1. The new London Business Survey:
Methodology
Sarah Levy
29 September 2015

2. Overview
The London Business Survey (LBS) 2014 is a new, experimental survey
ONS was commissioned to design and run it, providing a service to the GLA which would ‘own’ the data
It was funded by the London LEP (SME Working Group)
The survey took place in March-April 2014 (pilot stage) and in May-July 2014 (main stage)
The reports (including an ONS Methodology Report) were published on 10 November on
The 250+ data tables are available on the London Datastore
This presentation will look at survey methods and response

3. Why was the LBS commissioned?
London generates over 1/5th of the UK’s GDP
Mayor of London needed more information
How many businesses are there in London?
Why have they chosen London?
How much do London businesses export?
Can SMEs get enough finance?
What is the outlook for business growth?

4. Why was it run by the ONS?
A key requirement of the client (the GLA) was for the survey to be representative of the population of private sector businesses in London
ONS offered to draw a sample from the Inter- Departmental Business Register (IDBR)
The results can be linked to data from official business surveys and to the IDBR itself – within the Virtual Micro- data Laboratory (VML)
ONS proposed an innovative survey design (experimental) to produce results for London, which is much harder than producing UK results
An organisation will be on the IDBR if it is registered for Value Added Tax (VAT), and/or pays employees through a Pay As You Earn (PAYE) scheme and/or is an incorporated business registered at Companies House.
The IDBR is normally only accessible to central government departments
Some very small businesses, self-employed people and non-profit-making organisations are not on the IDBR as they are not registered in any of these ways.
There is no sampling frame for unregistered businesses (by definition).

5. Illustration of the population

6. Multi-site businesses
Head Office inside London
& sites only in London 
Head Office inside London
& sites everywhere 
Head Office outside London
& sites everywhere 

7. The sample
We decided to sample at site (Local Unit) level instead of head office (Reporting Unit/enterprise) level
We drew a sample of 10,000+ sites from a population of 444,870 in the IDBR (relevant industry sectors, May 2014)
The sample was a stratified simple random sample with 36 ‘main strata’ based on:
The size of the enterprise to which the site belonged:
Micro enterprises: 0 to 9 employees
Other SMEs: employees
Large enterprises: 250+ employees
The LBS industry sector of the site (12 sectors)...

8. Designing the LBS: Industry sectors#
LBS industry sector name
SIC07 section/division 1
Manufacturing
Section C 2
Construction
Section F 3
Wholesale (including motor trades)
Section G: divisions 45 and 46 4
Retail (excluding motor trades)
Section G: division 47 5
Transport and storage
Section H 6
Accommodation, food, travel and tourism
Section I plus division 79 7
Information, communication, arts, entertainment and recreation
Sections J and R 8
Financial and insurance activities
Section K 9
Real estate, architecture and engineering services, services to buildings and landscape activities
Section L plus division 71 plus division 81 10
High value business support including legal, accounting, head office, management, advertising, market research
Section M excluding divisions 71, 72 and 75 11
Other administrative and support services including employment agencies and security services; and other service activities
Section N excluding divisions and 81; plus section S 12
Human health and social work activities, scientific R&D and veterinary activities
Section Q plus divisions 72 and 75
Sector 7 is similar to ‘creative industries’ – but not identical
Sector 12 is similar to ‘life sciences’ – but not identical
Note: Sections A, B, D, E, T and U are excluded because they are a very small part of the London business economy. Sections O and P were excluded because they are predominantly public sector.

9. The questionnaires We sent out 3 questionnaires:
Form 1: Head office level questions only for head offices in multi- site enterprises (approx 2,800)
Form 2: Site level questions only for sites in multi-site enterprises (approx 4,000)
Form 3: All questions (head office and site level) for single site enterprises (approx 6,000)
Total number of forms = nearly 13,000
The questionnaires contain two types of question –
Categorical (yes/no) & multiple choice e.g. choices, attitudes
Numeric (values) e.g. no. of employees, value of sales, turnover

10. The results
Results are reported for number (or %) of business units (sites), even if the data was collected from related head offices
Results are weighted up to the population in the IDBR, May 2014:
All results include breakdowns by
size of the enterprise to which the business unit belongs (micro, other SME and large)
LBS industry sector

11. Response We received the following numbers of valid responses:
2,620 responses for site level questions (26% response rate)
3,326 responses for head office level questions (33% response rate)
Site level question responses come from single site enterprises as well as multi-site enterprises; ditto for head office responses.

12. Survey metrics
Site level question responses come from single site enterprises as well as multi-site enterprises; ditto for head office responses.

13. Reliability There are two types of error to be aware of...
Sampling error: does the estimate from the sample reflect the ‘true value’ in the population?
95% Confidence Intervals (CIs) were produced for all of the results – users should take note!
95% CIs indicate that if the survey were repeated again and again, 95% of times the true value would lie between the upper and lower 95% confidence limits
Non-sampling error:
Non response - in particular we had difficulty reaching sites belonging to large firms in financial and insurance services
Mistakes by respondents - in particular reporting values for whole business rather than selected site (turnover, sales etc)

14. Conclusion
The survey design based on selecting sites does work well for sub-national areas like London
By collecting information directly at site level, we avoid the need to apportion values such as turnover and sales to regions
Some improvements needed if the survey is run again:
Use data from the 2014 survey to fine tune the survey design in order to improve precision of estimates (reliability)
Automate the system for handling duplicate forms
Improve instructions for turnover (etc) questions to emphasise reporting for the selected site, not for the business as a whole
Try to boost response rates for sites in large multi-site firms (in particular those in the financial and insurance services sector)
Build in time for validation of responses through re-contacting respondents