those gaps and we'll have a look at what data is collected locally and share good practice and see what information we can learn from each other so it'll be quite a useful group and it's a subgroup of our consultants group that meets once a year Can I just come very quickly on that would you envisage that there would be any extra burden or involvement from local authorities in terms of collection of data or how they what format it's kind of collected in I don't think so no I think it will help to try and harmonise what's collected across local authorities and I think some of that work will feed into the national performance framework agenda where the national targets can be broken down into local targets so we'll try and get people sort of doing things in the same way so hopefully it won't add to the burden OK Alec Neil and then Dean Lockhart Thank you convener I'm sorry I was late but the M8 was a car part this morning again Can I start obviously the discussion so far has been mainly about the collation of statistics and our ability to collect them but it's how we use them and obviously in planning the economy forecasting is a key element in that so can I ask what is the current capability of the Scottish Government in terms of economic forecasting I'm not talking about the work done by the fiscal commission which is very specifically in relation to taxation and spending but economic forecasting and how independent is that and what are your plans for developing that capability I think on the issues of independence it's probably best that the officials answer that question but yes of course economic forecasting is done for the state of the economy report that's produced by the chief economist also we will ask ministers as you know will ask for information in order to take decisions as well but I would go back to the point made previously about the strategic board as well it will want to under some very good brains around that table although we haven't announced all the names yet we've announced the chairperson we'll shortly announce the membership so they will be able to ask those questions as well which I think will provide a sharper focus on economic forecasting and what's currently done it's probably best answered by Gary ok thank you very much Mr Neil we missed my earlier comments about the kind of development of economic statistics and models and I suppose just to put a bit of context prior to 2007 the main model we used within government was the input output tables which provide a framework since then we now have a macroeconomic model which is the national institute of global economic model which we commissioned to an open competition and it's parameterised to Scottish data and that essentially allows us to do macro simulations of Scotland within the UK and linked to that wider global framework we also have now casting we do now casting internally looking at using our most recent data we also have a computable general equilibrium model which we brought in from Strathclyde University and that allows us to do policy simulations for instance the work that was published last week for the Migration Advisory Council on the impact of EU migrants used that model to simulate the impact of migrants coming into the economy so we have a reasonable suite of modelling capacity within the government we also have income tax micro simulation models as well which are built up from data sets so I think at this point in time we are probably as well equipped as we ever have been in terms of macro capacity you asked a question about forecasting the government we produced forecasts last year for 2017-18 for the budget and that was the one and only set of official forecasts that the Scottish Government actually do that role is now going to the Scottish Fiscal Commission and they'll produce the forecast so I report the forecasts of independent forecasters out in the economy and I provide a commentary on what I think the key trends are but just one final comment obviously that the Scottish Fiscal Commission have that role now and obviously we work with them in our capacity as at their disposal also but they'll decide on their own modelling frameworks and assumptions going forward the independence so as with all official statistics in Scotland I've got a role for deciding the format the content and the timing of those statistics in recruiting and developing the excellent statisticians that we've got here so what we've got is a set of guiding principles that's a code of practice for official statistics and you heard from the regulator the UK Statistics Authority here last week that that code of practice isn't just a nice to have it's a legally binding code on all our statisticians that gives me those powers and so an internationally what that means is that the UK is and Scotland within that has seen as an exemplar in practices around independence in the production of official statistics that's why it was seen by the rest of Europe around a code of practice and around the legislation there has now been copied sort of Europe-wide and introduced basically based upon the UK system Pity it wasn't in place when Sir Nicky Macpherson made his statements in the referendum but there we go can I probe a wee bit further in terms of sectoral analysis because very clearly if you take a big industry such as oil and gas or in terms of its presence in Scotland an important but smaller industry like aerospace and clearly there are a range of sectors that are absolutely the backbone in the Scottish economy so how often if you take a sector like oil and gas at one end or say aerospace at the other how regular do you do the forward looking sectoral I'm not talking about the story forward looking sectoral analysis to identify pitfalls areas where we need to strengthen our industrial strategy et cetera routinely with the models we wouldn't run scenarios forward for specific industries but through Scottish Enterprise and the industry leadership groups which bring together the key sectors and those leadership groups they'll discuss oil and gas is a good example to set up in response to the fallen prices in that sector and as part of that we participated in the discussions presented the trends that were impacting the sector and the sector talked about different scenarios for the oil price ranging from $60 to other scenarios and how the sector would have to respond so it tends to be done more through the industry leadership groups in that type of collaboration but again, oil and gas we modelled the impact of changes to oil and gas both on the sector and the wider economy using the sweeter models that we take forward but I suppose your more general point is about how do you pick up trends on the economy and changing trends and I suppose in a sense again we do a little bit of insight work and forward looking we look specifically at the labour markets really insightful for giving changes to the jobs that the economy is producing linked to globalisation technology replacing certain types of skills so we have that type of broader framework which we discussed in Government also in the state of the economy it tends to follow a set format but we try to introduce analysis that we've done through boxes whether it's looking at recent changes in the labour market or a specific sector and share the type of analysis within Government It's in a very important area and I mentioned before you joined us that the UK Government's central analysis if that's what it is and there's still some doubt about that it's extremely important in this area if they've done this work we would like to have access to that we've asked them to do that and the point that you made about the aviation sector so for example one of the big players in the UK and in Scotland has recently told me that they're no longer allowed to bid on EU work because ESA, the European Space Agency has been told by the EU it must only use EU members and not the UK and the further worry is that that work currently done in Scotland and the UK will go from there to France and Germany it's a very live threat so having that intelligence in advance is very important just for the reasons that you say so you can take proactive action to protect jobs and investment but we cannot get this information and you may remember this from your own time in government Mr Neil but there is not a recorded instance as I know it of any