Statistics watchdog raps Government over personal tax summaries

Sir Andrew Dilnot, head of the UK Statistics Authority (Rex Features)

The official statistics watchdog has fired a warning shot across the bows of the Treasury over the controversial letters the Government has sent to 24 million people detailing how their taxes are spent.

In its own letter published earlier this week Sir Andrew Dilnot, the head of the UK Statistics Authority, draws attention to several questionable features of the missives.

Sir Andrew, who is charged with guarding the integrity of official data, does not explicitly censure the Treasury but a source close the authority said the very act of sending the letter, which was copied to Financial Secretary to HMRC David Gauke, meant ministers’ cards have “been marked” over future communications on public expenditure.

The Government has already been criticised by the independent Institute for Fiscal Studies for lumping together, in the letters, diverse items of public expenditure such as the pensions of public sector workers and social care for the elderly under a broad heading called “welfare”. Some have also accused Conservative ministers of seeking to exaggerate the size of state welfare spending in order to generate public support for the Party’s plans to cut this area of expenditure sharply in the next Parliament.

The letter from Sir Andrew notes that it is “good practice” for public bodies to “clearly define” category labels on numerical data and to “include contextual information”. The Treasury’s letters sent out by the Government fail to do this. Sir Andrew also notes that when George Osborne originally came up with the concept of the personalised letters in 2012 the Treasury’s worked examples included a breakdown of state welfare spending into sub-categories such as “old age” and “housing”. The department also broke down “public order and safety” into spending on the police, courts, prisons and the fire service. In the letters that have actually been sent out all of that spending, including for the fire service, is simply described as “criminal justice”.

“Worse things have been done by the Government and worse things undoubtedly will be done in future but this marks their card” said the source close the UK Stats Authority. “Taking ‘social protection’, which is a clearly defined statistical category, and just subtracting the state pension, which is what they’ve done, is pretty funny.”

Sir Andrew’s letter was addressed to Will Moy of the Full Fact website, who had asked the UK Statistics Authority to state what context should be included in Government summaries of tax expenditure. The Permanent Secretary to the Treasury, Sir Nicholas Macpherson, was also copied into Sir Andrew's reply.

In the letter, Sir Andrew welcomes the use of graphics and summaries to “bring statistics to life”. But he adds that he “can see an argument” the Treasury’s “criminal justice” category would be better named “public order and safety”. He also notes that “some might argue” spending on teachers’ pensions should be regarded as part of education spending, rather than “welfare”.