Scottish Economic Statistics Consultation Group (SESCG) Annual Meeting
Scottish Government (SG), St Andrew’s House, Edinburgh
24th March 2015
Attendees
Apologies
Mairi Spowage, SG (Chair)
David McPhee, SG
James Boyce, SG
Marina Curran, SG
Richard Morrison, SG
John Dowens, SG
Iain Peace, SG
Janet Lauchlan, SG
Gregor Berry, SG
Gary Campbell, SG
Ken O’Neill, SG
Anna Murray, SG
Claire Gordon, SG
Silvia Palombi, SG (Minutes)
Donald MacRae, Lloyds
Stephen Boyd, STUC
Kim Swales, Fraser of Allander Institute
Margaret Cuthbert, Independent Consultant
Hervey Gibson, Cogent
Grant Allan, Fraser of Allander Institute
Heather Smith, HIE
Jim Cuthbert, Independent Consultant
Richard Marsh, SPICe
Alex Morton, South Lanarkshire Council
Sara Grainger, Revenue Scotland
Simon Wakefield, SPICe
Sandy Stewart, UKSA
Jonathan Slow, Scottish Enterprise
Trevor Fenton, ONS
Charles Burton, Oxford Economics
Eric McVittie, Experian
Ewan Sneddon, HIE
Nick Sobey, HIE
Bryan Buchan, Scottish Engineering
David Bell, Stirling University
Kenny Richmond, SE
James Gillan, DFPNI
Stevan Croasdale, SG
Brian Ashcroft, Fraser of Allander Institute
Iain Duff, Bank of England
1.
Welcome and Introductions
Mairi Spowage (MS) welcomed everyone to the meeting. Members were invited to introduce
themselves and offer a brief background of their interest in economic statistics.
MS also introduced Surjinder Johal (HMRC) and David Phillips (Institute for Fiscal Studies)
who would be participating via video and telephone conferencing, particularly to the
discussions relating to the Revenue Scotland and public sector finances sections.
2.
Minutes and Actions of previous meeting
The Minutes of the last SESCG, which had been previously circulated to the Group, were
accepted as an accurate record of the meeting.
MS presented the action points of the previous meeting. These included the incorporation of
Labour Market Statistics within SESCG; the continued programme of stakeholder
engagement, with the 2014 GERS Consultation being one example of OCEA’s commitment
to users; and the establishment of the Oil & Gas working sub-group, whose first meeting was
held in November 2014. On the last point, MS invited members to get in contact with their
ideas for future sub-groups, suggesting public sector finances and next steps for the QNAS
publication as possible focus areas.
3.
Labour Market Statistics
James Boyce (JB), Head of the Labour Market Statistics Unit, led this section.
After giving an overview of recent trends in Scotland’s labour market, JB detailed the
developments in the pipeline for the coming year, which include:
 the re-establishment of the Labour Market Forum, to reinvigorate user consultation and
receive feedback on the data needs of those interested in the labour market;
 work on the website, to improve the way in which information is presented;
 streamlining the headline labour market statistics publication, possibly by moving from a
very detailed annual product to quarterly releases of topical briefings;
 revamping the Public Sector Employment (PSE) statistics publication, with a change in
frequency from quarterly to annual also under consideration.
Discussion
There was general resistance among members to the proposed change in frequency of the
PSE publication. Stephen Boyd and Donald MacRae voiced concerns over the possibility
that PSE statistics may be published annually. Hervey Gibson echoed this view, adding that
employment is generally seasonal although less so in the public sector and a quarterly
release allows any seasonality in the data to be observable.
JB agreed the best approach would be to address the lack of pick-up by improving the
product in the first instance, for example by communicating results with infographics, then
look at users reaction and decide whether a change in timing of publication is necessary.
Action: Labour Market Statistics Unit to seek feedback on PSE statistics from key
users, and follow-up on publication plans with SESCG members in due course.
4.
Business & Digital Statistics
a.
Business & Digital Statistics Work Plan
David McPhee (DM) started by outlining the structure of the Business & Digital Unit,
highlighting the wide range of issues covered and the joined-up approach adopted
across the Unit to handling these.
Next DM summarised the main outcomes from the last year. These ranged from data
and presentational improvements on the latest Global Connections Survey (GCS)
publication (Trade Statistics branch) to a number of business and digital related projects
(Business & Digital Economics branch) as well as enhanced coverage of Growth Sector
and BERD statistics and increased collaboration with industry organisations (Business &
Enterprise Statistics branch).
A detailed but non-exhaustive list of plans for the coming year was then presented.
For the production of GCS by the Trade Statistics branch, plans include:
 developing a form of electronic data collection;
 scoping the use of administrative data sources for education and energy;
 using exports information from the ABS for data triangulation.
For the Business & Enterprise Statistics branch, key issues are:
 improvements to unregistered businesses estimates;
 work on SABS around local authority area estimates, and engagement with ONS on
plans to test regional capital expenditure questions;
 plans for a Scottish boost to the UK Innovation Survey, and extension of GERD
data to include funders as well as performers.
Priorities for the Business & Digital Economics branch cover:
 the development of a Digital Economy Maturity Index;
 work on the Access to Finance and Small Business Survey publications;
 support to the City Deals and Business Pledge projects and to the Foundational
Economy, the latter in collaboration with STUC.
Discussion
Simon Wakefield asked about the National Performance Framework review process.
DM said the review process of Scotland Performs indicators is currently internal but will
be open for external consultation in the Summer and expected to complete in the
Autumn.
Kim Swales queried about intra-national trade data. Trevor Fenton said this remains a
challenging area as there are no legal requirements in place to monitor export and
import flows between regions of the UK. DM added that OCEA would take this away and
think about it across teams at Scottish Government and ONS.
Action: OCEA to continue to raise intra-national trade as an issue at UK level.
b.
Business Classification and Ownership – SESCG Paper
Margaret Cuthbert summarised the key issues raised in her paper around definitions,
timeliness and coverage of the Scottish Government’s business statistics publications
(Businesses in Scotland, Scottish Annual Business Statistics (SABS), and Government
Economic Strategy Growth Sector Statistics).
Marina Curran thanked Margaret C for her inputs and covered the specifics in a
separate presentation.