conference that the Scottish Government has been involved in with the UK Government of that conference being betrayed and it was one of the reasons why the UK Government or ONS changed the pre-release circumstances because of leakage of market sensitive information there's not one single instance and so the UK Government really has to include the Scottish Government on issues which like you say are fundamental to the economy and give us that information as soon as possible I totally agree although I would think that the EU of a bit of a cheat demanding a hundred billion and then excluding us meantime from contracts that's typical of the EU can I move on to the wider thematic issues like research and development because obviously in the private sector although our public sector R&D has been robust over a long number of years our private sector R&D investment has continued continually fallen below comparable countries or regions either in Europe or elsewhere particularly if you look at what's happening in the likes of Norway or Sweden where about 5% of GDP is spent on R&D and we're about a quarter of that not much more than a quarter of that so two questions number one how robust are the statistics on R&D and secondly what we're doing about closing the performance gap first of all the programme for government which the First Minister announced tries to address that issue first of all by giving a further commitment from government funded R&D in support to businesses to increase their R&D but that's specifically designed to try and leverage out what you quite like to say is much required for businesses R&D and I think perhaps a game was mentioned earlier but this is one of the gaps that we have in our information the ability to quantify exactly we know it's far less than the rest of the UK we know it's less than it should be certainly I challenge businesses all the time to say that it's a well-worn cliche that the UK tends to perform less well than the EU which contributes more in R&D that the EU contributes more in terms of R&D both business and public and the US trails Japan and they have higher R&D so R&D is absolutely crucial to the economy but I think that that's right and they have a substantial fund on which they can draw to support government funded R&D of course so I think it's a very important point but I think we've also acknowledged already that that is a gap in the information that we have I don't know if Gary wants to say more on that just to endorse what you've said essentially so we do run a survey of R&D expenditure covers a sample of businesses we try and make that sample a census so any company that we believe is doing R&D we will try and get their data it's a small number of companies there is a big gap relative to performance elsewhere and it's been an area where we've been actively trying to encourage the sample size so we can get proper returns there is a question about how you define research and development that's been a source of confusion with some companies for fine manufacturing you include some of the services within manufacturing it's based on a definition I think the fricati definition anyway but what definition? it's named after a white wine actually how do you spell it? I'll send you the details all right it's an EU definition and it's done for consistency but it's an area we are targeting and it's an area where the Government are trying to increase the level of R&D expenditure by businesses and economy I think it's fricati and my final very quick question is obviously we have a what I might call an unofficial economy what used to be called disparagingly the black economy and you know there are various estimates of the size of that but from a statistician point of view how important is that in the Scottish economy? I want a sandy well I don't know the exact figures but I know it's something of importance the doesn't tell me anything then well the O&S obviously make adjustments for the UK figures based on the black economy and we would make similar adjustments in our input output tables following the GDP do you reckon it's I'm not sure put the UK estimate for the UK economy I don't know I don't know the figures can we get back to you but there are sort of emerging issues as well things like Uber and breakfast the gig economy these are all big issues that the UK governments are looking into and we will take advice from O&S to how we adjust our figures but I can get back to you with what that estimate is thank you thank you cabinet secretary in your opening statement you mentioned inclusive growth and a number of new initiatives surrounding inclusive growth as you will no doubt be aware a number of our witnesses in the data inquiry have told us that there is there's no recognised economic definition or measurement of inclusive growth it can mean different things to different people and different organisations given it's a central pillar of the Scottish Government's economic strategy can you tell us how the government defines inclusive growth how you measure it and how you monitor inclusive growth I think first of all I would acknowledge it's an emerging area of work we think that we've been leaders stating our objective for inclusive growth and we've been very pleased at the take up in other countries and also the recent conference on inclusive growth I think recognise the lead which Scotland has taken in terms of a definition we would say it's growth that combines increased prosperity with tackling inequality which creates opportunities for all and distributes the dividends of increased prosperity fairly and I think underpinning that things like for example the living wage if we have a situation where the share in prosperity is unequally divided amongst the population and that's what we're trying to address by inclusive growth so that everybody, especially those furthest from the labour market women that are paid less than men people with disabilities that find it very hard to access the labour market they should have a share in the growth that the country enjoys so that's the kind of underpinning part of it but that definition is the one that we work on but I do acknowledge it's an emerging area of work and we have to get further definitions there have been some other definitions which perhaps Gary could or if you like additional elements of that definition which have started to shape exactly what we want to see that we can measure in future as well the other point that you made but that's our definition as things stand I don't know if you want to enter it I suppose just to add that definition which Mr Brown gave you was based on Mr Brown's economic strategy in 2015 the European Commission 2020 strategy have a slightly different definition of high employment economy delivering economic social and territorial cohesion our definition is very close to the WECD and it relates to a lot of the work that the WECD have done around moving towards inclusive growth and actually part of Mr Brown's earlier announcement about the centre for regional inclusive growth is to share some of the underline management frameworks the tool kits, the data we have for instance five different fields which we look at for inclusive growth economic performance and productivity labour market access fair work people in place and we actually have data at local authority level across these different measures and that's part of the tool kits and data which we're trying to share so that people have a better understanding about what it means there isn't one single measure that you could say is inclusive growth because it's multidimensional and it challenges you to look beyond GDP and look at a wider basket of measures so it's more focused on not only the growth part which is important but who benefits from the growth the type of growth and the access and opportunities to which that provides of course the strategic board will have this part of it same as well so I think you'll see more examination of things like to go back to James Halcro Johnston's question about regional disparities that there might be so that if we're finding that one part of Scotland's finding it more difficult to access the labour market difficult to access the benefits of growth then we want to be aware of that also some of the indicators we have the prevalence of zero hours contracts for UK nations in terms of zero hours contract but