Outlook: ONS cost cutting

MANAGEMENT consultants are often brought in to reach an obvious conclusion, and KPMG's report on opportunities for cutting costs at the Office for National Statistics seems no exception - contract-out and downsize. After a pause of a few days for "consultation" the Treasury will embrace the idea of bringing in the private sector to collect official data. The justification is that the ONS could save money and concentrate on the analysis of the raw data, where it has a huge advantage.

But it will be a terrible mistake. For one thing, consumers and businesses are far less likely to want to give personal or commercial information to private sector organisations. Although there has been a successful experiment in contracting out the collection of retail price figures, these do not have the sensitivity of much of the information the ONS is collecting. Will anybody want to send in their census forms to commercial market researchers in 2001?

More fundamentally, the mass of economic and social statistics collected by the ONS are a crucial public good in a modern economy. Providing top quality, impartial statistics is one of the essential tasks of government in an age when information is a vital source of competitive advantage. It is essential to the transparency and accountability of government, too, which is something the Chancellor for one keeps emphasising as a precondition for economic success.

Britain probably has better quality and better value for money statistics than any other country in the world. For all the problems with the average earnings figures - suspended after two sets of radical revisions last autumn and now due to be relaunched this month - other industrialised countries apart from the US provide far poorer figures.

The ONS has not helped its case with the disastrous presentation of the changes it was making to the earnings figures. Nor does it have the most harmonious of relationships with its two most important customers, the Treasury and the Bank of England. Even so, the Treasury ought to be announcing a bigger budget and more staff for the beleaguered statisticians. It should also opt for the most independent option for the ONS when the decision on the options in last year's statistics white paper is announced. Cheeseparing on the information so crucial to government and business is a false economy, a real management consultant's solution.