UK economic policy built on shaky statistics, insiders warn

Westminster’s latest budget from Chancellor John Healey is packed with grim figures and costly measures, but the data underpinning it may be far less reliable than politicians admit. The forecasts Healey relied upon are almost certain to be revised by the next fiscal event, and a POLITICO podcast has uncovered deep doubts about the numbers governing the UK. Immigration, employment, homelessness and even school meals data have all been shown to contain significant errors.

The Office for National Statistics (ONS) has repeatedly struggled to count immigration accurately. For decades, the International Passenger Survey (IPS) used people with clipboards at airports, train stations and ports to ask about intentions to stay. Between 2012 and 2020, EU nationals coming into the country were off by 76 percent, or 93,000 people a year. The ONS discovered the error only after trialing a new approach, and the IPS was dropped altogether in 2025.

The replacement method, combining Home Office data, Department for Work and Pensions information and tax receipts, was also wrong in the year to June 2023. The ONS initially reported net migration of 672,000 in November 2023, but a year later admitted the figure was actually 906,000. Laura Gilbert, who ran data science in No. 10 Downing Street until last year, said politicians often use the first number that comes out, which is the worst one. She added that the way migration numbers are calculated is highly spurious.

Labour Force Survey undercounts workers

The Labour Force Survey (LFS), which measures employment and young people out of work, is also beset with issues. Between 2019 and 2024, the LFS missed 1 million workers, according to the Resolution Foundation think tank, because people with full-time jobs are less likely to answer the phone to surveyors during the week. The Office for Budget Responsibility (OBR) admitted this week that the survey is too unreliable to measure productivity, citing falling response rates that make it difficult to estimate the number of workers and hours worked.

Healey and Prime Minister Andy Burnham have vowed to get welfare spending down, with much resting on getting young people into work. But Gilbert said Healey’s claim of 1 million young people out of work is unlikely to be accurate. The NEETs figure, covering those not in education, employment or training, is based on a subset of the LFS that is particularly susceptible to inaccuracies. Gilbert said being within 50,000 on either side of that number is very unlikely, calling it entirely spurious.

Ben Warner, who set up 10DS, Downing Street’s data science unit, said the LFS cannot accurately measure the number of entrepreneurs arriving in the country, making it difficult for ministers to know if decisions like tax relief for founders encourage people to the UK. Warner said he is willing to bet a hundred quid that accurate numbers do not exist at the level needed for thoughtful policy. He also noted that ministers do not necessarily have access to people with very good knowledge of economic statistics.

Data problems extend beyond the economy

The uncertainty extends to inflation and GDP projections. The OBR’s budget assessment gives a one in five chance that inflation in 2027 will be over 4.5 percent, and the same chance it will be under 2.5 percent. Warner described the situation as mental, saying we are discussing the uncertainty of the numbers and pretending that they are real. Gilbert explained that problems with net migration and workforce data bleed into inflation and GDP projections, because migration tells about demographics and an undercounted workforce makes it look like there are more unemployed.

Even school meal statistics may be unreliable. Government figures from the start of this year show just over 2.2 million pupils in England on free school meals, more than a quarter of all children. Gilbert warned that these numbers are likely overestimated because schools game the system when census data is collected. Schools get funding based on how many children are on school meals, and parents may receive a text saying not to send a packed lunch.

Burnham’s flagship promise as prime minister is to end homelessness in the UK, and Wednesday’s budget put £432 million towards it. But rough sleeper counting varies by council: some rely on estimates, others on street counts conducted on a particular day in autumn. Some councils have swapped between methods, which can make it look like a dramatic reduction in rough sleepers year to year. In 2017, Brighton and Hove Council used an estimate of 176 rough sleepers; the following year, a street count on a snowy night found only 68, making it appear the number had more than halved.