that can give you against not a straightforward link one between the other but that also the gender pay gap that I mentioned as well the level of qualifications within the economy as well and the proportion of people earning the living wage and just to say on that point our next iteration of the progress of the living wage we've already have 81.6% of people in Scotland paid the living wage we do want to start to see how that plays out in different parts of the country through the next iteration of how we want to measure our progress in the living wage so I suppose those things all together add up to our way of trying to encourage inclusive growth but do you acknowledge there's more work to be done in this area? Thank you just a couple of follow-up points just to clarify based on the definition used by the Scottish Government of inclusive growth has it been measured across the economy and if so inclusive growth been improving in Scotland over the past couple of years? I think by some measures it has so if you take the measure of high employment we have high employment, perhaps the highest employment we've ever had but that's an incomplete picture is the point that I'm making so you can still have substantial under employment within that figure you can still have substantial inequalities between different groups and you can have regional disparities so the indicators that we have I don't think yet are complete enough or definitive picture on inclusive growth and that's why there's more work to be done and as I say part of that work will come through the work of the strategic board whose strategic plan will have at the top inclusive economic growth in addition to that that as Mr Brown said in his opening statement we currently have the national performance framework for Scotland that has a basket of indicators that measure societal environmental and economic economic progress and wellbeing and we're currently reviewing that set and one of the elements of the review is about aligning that set with the set of measures that we've got on inclusive growth so you'll be seeing that as part of the parliamentary scrutiny process in the spring next year Thank you, just to follow up on that on that point one of the key priorities of the government is hard alignment across the enterprise agencies there are a number of skills and development agencies involved in the economy and the Audit Scotland report on the enterprise agencies last year identified the need to provide clear targets that can be measured against performance across the enterprise agencies reading the guidance given to HIE and the ministerial guidance given to HIE there are numerous references to inclusive growth but without that definition do you recognise the concern of giving vague guidance to the enterprise agencies on an economic concept that doesn't have a hard definition might lead to some confusion? I think the underlying question is this worth doing and I think it is very much worth doing although I do acknowledge and I think I've said now twice that there is more work for us to do in this area but in relation to alignment I think that's one of the points of the enterprise and skills review so you've ended up with a strategic board and the agencies will have somebody their chairperson in fact on that board so the alignment that can take place and this also includes with reference to a commonly understood definition of inclusive growth but also measures which can be put in place to measure that that is one way in which that can be taken forward through the strategic board that is fundamental to what they're doing so we do through the national performance framework and the other measures which I've mentioned we do have indicators as to how we're performing in relation to that and I acknowledge they're not as definitive as we want to be but that's because this is a fairly new area of work for any government and I think we will take a big step forward through the work of the strategic board because you'll then come up against if there's any anomaly between one agency and another and they're understanding inclusive growth they'll have the chance to address that through the strategic board of which they'll be members Mr Lockhart, particularly the Highlands and Islands enterprise I suppose they've been doing that for the past 50 years because they have a social objective alongside the economy and actually the framework I discussed earlier that we've piloted we've shared that with Highlands and Islands to look at that framework for their own data it's more difficult obviously at the national level because you're into a wider basket of indicators but I suppose at the top of the economic strategy there's two pillars one is improving competitiveness and the other is reducing inequality both of those we rank ourselves relative to the OECD so for output per hour work the productivity measure we're 17th in the second quartile for inequality we have two measures the genius and palmar ratios again we're in the second quartile and the ambition from the enterprise and skills review is to move up to the first quartile in that and some of the early work that's been done for the strategic board is kind of benchmarking the gap that you would need to do nationally and that would be delivered differently across different parts of Scotland thank you and just on that point at OECD based on the index of social and economic wellbeing which in turn is based on OECD data Scotland's performance has declined from being 16th ranked to 20th ranked is that index something the Government monitors and takes the actions around well I think yes I think we would say that if you look at the correlation between increased poverty, increased use of food banks and welfare reform you can see a I would think a causal effect there so there are a number of factors which play into that I think we are very focused on what we can do in terms of trying to increase inclusive growth but they won't be the full suite of powers we've had this debate many times in the past about where power lies between the UK and Scottish governments in terms of the economy I think any sensible person would come to the conclusion there's a mix of powers and the UK Government has some very substantial powers in the UK economy so we acknowledge the fact that we are not in control of all the measures that we'd like to have in order to affect that but of course we monitor over time I don't know what to add to that just to say we've worked closely with OECD over the last two years we've looked at their better life index as a potential kind of measures of wellbeing we also at the recent inclusive growth conference which the Scottish Government held, we had Gabriella Ramos the deputy chief chief of staff and deputy chief secretary of the OECD and she presented on inclusive growth and wellbeing and actually she had data which included Scotland and the UK regions covering a range of different indicators again we can share that with you we're going to make all the material from the conference available so we've looked at better life index the world economic forum also having inclusive growth index we're looking at that I suppose that what the OECD says is in their better life index it covers a range of different metrics across things that are of interest they don't put different weightings on them though they say it's up to individual countries to weight what's important to them so there is a need for some overall aggregate or a basket of indicators so you can compare internationally thank you move on to questions from Ash Denham and then Gillian Martin thank you good morning I know we've touched on this already this morning but I just wanted to explore a little bit further the responsiveness between you know for the O&S to Scotland's priorities so when the O&S were in giving evidence to the committee last week in response to a question about that they said that they do consider themselves to be very responsive to Scotland's needs and priorities but that was slightly undermined by the UK Stats Authority who were on the panel as well who then sort of chimed in and said well they need to be pushed quite often so Charles Bean then also said that he felt there could be more integration of Scottish Government at a kind of a high strategic level of the O&S for setting on going priorities so I was just interested in the panel's view on