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Office for Budget Responsibility
The Office for Budget Responsibility (OBR) is a non-departmental public body funded by the UK Treasury that provides independent economic forecasts and independent analysis of the public finances.
It was formally created in May 2010 following the general election by the Cameron-Clegg coalition government and was placed on a statutory footing in 2011. It is one of a growing number of official independent fiscal watchdogs around the world.
Richard Hughes, former Director of Fiscal Policy at HM Treasury, has been chair since October 2020.
The OBR examines and reports on the sustainability of the public finances and provides analysis and forecasts on the economy at the time of the UK Government's Budget and Spring Statements.
The functions and responsibilities of the OBR are contained within the 2011 Act. It has four main duties:
The OBR produces five-year forecasts for the economy and public finances twice a year. The forecasts accompany the Chancellor's Budget Statement and Spring Statement and they incorporate the impact of any tax and spending measures announced by the Chancellor. Details of the forecasts are set out in the Economic and fiscal outlook (EFO) publications. The annual Forecast evaluation report (FER) published each autumn, examines how the EFO forecasts compare to subsequent outturns. The OBR has published material describing its approach to forecasting the economy and public finances, and the macroeconomic model it uses.
The OBR uses its public finance forecasts to assess the Government's performance against its fiscal targets. The Government has set itself two medium-term fiscal targets: first, a fiscal mandate for the cyclically-adjusted current budget to be below 2 per cent of GDP by 2020-21, and second, a supplementary target to have public sector net debt falling as a share of GDP in 2020-21. In the Economic and fiscal outlook, the OBR assesses whether the Government has a greater than 50 per cent probability of hitting these targets under current policy. Given the uncertainty inherent in all fiscal forecasts, the OBR also tests how robust this judgement is by using historical evidence, sensitivity analysis and alternative scenarios.
The OBR conducts scrutiny and analysis of HM Treasury’s costing of tax and welfare spending measures. During the run-up to the Budget and the Spring Statement, the OBR subjects the Government's draft costings of tax and spending measures to detailed challenge and scrutiny. These are then stated in the EFO and the Treasury's policy costing documents with the OBR stating whether it endorses the costings that the Government finally publishes as reasonable central estimates. The OBR also assigns each certified costing with an uncertainty rating based on data quality, modelling and behavioural response. In March 2014, the OBR has published a briefing paper describing its role in policy costings and how they fit into the forecast process.
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Office for Budget Responsibility
The Office for Budget Responsibility (OBR) is a non-departmental public body funded by the UK Treasury that provides independent economic forecasts and independent analysis of the public finances.
It was formally created in May 2010 following the general election by the Cameron-Clegg coalition government and was placed on a statutory footing in 2011. It is one of a growing number of official independent fiscal watchdogs around the world.
Richard Hughes, former Director of Fiscal Policy at HM Treasury, has been chair since October 2020.
The OBR examines and reports on the sustainability of the public finances and provides analysis and forecasts on the economy at the time of the UK Government's Budget and Spring Statements.
The functions and responsibilities of the OBR are contained within the 2011 Act. It has four main duties:
The OBR produces five-year forecasts for the economy and public finances twice a year. The forecasts accompany the Chancellor's Budget Statement and Spring Statement and they incorporate the impact of any tax and spending measures announced by the Chancellor. Details of the forecasts are set out in the Economic and fiscal outlook (EFO) publications. The annual Forecast evaluation report (FER) published each autumn, examines how the EFO forecasts compare to subsequent outturns. The OBR has published material describing its approach to forecasting the economy and public finances, and the macroeconomic model it uses.
The OBR uses its public finance forecasts to assess the Government's performance against its fiscal targets. The Government has set itself two medium-term fiscal targets: first, a fiscal mandate for the cyclically-adjusted current budget to be below 2 per cent of GDP by 2020-21, and second, a supplementary target to have public sector net debt falling as a share of GDP in 2020-21. In the Economic and fiscal outlook, the OBR assesses whether the Government has a greater than 50 per cent probability of hitting these targets under current policy. Given the uncertainty inherent in all fiscal forecasts, the OBR also tests how robust this judgement is by using historical evidence, sensitivity analysis and alternative scenarios.
The OBR conducts scrutiny and analysis of HM Treasury’s costing of tax and welfare spending measures. During the run-up to the Budget and the Spring Statement, the OBR subjects the Government's draft costings of tax and spending measures to detailed challenge and scrutiny. These are then stated in the EFO and the Treasury's policy costing documents with the OBR stating whether it endorses the costings that the Government finally publishes as reasonable central estimates. The OBR also assigns each certified costing with an uncertainty rating based on data quality, modelling and behavioural response. In March 2014, the OBR has published a briefing paper describing its role in policy costings and how they fit into the forecast process.