Definition of Enterprise
Marina C started with an introduction to the Inter Departmental Business Register
(IDBR), which is the list of all businesses registered for VAT and/or PAYE, and how the
types of units on the IDBR fit together. She explained that a Reporting Unit is an IDBR
unit created by ONS for survey sampling purposes; this is structured into an Enterprise
Group (e.g. Tesco Plc) which can comprise one or more Enterprises (e.g. Tesco Stores,
Tesco Banks) and, below these, several Local Units or business sites (e.g. shops,
offices).
She clarified that all tables in the Businesses in Scotland publication are based on a
count of Enterprises (except for Table 8 which is based on a count of Local Units),
whereas all tables in SABS are based on Local Unit level data. She added that business
statistics published by ONS also tend to be on an Enterprise or Local Unit basis.
Finally it was noted that Eurostat’s business statistics improvement programme, i.e. the
Framework Regulation Integrating Business Statistics (FRIBS), is pushing for
information to be supplied on an Enterprise Group basis, to consolidate results for group
companies and avoid that subsidiaries with no autonomy are inappropriately classed as
separate companies; the UK is part of a Eurostat grant exercise investigating the impact
of this change.
Action: OCEA to provide further clarity, for instance by means of practical
examples, on business unit definitions in SG’s business statistics publications.

Definition of “Scottish-owned” enterprise
Marina C explained that “Scottish-owned” enterprises are UK-owned enterprises which
have their current registered office in Scotland; in the majority of cases, the current
registered office is based on the address in the VAT return. This definition of ownership
is used in both the Businesses in Scotland publication and the Growth Sector Statistics
database.
She specified that UK government business statistics allocate businesses to Scotland in
a similar way, using the VAT registered office address, whereas commercial databases
such as the Business Insider 500 tend to allocate businesses to Scotland based on
Company House registered office address.
Marina C then pointed out that the current definition of “Scottish-owned” enterprise gives
a good indication of the origin of a company, but not always of where the bulk of activity
takes place. She thus illustrated how “Scottish-owned” private sector employment would
compare under alternative definitions, namely the Apex approach (which uses the
headquarter of the “key Enterprise”, as identified on the IDBR, within an Enterprise
Group) and the employment share approach (which considers where the majority of
employment of the Enterprise Group is located). The general conclusion was that there
are some differences in the apportionment of activity / employment to Scotland
depending on which definition of ownership is used, especially for larger, cross-border
companies, and that more can be done to ensure that these issues are well understood.
Action: OCEA to improve communication of ownership concepts to users,
clarifying the methodology underlying published data and their interpretation.