that of course the day-to-day relationship will be between the officials here and the O&S the one thing I'd say about the O&S is that we had a big issue a number of months ago in terms of classification ESA 10 was a fairly obscure title of the re-classification and it was a decision of the O&S for example to put back on to the public balance sheet projects like the Aberdeen-Western peripheral route I think at that time it was quite a frustrating exercise to try and interact first of all you have the quite legitimate point that these things are meant to be immune from politicians and what they're trying to may otherwise try to do but I think there has to be a common understanding and that point they went with I think they struggled about O&S in terms of the resource that they had to deal with this issue it was new to them and relied I think too heavily on Eurostat who took a view which was not popular amongst lots of parts of Europe so there have been frustrations on that as a cabinet secretary have day-to-day dealings with the O&S but he's going as well We have first of all a concordat with the O&S and with the other devolved administrations that govern the way that we work with them and that's basically on the principle that will work and share information and data and work collaboratively together and we have a sort of board that Sandy mentioned called O&S Administration Committee that essentially plans out how that will work so I'm quite pleased with our relationship with O&S it's very constructive on a working working level there are situations where they'll you know that it's quite right that the national statistician takes decisions about the statistics that O&S produce themselves such as the decision to release access to statistics that I'd perhaps disagree with but there are on a day-to-day basis we're progressing very well and an example of that would be through the development of the digital economy act that I mentioned earlier on that should allow us greater access to O&S and at HMRC data I agree we have a very good working relationship with O&S we are at the decision making table for surveys and the admin data work that we're looking at also sub-UK information is very high up on the O&S as a gender anyway so we're feeding to those arguments I think things are very good on the survey side as we move into using more administrative data I think this is where it gets a little bit more complicated this is all about data that largely comes from other development departments and will be routed through O&S to us and we've still got to make decisions about whether we get information directly from HMRC for example in bilateral agreements or whether the information goes to O&S they process it and we use the Scottish elements of it there are some big discussions there and I think you're probably right when we move into those big discussions especially on the new areas we probably need some other mechanism possibly to discuss those in more detail so you mentioned surveys there so obviously Northern Ireland's statistics agency has the power to compel responses to those requests for information from the Government would the Scottish Government like powers to compel? I think we should keep an open mind in relation to that of course we don't have the same powers as in Northern Ireland not least in that regard but also in relation to corporation tax and other things as well I think we should keep an open mind on what would be useful if we move forward in any particular direction on new methodologies or even new figures it would be useful to have where possible cross party support for that so as I said the findings from this inquiry and also the work of the strategic board should get us that broader based support for a particular change so I think we have to keep an open mind in relation to that to the general relationship with O&S O&S are currently asking us if you want to have a change to the day on which the labour market stats are released and we don't we're happy enough with that so we'll see how that that pans out so we do disagree on things but I think the importance of the O&S is it gives that and it will be true whatever the constitutional future is for Scotland and within the EU whatever the constitutional future is for the EU you want to have somebody else affirming the independence and the integrity of your stats there are other international bodies of course but I think it's a very useful relationship that we have just now I don't know if anyone else was to comment on the Northern Ireland situation only that actually getting those powers is I would completely agree with Mr Brown there the two couple of things to consider if we did that one of which is the burden upon our businesses so I've seen in the written evidence that we've got from Northern Ireland statistics colleagues that there's a compliance cost to businesses in Northern Ireland of around a million pounds and we need to be quite cognisant and of the change that and that's a kind of an on-going cost that's not a sort of a change to the way that businesses would need to set themselves up to report on a Scottish basis as a sort of one-off cost and also the cost of producing the statistics is a step change higher because they do a lot of the data collection directly and so they quoted a £1.8 million per year for doing that as well so we need to be cognisant of those things and I think that there's definitely a lot that we can explore about use of administrative data and use of commercial data like we're saying that might actually replace significant parts of business surveys that might mean that actually it becomes less important to have that power and what would the real power is in accessing and using those kind of new sources of data? I think it's also true that they have a difference in Northern Ireland where by companies the registration for companies I think is different so they got access to a different database there but I think just going back to that point I think before considering any one change merit in it is worth thinking about the consequences of that change and whether you want to do it in concert with other changes which might help mitigate the cost or the trouble for business so it's possible to do that and we do want to avoid tripping over ourselves I mentioned regional data within Scotland Scottish level data, UK level data there's also international level data so I think the extent to which we make a change if we can bear in mind the costs and burden on business that would reduce that cost and burden Gillian Martin I do want to ask more about inclusive growth but before I do that I'll just lead on from something along the lines of what Ash Denham's just been asking around survey responses Do we know how many firms that are receiving public sector support maybe through enterprise agencies are not returning requests for data to the Government? I know that the Scottish Government doesn't know that and we would not get access to that kind of information from the surveys that are done the statisticians can I don't think they'll know that data either there's no basis on which to do that the support that companies receive would be itself a good channel to encourage completion of surveys I understand that point and we should do more of that but no work's been undertaken comparing companies that don't return surveys and those who do receive public sector support it could be explored further I think that there are 10,000 companies helped by Scottish Enterprise alone each year and within that 2,200 more intensely account managed so I think it's an area that we could explore further but we do have to bear in mind that Chinese wall if you like between what the Government does in one hand and the collection of data but I don't know if anyone else wants to add to that No, not particularly OK I want to come back to wellbeing it was mentioned very briefly in response to my colleague Dean Lockhart We've heard from quite a lot of witnesses that statistics on non-market activities are not being covered particularly effectively in traditional economic statistics I'd like to ask for example what the Government might be doing to look into quantifying non-market activity and the value of that and how the impact of progressive policy interventions might be able to be measured against that I think that this goes back to some of the points that