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Archive
2013-12-17 ONS-001
Office for National Statistics
Network Rail classification
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Publication
Office for National Statistics
Network Rail classification
Classification of Network Rail under European System of Accounts 2010
Author Name(s): Theodore Joloza, Office for National Statistics
Abstract
This article explains the decision by the Office for National Statistics (ONS) to classify Network Rail as a Central Government body in the UK National Accounts and Public Sector Finances. This results from new guidance in the 2010 European System of Accounts (ESA10).
Executive Summary
In January 2013, Eurostat officials visited the UK for one of their biennial Dialogue Visits under the Maastricht Excessive Deficit Procedure (EDP). The UK agreed a number of actions with Eurostat following the visit, one of which was a review by the ONS of the classification of Network Rail (NR) on the basis of updated guidance provided within the 2010 European System of Accounts (ESA10) the revised, ESA10 compliant, Eurostat Manual on Government Deficit and Debt (MGDD).
In conducting its review, ONS identified areas of relevant new guidance which appeared for the first time in ESA10 and MGDD manuals. In general terms, the main changes in the manuals that impact on the classification of Network Rail relate to determining government control over non-profit institutions (NPIs), and the determination of whether a body is either a ‘market’ or a ‘non-market’ producer.
The former aspect – ‘Is the body controlled by government?’ - is important in that it determines whether the body under consideration is included in the calculation of statistics for the General Government sector (comprising mainly, the Central Government and Local Government sectors) such as those on Public Sector Net Borrowing (PSNB) and Public Sector Net Debt (PSND).
The latter aspect – ‘Is the body market or non-market?’ - is important because if the body is found to be controlled by government, this second aspect determines whether the body is included within General Government statistics or within statistics for the Public Corporations (PC) sector. This matters because, while PCs are included in statistics for the public sector as a whole, they are not included in statistics for the General Government sector and so are not included in the main statistics produced for Excessive Deficit Procedure purposes.
Having considered the latest international guidance available in ESA10 and the MGDD, ONS has concluded that Network Rail should be reclassified as a Central Government body, applying this reclassification in all periods from April 2004 when Network Rail became a non market body under the new guidelines. Regulation (EU) No 549/2013 of the European Parliament and of the Council requires that all European member states are compliant with ESA10 in the recording and reporting
of their national accounts by 23 September 2014.
This classification will be implemented within National Accounts, Public Sector Finances and EDP statistics, from 1 September 2014 when ESA 10 comes into force. Until then, ONS is legally required to continue delivering statistics that are compliant with the European System of Accounts 1995.
Extracted from Classification of Network Rail under European System of Accounts 2010 (Office for National Statistics, 17 December 2013)
Railnews Archive ::: 2013-12-17 ONS-001
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