Thank you for your Explanatory Memorandum 16361/07 which was considered by Sub-Committee A at their meeting on 5 February 2008. The Sub-Committee cleared the document from scrutiny but asked me to write to you to request further information on some detail about regional accounts. As you may be aware, the Sub-Committee is currently undertaking an inquiry into the EU Structural and Cohesion Funds, and have identified the poor provision of regional data and accounts in some countries as an issue preventing evaluation and comparison of the Funds' effectiveness. The Sub-Committee would be interested to hear of any work that is being undertaken to improve the collection and provision of regional data, and whether the Government is taking any steps to promote and bring forward this work.

6 February 2008

  Thank you for your letter of 6 February requesting further information on the regional accounts data provided to meet EU requirements for structural funds allocations and future developments in regional accounts.

  Under the European System of Accounts 95 (ESA95) and the current transmission requirements, the Office for National Statistics (ONS) provides regional Gross Value Added (GVA) at a geographical breakdown known as Nomenclature Units of Territorial Statistics (NUTS) 2 level. This breaks the UK down into 37 sub-regions. This requirement applies to all 27 member states of the EU

  Eurostat (the Statistical Office of the European Community) adjusts EU NUTS2 GVA estimates to NUTS2 Gross Domestic Product (GDP) and then applies purchasing power parities (PPPs) to produce regional estimates that are comparable across the EU. These estimates are then used in the allocation of EU Structural and Cohesion Funds.

  NUTS2 estimates are at different stages of development across the EU with some countries having a long history of producing such estimates, while in others they are a more recent development. Eurostat will be using the Regional Accounts Task Force to help monitor NUTS 2 estimates and have offered grants to Member States to develop regional GVA inventories. These will allow Eurostat to assess the quality of the sources and methods that underlie NUTS 2 estimates across the EU. The UK fully supports this approach to improve the quality of EU estimates.

  The full range of regional GVA estimates and a regional GVA methodology guide are available on the ONS website: http://www.statistics.gov.uk/statbase/Product.asp?vlnk=14650

28 February 2008