4th Report - The Office for Budget Responsibility: Time for change?

conclusion The Office for Budget Responsibility has attracted criticism and calls for reform when fiscal space is limited. However, economically strained circumstances are the very time when an independent voice within the fiscal framework requires protection rather than castigation. Such calls for reform have apparently been driven by the desire to provide additional spending capacity for successive governments. However, reforming forecasts and forecaster is a poor substitute for developing coherent economic policies and making tough calls, when required.

conclusion The OBR should continually seek to improve its forecasts and economic modelling, especially by incorporating a new, additional medium-term 10-year forecast. To encourage greater consideration of the overall fiscal position, the Government should provide parliamentary time to debate the Fiscal Risks and Sustainability report. Policymakers though must resist the temptation to blame the messenger when confronted by politically difficult decisions in a fiscally constrained space.

conclusion Bearing in mind the current economic context, we reject the siren calls for immediate, fundamental reform to the position and independence of the OBR. The potential reform of the OBR must be subject to a high bar, given the risk of undermining both its actual and apparent independence at a time when markets are especially sensitive to levels of government debt. That bar has not been met. 15