The power of soft power

Ed Humpherson, director general for regulation, UK Statistics Authority on regulating with soft power, and the surprising effectiveness of public disclosure.

The Office for Statistics Regulation oversees the production and dissemination of statistics by public bodies. We do so by establishing a Code of Practice, and then reviewing compliance with that Code.

Where statistics meet the highest standards of trustworthiness, quality and value, we award the status of National Statistics. We suspend or do not award the National Statistics status unless these standards have been met. For example, for economic statistics, we have de-designated the UK’s trade statistics and the CPIH measure of inflation because of concerns about quality; and for social statistics, we have de-designated police recorded crime in England and Wales because of concerns about the reliability of police recording practices.

The UK Statistics Authority is “different”

The line I’d prepared for the Governance Trap ran something like this: “The UK Statistics Authority is different. We’re not a regulator in the traditional sense. We have an important role. But we don’t have much to contribute to a gathering of regulators with strong statutory enforcement powers discussing governance.”

As so often happens with prepared lines, this position didn’t survive the first contact with the discussion. This was for two reasons.

Governance is at the heart of our process of designation as a National Statistic. We look for trustworthiness, quality and value.

First, because – as I realised – it’s the norm at gatherings of regulatory bodies for each regulator to begin by saying “of course we’re a little bit different”. This claimed difference shows that the landscape of regulatory bodies is rich and heterogeneous. It implies that the textbook model of a regulatory cycle (policy and standards leading to compliance leading to enforcement, which in turn informs changes in policy and standards) is an abstraction, a composite picture made up of a wide variety of different approaches and frameworks, very rarely spotted in its textbook incarnation in the wild.

Second, because as the discussion went on, it seemed as though the model we have at the UK Statistics Authority may have more to offer on governance than I’d initially thought.

Defining governance by trustworthiness

Governance is at the heart of our process of designation as a National Statistic. We look for trustworthiness, quality and value.

The first of these three outcomes, trustworthiness, is explicitly concerned with governance. We look for the systems and processes within Government bodies that ensure that the statistics are free from vested interests – that they represent the best professional judgement of statisticians.

These elements of governance include full control and sign off of content (i.e. without policy interference); commitment to pre-announced publication dates; and separate media communications (i.e. separate from the main departmental media operations). These and other aspects of organisational process are measurable, and drive our judgement on the trustworthiness of a specific set of statistics.

Then power of disclosure

In effect, this is all about the deployment of a soft power: the power of voicing concerns publicly.

But our approach goes wider. There are occasions when public confidence in official statistics is lower than it could be – not so much because of the governance processes, but because of the other two aspects that we review: quality and value. In terms of quality, statistics can represent a misleading measurement, and this undermines confidence. And in terms of value, the way that statistics are used in public discourse can undermine their value. As a result, we comment publicly on the use of statistics – for example, we recently highlighted concerns about a tweet issued by the Department for Education in relation to policy proposals related to selective schools; and we also commented on statements made by Ministers on NHS funding.

The power of soft power

The key thing about this model is that it features virtually nothing by way of a formal enforcement power. There is no power to fine a producer of statistics, to compel or prevent them from doing anything. Yet we have been able to create a set of incentives that have encouraged Government bodies to treat official statistics with respect. This hasn’t always worked, of course, but in general Government departments want to comply with our Code and to avoid our public criticism.

In effect, this is all about the deployment of a soft power: the power of voicing concerns publicly, and the power of the National Statistics brand as a signifier of compliance with high standards.

Linking soft power with governance

And it’s here that governance is really relevant: these soft powers depend on governance mechanisms that take good practice seriously: Heads of Profession for statistics as senior figures in Government departments; Permanent Secretaries as the senior accountable civil servant; and Parliamentary scrutiny that looks for Government departments to comply with our standards. These governance mechanisms combine to create a mutually reinforcing set of expectations of good use of statistics.

So by the end of the Governance Trap session, I realised that my prepared line was almost wholly wrong. Like every regulator, governance is central to our capacity to create positive change; we rely on soft, reputational incentives to support this change; and, like every regulator, we offer a bespoke twist on the standard regulatory model. In short, we’re different. Like everyone else.

‘The Governance Trap: Tracking Behaviour and Change’ is the second event in a series of collaborations between Solvency II Wire and the Centre for Analysis of Risk and Regulation (CARR) at the London School of Economics.

The event was held in London on 3 November 2016, hosted by   Dentons.
If you’d like to learn more about or read articles from the first event in this series, The Governance Trap and the Future of Regulation, please click here.

To receive the next article in the series directly to your inbox and subscribe to the Solvency II Wire mailing list for free, click here.

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