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The interim Office for Budget Responsibility (OBR) has published its formal advice to the Chancellor on how it should be established on a permanent basis, recommending that ties with the Treasury be loosened to help accentuate the body’s independent status.
In a letter to George Osborne, OBR officials Sir Alan Budd, Geoffrey Dicks and Graham Parker make a number of proposals, as required by the office’s terms of reference. The main points of are:
- The OBR should produce forecasts for the economy and public finances.
- Forecasts should be produced at least twice a year and include the official Budget forecast.
- The OBR should undertake broader analysis of fiscal sustainability.
- The technical independence of the office should be enhanced through the transfer of analytical capacity from the Treasury to the OBR.
- The OBR should employ a mix of external recruits and workers seconded from the Treasury to produce forecasts and analysis.
- Parliament should have a role in the appointment of the members of the Budget Responsibility Committee.
- The OBR should be located outside the Treasury building.
‘We are… able to state, without reservation, that there was no ministerial involvement in [our] forecasts at any stage. However the fact that we were operating in the Treasury and relying on official resources has raised doubts about our independence in some quarters,’ says the OBR in its letter to the Chancellor.
Sir Alan Budd, chair of the interim budget responsibility committee, acknowledged that the body’s suggestions would ‘inevitably take time to settle in, but I am confident that the OBR will play a substantial part in enhancing the quality of fiscal policy-making.’