Dean Lockhart raised around being if not quite an emerging area of focus it's been talked about for some time so you've had happiness and wellbeing in indices which I think were treated with some skepticism when they first mentioned but I treated much more seriously and the idea that there is more of value to interrogating the economy than the number of people employed in the amount of economic growth so I think it's grown but it's still an area where there's not enough detail we do have for example other examples where the OECD are looking to measure the value of childcare for example in the economy and things like the inclusive growth conference recently are indicative of a growing move to try and measure these things but again this is something which is growing but again the opportunities for increasing it further are through the analytical unit and the strategic board of Scotland but I think it's entirely right we look at other measures childcare is one but inclusive growth is another inclusive growth wouldn't necessarily itself as we just discussed but it's very important to the government so I think we do need to get more information in relation to this but as to what's there already I don't know if Gary what's to mention I think your question was probably I read in the evidence someone mentioned time and use surveys which is a way of capturing our things activities that individuals do which we don't have a market value and at the moment that's done at the UK level we don't have Scottish specific data which is wise which is women in Scotland's economy at Glasgow Caledonian University about the opportunity to look at that again we've used that data in the past to look at the informal hours of caring provided by parents essentially caring provided by individuals to others and also if you look at things like personal care, free personal care the informal hours that are provided so it's kind of different to Mr Neil's point in the sense that the black economy activity has a price that this obviously doesn't and actually it's really really important for some areas of social policy childcare in particular to get a better use of the potential use of that so that's something again if the committee recommends that we'd be happy to look at and something that would add to the wider social data that we have in Scotland from the wellbeing aspect of this obviously with the increase in childcare hours can I ask what the Government are doing to quantify the impact that that will have on the wider economy Mr Brown will be familiar with the fact at the time that I mentioned this I'm convinced that it's going to have a massive impact on the productivity particularly of women what have the works been done to quantify that as that gets rolled out I'll let the statisticians respond on a specific point but you're quite right another area of activity is in relation to universal basic income which you don't have in Scotland obviously but you're seeing in Finland and parts of Canada this is being used now that's going to raise questions about what the benefit of that is, what is the economic impact of that and how you measure the economic impact of that so I think my colleagues in education have laid out some of the benefits we expect to achieve through the expansion of childcare I suppose just to say that within government we did some work I think back in 2014-15 around the potential impact, economic impact of improved childcare that work was published and essentially that looked childcare as a potential barrier to female participation based on the evidence around costs and caring and essentially modelled the impact of childcare into the labour market through that constraint being relieved so that was one if I'm correct that work was based on differences in participation rates in the labour market between females in Scotland relative to other top quartile OECD countries so that work was there but obviously childcare has multiple impacts across a range of areas wellbeing early years participation you would look to measure changes in the gender pay gap you look for reductions in occupational segregation from women getting into more equal opportunity into different sectors of the economy so I suppose in a sense that the initial driver for it was partly to do with the following participation rates for females in the labour market in Scotland relative to the top quartile but when you provide a policy of that then obviously the benefits of it are much wider than that also impact on under employment I think as well if you expand childcare then obviously some particular women are constrained in terms of the errors they can work because of childcare commitments that can have major impact on under employment which is one of those areas we want to get more information on and more substantive data in terms of under employment as well there is another area as well that I am interested in how you analyse the impact of infrastructure spend so I guess for example one example would be the borders railway yet when we are looking at improving for example rail infrastructure in another area the impact studies seem to be very much based on passenger use and I am just wondering if the data is there or the ability to collect the data there and the wider impacts of something like an infrastructure spend like a rail network is there to inform future development Yes so work in relation to borders railway has been done on that wider impact and I am happy to get that from my colleagues who are now responsible for it and pass that information on but the way it starts off is quite a narrow approach which is a cost benefit analysis and a ratio between one and the other and that's often the gate through which projects have to pass if they're going to be successful and we've argued in the past borders rail may not have proceeded if that was the only measure that was going to be undertaken and we already know that there's been substantially more benefits than those which just direct relate to the passenger numbers which in themselves are very good in my only area when we opened the Stirling, Alawak and Cardin line we had to estimate and we're told to estimate around 80,000 people using it turned it to be 400,000 in the first year but that is only one measure so there has been it tends to be after the event in the way that those projects, especially rail projects, progress although we do a similar analysis for road projects as well and we did an analysis for the expansion of ferries that we've seen as well but that tends to be after the event but I'm happy to provide the information that it will be Humza Yousaf would have that information pass it on to you about what's being done to try and measure mainly around, in relation to borders the benefits of travel to work engagement in the jobs market and also the pattern changing model use so we anticipated before we did the borders that most of the traffic would come from tweed bank in further south and in fact the biggest increases actually come from stations right next to Edinburgh which obviously is a model shift that's taking place here as well so happy to provide further but we do analyse that after the event we don't just say that's it done and forget about it so I'm happy to provide the information Of course it would have an impact as well on people's participation in the labour market as well and tourism so having a very clear economic benefit as well so again, as opposed I'm asking is the data sampling in place in order to be able to assist people like myself who want to make a case for an infrastructure development in their area on the basis of something that's already happened If we're talking specifically about rail projects they do try and take that into account as well they make a best guess on that as they can do but what I was saying there is that we do go back and analyse what the impact of it has actually been so when the borders railway was agreed it wouldn't just be the passenger numbers alone but that's a very big part of and we remind it out with the Edinburgh to Glasgow line every line in Scotland requires subsidy so it's not the case that the passenger numbers are ever going to justify by themselves the investment that's made but there is an attempt to try and capture that I think it's been refined over recent years even during the time I was transport minister where they have had to