Measurement of Government Output and Productivity for the National Accounts The Atkinson Review Meas

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Measurement of Government Outputand
Productivity for the NationalAccountsThe
Atkinson Review Measuremen
t of Government Output and Productivity for the
National AccountsThe Atkinson Review

• Joe Grice
• Executive Director, Atkinson Review

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Subject of Review National Accounts

• Purposes and Limits of National Accounts
• Macro-economic management
• Measurement contribution of economic activities
  to welfare
• Coherent with, but different from, micro-measures
  of efficiency of service providers or agency
  targets

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Timetable

• UK National Statistician, Len Cook, commissioned
  Review, December 2003
• Interim Report published, July 2004
• Final Report will be published January 2005

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A Long-RunningStory

• Conventional Approach Output Inputs
• Assumes zero productivity growth
• SNA 1993 approach DIRECT measurement of output
• European Implementation
• ESA 1995
• Handbook on price and volume measures in national
  accounts 2001
• EU Decision of 2002

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ONS Programme of IntroducingDirect Output
Measures 1998-
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Key Findings ofInterim Report

• ONS among the first to introduce direct measures,
  but first generation methods need to be refined
  (as already in health).
• Interim Report sets out a principled approach
  within the framework set by international
  guidelines.
• Important to improve measures of government
  inputs as well as outputs.
• Need for increased statistical resources to be
  allocated to measuring government outputs and
  inputs

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Principles

• Output
• Output should be measured by incremental
  contribution to individual or collective welfare
  ie the added value of service concerned
• Start from services provided, and seek indicators
  that give full coverage.
• Value should be seen as adjusted for quality.
• Formal criteria should be established for
  extending direct output measures to further
  services.
• Measures should cover the whole of the UK.

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Added Value

• Input Activities Output Outcome
• Parallel with market output
• Measures incremental contribution to individual
  or collective welfare
• Value depends on quality and context

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Principles

• Inputs and Productivity
• Measures of inputs should be as comprehensive as
  possible, and should include capital services
• Consideration should be given to the split
  between current and capital spending
• Criteria should be established for price
  deflators applied to input spending series
• Independent corroborative evidence should be
  sought on government productivity, as part of a
  process of triangulation

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Triangulation

• Outputs
• divided by Productivity
• Inputs
• we need to work on all three.

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Necessary WorkProgrammes (1)

• Review has already established work programmes
  with Departments covering key areas
• Report sets out questions that need to be
  addressed in each field.

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Necessary Work Programmes (2)

• Health improved measures introduced in June
  2004 further work on quality adjustment , UK
  coverage, GP usage productivity article to be
  published
• Education improved volume and attainment
  measures, exploration of quality adjustments, and
  value of education approach, possible satellite
  account.
• Public Order and Safety work on division between
  collective and individual services, alternative
  output measures, UK coverage
• Social Protection work on improved coverage, UK
  coverage, relation with market sector.

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Final Report (1)

• To be published in January 2005
• Will draw on responses to Interim Report and
  discussions with international organisations and
  national statistical agencies

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Final Report (2)

• Will revise and refine properties from Interim
  Report
• Will report progress on the key agendas
• and propose ways forward in each case
• Then for Len Cook, as UK National Statistician,
  to decide whether to accept recommendations