Business size bands
Marina C clarified that all size bands in the Businesses in Scotland publication (except
those in Table 8) are based on the number of employees at UK level.
On Margaret C’s suggestion to break data down into more micro groups, Marina C
agreed that further disaggregation would be helpful.
Action: OCEA to make clear that data in Businesses in Scotland are by UK size
bands, by adding this as footnote to the tables.
Action: OCEA to provide data on more detailed size bands within the small
business group.

SABS
To address Margaret C’s point about the gap in SABS results for the financial sector
(Section K), Marina C said that ABS data are currently collected for the Insurance and
Reinsurance groups (SICs 65.1-2) but are not being published due to quality concerns.
However, as a result of Eurostat’s FRIBS, ONS may be required to extend the coverage
of ABS to include the rest of Section K, with the exclusion of SICs 64.2 (Activities of
holding companies) and 64.3 (Trusts, funds and similar financial entities).
There was also some discussion about the timeliness issue in SABS; this is associated
with the publication lag in ABS as Scottish results are built up from ABS local unit level
data. Marina C commented that the publication lag was a key criticism of the ABS
publication when this was assessed by the UK Statistics Authority (UKSA), and that the
ONS are currently investigating ways to speed up the ABS process.
Action: OCEA to work closely with ONS to address coverage and timeliness
issues in ABS data, and further improve these areas in Scottish business
statistics.
5.
Revenue Scotland
In this section, Sara Grainger (SG) presented the current arrangements for the timing and
detail of publication of revenue statistics. As these plans had not been publicly announced at
the time of the meeting, the forum was invited to treat information confidentially; for the same
reason, restricted material has not been included in these Minutes.
SG outlined the new legislation powers under the Scotland Act 2012, which include the
introduction of the Land and Buildings Transaction Tax (LBTT) and the Scottish Landfill Tax
(SLfT). She explained that Revenue Scotland was established as a body corporate on 1st
January 2015, with collection of the devolved taxes commencing on 1st April 2015.
SG also noted that Revenue Scotland had worked closely with HMRC and would continue to
do so going forward, through data sharing and a joint approach to analysis of revenues
information.
Discussion
David Phillips asked whether data on stamp duties would be accessible to the wider
research community from the HMRC Datalab. SG noted that, while currently not on the
agenda, this could be scoped in future.
Richard Morrison enquired about the possibility of publishing transaction data by property
value band and by geographical area, citing the development of imputed rent models as a
potential use of these disaggregated data. David Phillips expressed support for this point.
SG indicated that this suggestion should be achievable and would be taken to Revenue
Scotland for consideration.
David Phillips also queried about plans for statistics on landfill community funds, and SG’s
response was that these would continue to be published by the Scottish Environment
Protection Agency (SEPA).
6.
National Accounts
a.
Reflections on 2014-15
MS started by looking back at her first year as Head of the National Accounts Unit.
The period April-July 2014 saw, for the short-term indicators branch, the publication of
GDP results for the full year 2013, accompanied by a special events note on the Q4
Grangemouth shutdown which was well received and widely reported; for the QNAS
branch, the first release of productivity statistics and efforts to fulfil UKSA requirements
for National Statistics status; and, for the Input-Output (I-O) branch, the publication of IO Tables up to 2011 and the start of a large programme of impact work e.g. on the
Commonwealth Games.
MS continued with the main achievements in August. These were the first release of the
Scottish Retail Sales Index with a large and small stores split, following consultation with
the Scottish Retail Consortium as well as SESCG; the publication of QNAS as National
Statistics, for which the Unit was extremely pleased, both in relation to the positive
engagement the Unit had with the UKSA and for the improved product that resulted from
the assessment process; and I-O impact assessment work on the Carbon Budget.
It was also noted that since the publication of UK GDP on an ESA10 basis in September
there had been a number of meetings and discussions with ONS in preparation for
ESA10 Scottish GDP, with other developments put on hold to allow an acceleration in
ESA10 plans.
MS then updated the Group on the first Oil & Gas (O&G) User Meeting in November.
The release of Q3 results was rescheduled for January 2015 to allow incorporation of
users feedback on the O&G Model. Other outcomes were a change in timing of
publication, with experimental O&G statistics now released three weeks after the DECC
publication instead of seven, and a reformulation of the satellite account proposal.
January 2015 outputs included the 2014Q3 GDP publication, which incorporated
additional analysis and commentary on the impact of the Commonwealth Games and
Ryder Cup. Richard Morrison provided a brief background to the treatment of such
events in National Accounts, explaining how the associated economic effects were
captured in the Scottish GDP estimates and communicated to users.
Finally, March saw the publication of GERS for 2013-14. Where possible, time series
were provided back to 1998-99 on an ESA10 basis to be consistent with other economic
statistics products. Alongside this, the publication contained a new chapter on devolved
tax and spend powers to inform the fiscal autonomy debate and a number of other
improvements and presentational changes following the consultation process.
b.
Plans for 2015-16