try and take a broader approach as to what the benefits would be so it's fertile ground for you to look at to see what the, I'm not entirely sure which rail line it is you'll be advocating but it's fertile ground so they do undertake some of that work but we also undertake work after the event after the infrastructure is completed okay thank you very much so you could write in about anything that you weren't able to fill in on that question with a quick question for me before we come on to Jackie Baillie this is about pre-release of data now the ONS in Bank of England have stopped pre-release access to data which includes things like GDP but Scottish ministers still have pre-release access to all Scottish economic statistics do you think that that should continue or should that be ended to make the practice uniform with the rest of the UK I think the decision on it for the data that we produce should be a decision taken by the statisticians but just to be clear ONS is the only part of the UK Government that's removed pre-release access so you still have Whitehall departments that allow 24 hour access and decisions as I mentioned on this are taken by the chief statistician Roger Halladay my view is that current arrangements work well we have pre-release access is very tightly controlled there's no evidence that the system is being misused I think that was one of the reasons which the ONS gave when they changed which was in particular market sensitive information there's no evidence that's ever happened in Scotland and I'm happy to be contradicted on that if anyone's got any evidence to the contrary but pre-release in itself and it'll be true of those that have previously been ministers as well in government that it ensures that when ministers are called upon to quickly respond to stats at the time of publication they can do so in an informed way and that also allows time for the appropriate briefing there's no question that you're presented with a set of stats and that just doesn't happen it couldn't happen so I think it is aged public understanding but it's a decision that's taken by the statisticians and perhaps they don't want to comment sure so the key point is the decision is mine who gets pre-release access to our economic statistics and the principle that I'm working to really which is why I think it's the correct thing to do is that when figures are released by quality and they're understandable by the users of the statistics so I think that some level of pre-release access is important for good government so that ministers comment properly on figures when they come out and like Mr Brown said it's tightly controlled and that we have got a very good record on ensuring that there's no breaches of that trust and I think that clearly it's right that the UK national statistician chose to make that decision for the Office for National Statistics but actually you know that's it's not necessarily that straightforward that that should apply elsewhere the first thing that I would say around this is because I've witnessed a couple of situations in recent months where actually not having that pre-release access has made things a little bit more difficult so for example that media outlets want to go with data immediately when it comes out and ahead of the the end of pre-release access when we had access to the the labour market statistics ahead of their release the Scottish Government statisticians prepared a summary of what the Scottish figures were saying and that was published at the same time that the ONS published their data and the media outlets took that and ran with that but we've been a number of cases since the stopping of that pre-release access where the media organisations have misinterpreted some labour market statistics because basically what happens now is that at 9.30 we get access to the statistics and we turn them around pretty quickly but it's not instantaneous whereas some stories have been put out that aren't correct that are based upon a misinterpretation of the data and I don't think that's very helpful for anybody concerned and the other element here is around spotting mistakes so our statisticians as excellent as they are consistently across the organisation there's we're putting out hundreds of statistical publications per year there'll be a educational time where I've seen things in the pre-release access period that I've been involved in the direct production and sort of bringing a different perspective to this where I've kind of spotted something that's not right and have able to make a change to the the figures so that they are correct when they're published and I think that as well is a very helpful thing for us to do so I think this is a pre-release access is a helpful thing I actually think it's overplayed in this debate I think there are other much more important things about ensuring the trust in our statistics about data handling making sure that we hold and trust treat people's data securely set in the culture where statisticians are independent of influence and we've already talked about our code of practice and our statistical legislation of doing that and of having high quality statistics and responsible for the recruitment and the development of our statisticians here and all of that together we've won the sort of raw statistical society prize for the best statistics in the UK this year with our index of multiple deprivation and that shows that actually we're delivering high quality statistics here in Scotland as well so I think overplayed in the debate and I'd support pre-release access so you're disagreeing with the witnesses who've given evidence to this committee who are not involved in the Scottish Government or at the Scottish Government level at all that there should be no pre-release access yes, yes I am yes I think it's there it's the statistician in charge of a particular producer of statistics that's ultimately responsible for that and that's their decision but truly that should be independently checked well, I think that what the UK Statistics Authority which is our statistics regulator respects the decision the relevant heads of statistics in each of the producers across the UK like Mr Brown said the ONS is one organisation that produces economic statistics but we've had over the last month the HMRC the Department for International Trade and the HM Treasury that publish statistics about the UK and about Scotland the HM Treasury country and regional analysis of public expenditure that had pre-release access to Scottish economic statistics so I think that the ONS and the back of England aren't necessarily typical of the arrangements for the UK well, I think that Andy Wightman wanted to come in on this on this particular point I should want to confirm that the pre-release access to official statistics Scotland Order 2008 governs the pre-release of statistics of devolved statistics and therefore that's something within the gift of ministers to introduce any amendments to that and indeed Parliament to prove it so it's not actually something that's in the gift of statisticians as such so it's not a comparable situation to the ONS's decision is that correct? Well it will be for ministers to make a change to that act but in terms of the the way that that act's currently set up that sets me up as the person that's responsible for making the decisions on who gets access to statistics and pre-release period So it is comparable to the extent that you have the same authority as the ONS have That's right, if I wanted to change that situation then I could still change that situation But you've chosen to take a different view That's indeed so Okay, do you want to clarify that? Yeah, thanks I'll come on to Jackie Baillie now Given that most of my questions have been asked I'll still manage to ask you a few Can I go back to the pre-release of statistics because in your letter maybe it's just my interpretation of your careful wording You talk about who and when in terms of who receives pre-release access but there is a principle here about whether that should apply Is that your decision or is it as suggested by my colleague Andy Wightman that that's actually something ministers decide through legislation? So to be clear that the ability to change that legislation lies with ministers but the delivery of the legislation leaves the power with me Okay, that's helpful clarification