The government’s statistics agency is spending £8m to hire an army of low-paid temporary workers amid efforts to fix its “virtually unusable” data on employment in Britain.

Under pressure over the quality of its data, the Office for National Statistics last month agreed the multimillion-pound deal with the employment agency Randstad to recruit interviewers to help increase the reliability of its labour force survey (LFS).

Providing monthly snapshots on jobs, the survey is one of the most important datasets used by the government and the Bank of England when setting interest rates and taking decisions affecting millions of households.

However, economists warn policymakers are “flying blind” amid issues with the survey caused by low response rates, which the ONS admitted last month could take until 2027 to fix.

In a separate setback on Thursday, the ONS said it would delay an update of its inflation dataset amid efforts to incorporate millions of grocery prices captured by supermarket checkout scanners. Saying it was “prudent” to delay given the importance and complexity of the data, it explained that a planned launch in March had been delayed by a year.

With the Bank of England facing a crunch decision on interest rates on 6 February, Andrew Goodwin, the chief UK economist at Oxford Economics, said: “We think that valid concerns about the quality of data from the UK’s labour force survey make it virtually unusable at present … policymakers are flying blind without reliable data.”

Under the terms of the £8m contract, the ONS will use Randstad to hire field interviewers, who drive to knock on the doors of homes across Britain, nudging people to complete its online surveys.

The government statistics agency will use 148 agency staff recruited through Randstad to add to its 549-strong permanent workforce. It is also plans to use the recruitment firm Alexander Mann Solutions to hire about 200 face-to-face interviewers by the end of May 2025.

Online job postings by Randstad advertise pay of £12.55 an hour for driving field agents for 22-30 hours a week for a minimum of three months, just above the £12.21 level the national living wage will rise to from April. Wages of £14.85 are being advertised for the role in London.

However, unions representing ONS staff said the recruitment drive reflected deep-rooted problems at the Newport-based agency, including low pay, cuts from government and battered staff morale.

Fran Heathcote, the general secretary of the PCS trade union, said: “Rather than giving huge sums of money to an agency to provide what would be a temporary fix, ONS management would be better investing in addressing long term recruitment and retentions issues.”

Union leaders said a focus on cost-cutting and high staff turnover had contributed to the problems with the LFS, highlighting a 25% annual turnover rate among permanent staff, as well as internal staff surveys showing dissatisfaction with management and pay.

“They need to wake up and smell the coffee,” said Nik Males of the Prospect trade union. “Political and economic decisions are being made on the back of data that could be gathered more effectively.”

Economic survey response rates have steadily fallen in the UK and the US, and collapsed during Covid lockdowns when face-to-face interviews were paused. The ONS is also moving to prioritise online surveys.

Having fallen from about 40% in 2019 to as low as 12.7% in 2023, rates have recovered to about 20%. However, this still means about 47,000 responses are being used to estimate the working arrangements of 45 million people.

The latest figures published on Tuesday showed a rise in unemployment, in one of the most closely watched data releases before the Bank of England’s rate decision.

Randstad said it was committed to providing workers with competitive pay and benefits that meet or exceed industry standards.

An ONS spokesperson said it was responding to the challenge of falling survey response rates in several ways, including recruiting more interviewers, as it prepared to launch a “transformed labour force survey” as a long-term solution.

“As a new self-completion survey it has taken time to fully develop, to ensure we are achieving the quality necessary for users. We recently tested a shorter version of the questionnaire aimed at further improving data quality. We will provide an update on next steps in the spring.

“We strive for an honest and inclusive culture that encourages staff to feed back where challenges exist, so we can respond and move forward collectively. That is why we recently commissioned a lessons learned review to ensure the views of those involved in the Transformed Labour Force Survey project were heard.”

• The image on this article was replaced on 23 January 2025. A previous image was captioned as being of the Office for National Statistics building in London, but was actually of a former ONS building.