Scottish National Accounts
The first item discussed in this section was GERS and its timeliness of publication.
MS gave a brief overview of the current timescales and data requirements for GERS.
On the Expenditure side, the Country and Regional Analysis database - the main source
- is published by Treasury in November, but departments update their spending
estimates in July for publication in PESA, so there are data available earlier in the year
from OSCAR and PESA for use in GERS.
On the Revenue side, most public sector revenue figures in GERS are based on
apportionments of UK outturn data (e.g. income tax, VAT) which are published monthly
in ONS Public Sector Finances Statistical Bulletin, with detailed components available
from UK Economic Accounts (PSAT2 dataset) three months after the end of the
reference quarter.
MS observed that expenditure data represent the challenging part but there is scope for
improvement. The proposal would be to investigate the potential for producing early
headline GERS estimates using more timely sources of expenditure data (e.g. OSCAR,
PESA, provisional Local Government estimates), alongside an assessment of the extent
of revisions this would entail.
Other topics within public sector finances were the ONS General Government / State
Government Accounts, and the need to think about possible implications for GERS, and
the publication of revenues information.
There was also some discussion about development work on experimental products
such as O&G statistics (in view of a transition to Official Statistics), Sector Income
Account & GNI (to be revisited after ESA10), and productivity.
Discussion
On GERS timing, the general consensus among members was in favour of efforts to
address the publication lag while ensuring robustness to revisions and that data quality
standards be maintained.
David Phillips (DP) recognised the political dimension of publishing one week before UK
Budget, rather than the publication lag itself, as the real issue.
DP also welcomed the recent improvements to the GERS publication, and queried
whether fiscal balance calculations going back to 1980 would be updated. Iain Pearce
responded that historical UK ESA10 time series are not yet available, but ONS have
plans in place to produce these at a level of detail to be clarified. OCEA will look into this
further.
Action: OCEA to explore other data avenues for elements of expenditure in GERS.
Action: OCEA to work with ONS on development plans for a State Government
Account and aspects of relevance to Scottish economic statistics.
Action: OCEA to investigate providing historical fiscal balance figures in GERS.

Short-term indicators
Key projects for 2015-16 include:
 implementation of ESA10 changes through coherence with Supply Use Tables;
 publication of GDP at market prices and GDP per head in volume terms;
 timeliness improvements (trial internally for July, roll out by October);
 refresh of Top-Up Inquiry and rebranding as Scottish Business Survey;
 other system / methodological improvements and data developments.

Input-Output
Key issues for the next year are:
 implications of Purchase Inquiry and UK SUTs debadging;
 Oil & Gas column;
 Tourism statistics;
 CGE data developments;
 impact assessments & legacy work for Commonwealth Games;
 impact assessments & Environment Satellite (Carbon Budget) for Budget 2016-17;
 investigation of PYP Tables;
 next Input-Output User Meeting.

Overarching work
MS illustrated the proposed changes to the publication programme in 2015-16, including
the potential move of O&G statistics to QNAS and the possibility of bringing forward the
publication date for the main estimate of Scottish GDP growth.
Plans to formalise a revisions policy and put this to users were also mentioned as part of
the Unit’s work for the year to come.
7.
AOB
John Dowens (JD) updated the Group on last year’s Capital Investment Survey, saying that
results are now available and would be used in the manual balancing process of the Scottish
Input-Output Tables to inform the estimation of Gross Fixed Capital Formation. JD then
discussed ongoing work to improve the investment figures in QNAS; since last year’s
SESCG meeting, the branch has negotiated access to the ONS’s quarterly Capital Survey
data for reporting units operating in Scotland, and a project is underway to estimate capital
expenditure for Scotland from these new data.
There was no other business raised.
The next annual meeting of the Group would be held around March/April 2016, at a venue
and time to be confirmed.
Mairi Spowage thanked everyone for their advice and contributions.
Scottish Government
Office of the Chief Economic Adviser
24th March 2015