You referenced the UK Stats Authority which I thought was interesting because in their evidence to us it suggested that stopping pre-release would boost integrity of the Scottish statistics Do you not agree with them? I think that it's overplayed in for me the real drivers for the trustworthiness in statistics are sort of governed by making sure that we've got excellent statisticians which we have by making sure that we are very careful about the way that we handle data any kind of data loss it's going to be probably the most the biggest driver to reductions in trust I think it's also about the correct interpretation of statistics and one of the things that our statisticians have been doing is working with media organisations in Scotland to build up understanding and their ability to use data when it comes out and to be able to present that in a way that is balanced and is correct and I think those three things will be much more significant than in pre-release access to be honest I would expect it not to be mutually exclusive but you can do it all in effect to make sure that the integrity of Scottish statistics are something that are gold standard and the UK statistics authority were very complimentary about the statisticians this isn't about them it's about what then happens in the interpretation of the information you talked about the media and we're all very conscious of the role the media plays in scrutinising Parliament and government but were you meaning to suggest that only ministers can interpret the data for media consumption because that was your defence of pre-release? The example that I gave about the labour market statistics is actually that our statisticians here in Scottish Government when we got pre-release access to labour market statistics 24 hours in advance would prepare a Scottish analysis of the data that was then published alongside the the O&S figures and that that was then used directly by the media in Scotland as the analysis and interpretation of those numbers now that we as the statisticians in Scottish Government don't have access to the numbers ahead of when they're coming out on the labour market that's broken down a bit and that I've had to work and offered to work with media outlets to help them better present the data now I think for me that's a work around rather than being an optimum solution I think there's a difference though you'd acknowledged, sorry that just let me finish this point between pre-release to ministers who will obviously, of whatever political strike put a political spin on things and pre-release to other statisticians there is a difference I think that whichever voice we use to present the statistics I think it's important that that's done in a way that the person giving that interpretation of the statistics understands them understands whether they've changed the evidence base around that issue and so I think that whether it's for ministers making the presentation or whether it's our statisticians or other Government officials I think it's you know having that time to brief people and make sure that the figures are correctly interpreted and presented is important ministers again of any political strike will want to put a positive spin on any set of statistics coming out so actually isn't it the case that the most balanced view on the data comes from the statistician and not necessarily the politician it pains me to say this but is that not the case well the politicians don't compile either the interpretation of the figures themselves we'll put a pressurise out about the figures and sometimes opposition politicians can have their own slant on these figures as well but we don't you acknowledge you have a slant too that's the point I'm making but thank you for confirming that the statisticians are putting together the figures and when they get that they're putting on the interpretation it's a bit like the old thing of I'm not mentioning any it's like when we deal with polls as politicians you have to compare like with like and sometimes just to make that clear and it is not always clear from the bear data that comes from a it's a pretty convoluted set of information so I think we don't tell the statisticians what they're putting the interpretation we deal with it the same as other parties will deal with it once it's in the public domain I was going to make which he kind of you touched about so I suppose there's two elements the statisticians produce a statistical bulletin which is very dry and describes the data and then often accompanying that there'll be a government news release and again that'll factually provide the key data and then there's a commentary from minister so I suppose your point is the latter around the commentary but I think Roger's point around the labour market data is and this might be a recommendation on the market pre-release is when they publish the data at 9.30 put out a statistical release for Scotland and give the key numbers because the points Roger is making is that essentially we get a database at 9.30 and in the world of fast moving media people tweak figures and they are picked up and sometimes the figures can be correct so that would be a service along a pre-release statistical version of that and that would probably help with that and then what you would get later is different ministeria or political interpretation of the figures Thank you, that was helpful We heard from a number of witnesses obviously about the importance of the independence of official statistics and as I said earlier they were complimentary about the integrity of the statisticians but acknowledge that perception is equally as important Do you think, therefore, that the Scottish Government can be both the producer and user of economic statistics? Who are you looking to answer that? Cabinet Secretary, you've been quiet Yes, I think for the reasons that I mentioned before the independence is guaranteed I think Roger or Gary or Sandy would certainly be very vocal if we started shouting at them about the stats producing, we have to deal with that and the same would have been true when you were in government you deal with the facts as they come out so, yes, I think I don't think that anybody involved in this and that's true I think of ONS or anybody else's questioning the independence of the statistics that are produced by the Scottish that's maybe not true for everybody but it's certainly true for those that are involved and you don't get these accreditations, you know the kite marks you don't get the accreditations that are involved in this about the Scottish Government's officials working in this area saying they are independent they can rely on the integrity of their figures of course, as I've acknowledged right throughout this inquiry we have to improve on them further but I don't think people are seriously questioning the integrity of them Could I maybe just develop the point because in your 2013 white paper you contained a proposal that Scotland would establish its own national statistics institute post independence now, obviously, given the significant powers of the Scottish Parliament now why don't you set one up just now? For one factor, and again at the intro, Roger will know more about this to me, but European law requires each member state to have an independent national statistics institute so ONS is the one for the UK we've discussed at length already today the extent to which there are figures produced by the ONS which we don't currently produce if we were to replicate all that they did it would be very expensive to do and that would be in addition to what we contribute to the UK treasury to fund those stats already so I think the chief statisticians of the devolved administrations as I've said are independent of ministers it's not to say, as I've said already that we shouldn't look to further improve them make them more comprehensive and more relevant where we can be duplicating the outcome unfortunately of the referendum was that Scotland didn't become independent so we shouldn't be duplicating things that are done that still leaves a very open question about what's best done at UK level what's best done at Scottish level as we've discussed already and even at local level so I think we're not going to duplicate and pay twice for the same information and I think what we have to do is to continue to grow the reputation of Scottish