Session 1 – Use of profiling for public administrationLinda Scott

Head of Business Register Operations

UK

IDBR What is it?

• The IDBR (Inter Departmental Business Register)– Statistical business register– Complies with EU standards– 2 million enterprises (businesses)– 2.5 million local units (sites)– 98-99% of UK economic activity– Source for over 150 regular surveys– Used as an analysis tool

Distribution of Enterprises (2008)

Agriculture, forestry & Fishing 7.2%

Production 6.8%

Construction 11.6%

Transport industries 3.1%

Wholesaling and dealing 5.2%

Retailing 9.2%

Finance 1.6%

Catering 6.3%

Motor trades 3.3%

Property & Business 31.8%

All other services 13.9%

All industries 100%

Sources of data for the IDBR

• HM Revenue and Customs– VAT traders– Intrastat traders (identified by VAT reference)– PAYE employers

• Companies House - Company registrations• Dun and Bradstreet - Worldbase linkages• ONS (and Northern Ireland) surveys• Construction and farms surveys

Data Held on the IDBR

• Name, address, geographic codes• Size (employment / turnover)• Economic activity (UK extensions of both

NACE Rev 1.1 and NACE Rev 2)• Legal status (company, sole proprietor, etc)• Birth and death dates• Survey selection and response history

Enterprises operating in only in one region

Employment Size band

Private Sector and Public

Corporations

Central Government

Local Government

Total

1-19 1,983,592 73 2,314 1,985,979

20-49 62,261 45 297 62,603

50-99 16,501 50 168 16,719

100-249 7,092 81 324 7,497

250+ 2,509 236 91 2,836

Total 2,071,955 485 3,194 2,075,634

Enterprises operating in more than one region

Employment size band

Private Sector and

public corporation

s

Central Govern

ment

Local Governm

ent

Total

1-19 10,610 1 151 10,762

20-49 6,873 6 35 6,914

50-99 5,000 16 16 5,032

100-249

4,934 25 36 4,995

250+ 5,239 384 436 6,059

Total 32,656 432 674 33,762

What is profiling?

• Profiling is a method for analysing the legal, operational and accounting structure of an enterprise group at national and world level

• in order to establish the statistical units within that group and their relationships, and

• to create and maintain the most efficient structures for the collection of statistical data.

Experience of Profiling

• UK has many years experience of profiling:– 1984 – move suggested from establishment (local

unit) to legal unit reporting– 1987 – review indicated that legal unit reporting

was not suitable for complex businesses – profiling of private sector started

– 2004 – comprehensive surveying of public sector starts following review of economic statistics

• ONS has retained a profiling team since 1987.

Current criteria for profiling

• Private sector enterprises with 250+ persons employment with secondary activity of 125+ persons employment.

• Local Authorities with 3000+ employment.• Central Government with 2500+ employment.• Referrals because of survey response

problems, often through mergers and takeovers.

• Approx 2500 cases fall within the criteria, all profiled within a 4 year rolling programme.

Tools used in profiling

• A computer generated template identifies existing enterprises and their legal units, local units and their reporting structures within domestic enterprise groups.

• A further tool permits graphical presentation of the legal unit tree structure.

• A separate template provides communication of the results of profiling in structured form to all users.

Why profile Local Authorities and Central Government

• Recommendations from the Review of Statistics for Economic Policy-making by Christopher Allsopp 2004 to improve the range and usefulness of economic data produced by the ONS.

• Project set up in the Business Registers Unit (BRU) to look specifically at the treatment of the large complex businesses including local authorities and central government.

Criteria for Local Authorities and Central Government

• Structures differ from private sector

• Initial concerns about the management of schools led to a focus on local authorities where employment was being reported incorrectly

Reasons for the local authority employment problems

• Local authorities gave limited autonomy to schools who set up their own payroll schemes.

• This was aggravated by increases in the use of casual staff, e.g. supply teachers.

• This led to confusion in completing the Business Register Survey which updates the IDBR and the Monthly Wages and Salaries Survey

Current situation

• This led to the creation of an employment based trigger for selection; ratio of taxed employees (PAYE) to survey employees outside the range 0.9 and 1.1.

• Used for both local and central government.

Diagram of Local Authority

ENTERPRISE 1

RU FORTHE WHOLE OF ENTERPRISE 1

ISRU FORSCHOOL A

ISRU FORSCHOOL B

ISRU FORSCHOOL C

ISRU FORSCHOOL D

ISRU FORSCHOOL E

SITE OF SCHOOL

A

SITE OFSCHOOL

B

SITE OFSCHOOL

C

SITE OFSCHOOL

D

SITE OFSCHOOL

E

SITE OFTOWN HALL

SITE OF LIBRARY

SITE OF HOUSINGOFFICE

SITE OF HOSPITAL

SITE OF PARKS DEPT

PAYE FOR SCHOOL A

PAYE FOR SCHOOL B

PAYE FOR SCHOOL C

PAYE FOR ALL

EMPLOYEES EXCEPT

SCHOOLS

PAYE FOR SCHOOL D IN ENTERPRISE 2

OUTSOURCEDPAYROLL PROVIDER

PAYE FOR SCHOOL E IN ENTERPRISE 3

OUTSOURCEDPAYROLL PROVIDER

Industrial Classification Issue

• Business Register Survey responses have highlighted the issue of misclassification of schools between primary and secondary education.

• Coding is now based on the business descriptions returned by the local authority

• An automated coding tool is used Automatic Coding Text Recognition (ACTR).

• ACTR knowledge based updated for the differences in educational establishments.

Other issues for public sector profiling

• Arms Length Management Organisations set up by the local authority (LA) to manage building and maintenance of any property that they own.

• Private Finance Initiatives (PFIs) – provides a way of funding major capital investments. Works like a joint venture. Consists of a partnership between LA bodies, Health Authorities and construction companies

Success of profiling

• Correct structure means benefits to survey response and coherence of national statistics

• Lessens the burden on the business

• Methodological Report concludes that business profiling is an important tool in ensuring the integrity of the IDBR both in accuracy and quality.

Final Comments

• Any questions on how UK Profile?

• Any questions on example used?

• Any other questions?