BRITAIN’S building industry was plunged into a bogus slump last year by a computer glitch that deleted 66,500 firms from a list used to compile official estimates of construction output.

In a further blow to Britain’s beleaguered statistics service, the Department for Trade and Industry (DTI) and the Office for National Statistics (ONS) admitted that the error had led to the economy’s growth being understated by 0.1 per cent in the first quarter of last year and overstated by the same amount in the second.

The two departments came clean yesterday, confirming revised figures nearly two years after the error took place. The data now show that construction growth rose 0.5 per cent in the first three months of 2003, rather than falling 2.6 per cent as originally reported. It grew 2.1 per cent in the second quarter, rather than an immodest 5.3 per cent.

The flaw in the DTI’s system arose when its computer program was revised to allow for construction firms that have workforces running into six figures. The computer revised its list of firms, resetting their number of employees from five to six-digit figures.

But any firm that was not on the list it used, which was taken from one specific quarter, was deleted from the whole list by mistake. Some 66,500 out of about 170,000 companies were removed.

The DTI first noticed problems with its figures in May 2003 and took action to fix those errors, a report by the DTI and the ONS said yesterday. But that did not solve the problem, and the full extent of the miscalculation was not completely identified until the end of September this year.

The report said that the DTI would work to improve quality control. Richard Aldritt, chief executive of the Statistics Commission, the government watchdog, said: “Errors will happen, but what we want to see is a rapid response to those errors and we’re a little concerned about the length of time it has taken to identify what the problem was.”

He said the report showed the difficulty faced by the ONS in trying to oversee the statistical work of government departments.

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