statistics at the same time not least prompted by the establishment of the strategic board to make sure that it's as relevant and comprehensive as possible that seems to me in the right way to go I ask specifically to Mr Gillespie and Mr Halliday that there may sometimes be an issue of perception of the misuse of statistics despite your reassurances that that's never happened do you feel there are any issues for you professionally in both producing economic statistics but at the same time you have a responsibility to support ministers in their interpretation of those statistics in relation to the Scottish economy? I'll go first if you want so I don't find any issues at all because it has been set out the production of the data is the production and the data are the data and then as a user I use that data to inform analysis or views on the economy so I'm completely removed from the production side so in that sense and I suppose that you have a point about perceptions of data there will be different interpretations of economic data and I think that will always exist unemployment falling is that a good thing yes no depends on the types of jobs there will always be different interpretation my key focus is really on the statistics that we publish and this gets back to the early release about pre-releasing the statistical bulletin that people accept the numbers are the numbers and then you can have a debate about the interpretation and in fact there's a lively debate about interpretation of economic data almost every day in Scotland and I think that's quite healthy but where I would worry personally as if people were saying well the data aren't fit for purpose are not robust that were being picked up around trade statistics and stuff it makes it more difficult to be definitive about policy so for me it's about the quality of the data I think that the interpretation is all fair game I would say first of all to go back to your last question is just that essentially there would be a legal requirement for us to have a national statistical institute if we were part of the European Union as an independent nation but clearly there's no structural requirement at the moment and I think actually having an independent statistical service for Scotland would kind of detract a bit from what we do I think we've got two things to balance up one is the perception of independence and one is the relevance of what we do and actually I think that having economic statisticians working alongside economists and specialising in the Scottish economy creates some synergies and helps to deepen our statisticians understanding of the wider economic environment and that for national statistics institutes that run separate from that kind of environment it's always a challenge for them to make sure that they are responsive and relevant moving with the times that so I would say that just to because you asked about speaking out on statistics I mean as the chief statistician I've kind of engaged with a number of people and organisations where I've felt their use of our national statistics have not been correct or appropriate and I prefer to handle that privately to start off with but making that clear that I would address more those things more publicly if their inappropriate use of statistics didn't that was not more than a one-off so but that hasn't been necessary as we speak today that would of course be a role for the UK statistics authority would it not we very much work collaboratively on that and there would be times where they would want to comment they would want to deal with the matter and there would be times where we both want to be involved one final question convener because the cabinet secretary showed great dexterity in shoe honing an announcement about the south of Scotland enterprise board into an inquiry on data so I wonder whether I could ask him two questions that flow from that can he tell us when this board is likely to get legislative underpinning that the resources will be put in place for it I think I said in the statement 2020 is when we're looking to so I think the process for that starts next year legislative process starts for that next year and Jackie Baill will recall I think the reason that we have gone through that route there are other methods by which you could establish a board is because the bulk of responses to the consultation that we carry it wanted it to have the same legal underpinning that high currently has so that's why we're doing it in that way and what we're doing now in the meantime we're doing a partnership there'll be costs involved in the establishment of that partnership but the bigger value they will be bringing together the people that will be involved in that you'll know the geographical area and some of the central interest in that area and in terms of the actual costs there'll be costs for the running of the interim partnership there'll be costs for the legislative process going through and there'll be the cost for the establishment of the agency itself those of course are all subject to I can just say in relation to the last question that I'm very pleased that we're all agreed that independence is a good thing of statistics yes and free from interference from ministers yes but not of the country cabinet secretary that's a very large discussion I don't think we'll go into that issue and whether we agree or not agree on that perhaps a final brief question from Andy Wightman thanks convener it's just a couple of questions on the Scottish fiscal commission you'll be where they give evidence for us obviously they're a new body with very important powers responsibilities rather I confess I was rather surprised that they had been approved as a research at the HMRC data lab which involves them travelling physically to London I'm sure those arrangements are deemed appropriate given the sensitivity of the data but given their job it seems strange that they have to travel to London but you're not responsible for HMRC but they do have to pay for data from the Civil Aviation Authority again that's not your responsibility but they do have to pay for registers of Scotland and I'm just wondering if you feel that it's appropriate that one Government body with such important responsibilities should have to pay for important data from another one and the second question really is that they drew to our attention the need for better data on price I'm just wondering if you give us any reassurance that that need is being treated with some priority within Government Can I say anything on the latter point that really is from my colleague Derek Mackay he obviously has to work through with the fiscal commission and the fiscal framework his discussions on the budgets much more in his area than it is in mine in relation to the they want better price earnings GDP and public spending data that's economic data taking your assurance that you're aware of that and will do everything in your power to make sure that they get that data I don't think that's something under the responsibility of Derek Mackay The fiscal commission is a body that he relates to through the budget process but I think I've covered throughout the session the areas on which I think we have to improve economic data and also in relation to some of the gaps that we have and I've also laid out where I think that can best be taken forward in the last conversation with Jackie Baillie the independence of the statisticians involved is also something that he wants to observe so of course we're aware of that we want to try and improve those areas again I would just say it's best done on a cross-party basis and I think also in conjunction with the strategic board in relation to the purchase of data by Registers of Scotland understand that the charge for that data is there running a commercial basis and it's a key source of funding for them but we do have to ensure overall that Registers of Scotland is a non-ministerial department of the Scottish Government but we do have to achieve that Government across its peace is achieving value for money and in this case that's a question for the UK Government as to how it achieves that but you're factually correct that Registers do purchase that information Okay All right, thank you very much to the minister, the cabinet secretary and his officials we'll suspend the session now and move into private session Thank you