Budd will head fiscal watchdog
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The coalition Government is to create an independent fiscal watchdog with responsibility for growth and public finance forecasting.
The Office for Budget Responsibility, with Sir Alan Budd named as interim head, will provide forecasts on growth, public borrowing figures and estimates of future Government liabilities.
The body will produce new forecasts in time for next month’s emergency Budget on June 22.
The Treasury says the Chancellor will accept forecasts from the OBR for Budgets and pre-Budget reports to “ensure that policy is made on an unbiased view of future prospects, improving confidence in the fiscal forecasts”.
The Treasury will provide the OBR with full access to the data and analysis necessary to scrutinise public finances. Under the arrangement, the Chancellor will retain responsibility for fiscal policy and will set his target for fiscal policy.
In each Budget and pre-Budget report, the OBR will confirm whether the Government’s policy is consistent with a better than 50 per cent chance of achieving the forward-looking fiscal target set by the Chancellor.
Budd has recommended that the Treasury appoint Geoffrey Dicks and Graham Parker to create a three-member Budget responsibility committee. The Queen’s Speech will provide for legislation to establish the OBR on a permanent basis.
Budd says: “It is quite remarkable the Chancellor has given us the authority to produce independent forecasts for the Budget and pre-Budget report and to provide a public assessment of the action needed to achieve his fiscal mandate, and I consider it the most exciting challenge of my professional life.”
Lansons director of regulatory consulting Richard Hobbs says: “The Office for Budget Responsibility potentially has some overlap with the Nat-ional Audit Office and I suspect that there will be some elements of the NAO transferring to this new office, such as its value-for-money role.”
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