Office for Budget Responsibility
Encyclopedia
The Office for Budget Responsibility provides independent economic forecasts as background to the preparation of the UK budget
. It was formally created in May 2010 following the general election, although it had previously been constituted in shadow form by the Conservative party opposition in December 2009, and was placed on a statutory footing by the Budget Responsibility and National Audit Act 2011
.
The office is currently headed by Robert Chote
, formerly a director at the Institute for Fiscal Studies
.
, the Chancellor of the Exchequer
of the Conservative-Liberal Democrat coalition formed after the 2010 general election, announced the body in his first official speech. He criticised the economic and fiscal forecasts of the previous Labour government
, and announced that the OBR would be responsible for publishing these independently of government in future. According to the Treasury, the OBR will not be a large team. The Treasury will continue to carry out most of the work of economic forecasting
. The role of the Office is to advise whether the declared policy of the Government is likely to meet its targets.
The OBR was initially chaired by Sir Alan Budd who, along with Geoffrey Dicks and Graham Parker
, formed the Budget Responsibility Committee. Budd had been a founding member of the MPC
; Dicks was chief economist at Novus Capital and former chief economist of the Royal Bank of Scotland
; and Parker headed up the Treasury
’s public sector finances team. The remainder of the initial team comprised eight staff seconded from the Treasury. The initial team planned to recommend the eventual size of the Office.
Colin Talbot
, Chair of Public Policy and Management at Manchester Business School
and Treasury adviser on public spending, questioned the credibility of the new organisation. He said that the body could not be set up in time to judge the forecasts in the June 2010 United Kingdom Budget
. In his opinion, the OBR would not be sufficiently independent of politicians or the Executive
to remove the politics from economic decision-making. The office made adjustments to its forecasts in the week before the June 2010 budget. These were thought to be politically favourable to the coalition government and so cast doubt on its independence.
In July 2010 it was announced that Budd would not continue in the role after his initial 3-month contract expired. The Financial Times
reported "His departure was expected and Sir Alan had let it be known privately that he had never intended to serve as chairman of the OBR for anything other than a short period. His contract spanned the emergency Budget, leaving enough time thereafter to advise on the legislation needed to establish the OBR on a permanent basis." Speculation on his successor had included Rachel Lomax
, John Gieve
, Andrew Dilnot
, Robert Chote
, Michael Scholar
and Ruth Lea
.
In September 2010, Chancellor George Osborne announced that Robert Chote had been appointed as the new Chairman.
United Kingdom budget
The United Kingdom budget deals with HM Treasury budgeting the revenues gathered by Her Majesty's Revenue and Customs and expenditures of public sector departments, in compliance with government policy.Adjustment is achieved with the GDP deflator....
. It was formally created in May 2010 following the general election, although it had previously been constituted in shadow form by the Conservative party opposition in December 2009, and was placed on a statutory footing by the Budget Responsibility and National Audit Act 2011
Budget Responsibility and National Audit Act 2011
The Budget Responsibility and National Audit Act 2011 is an Act of the Parliament of the United Kingdom. It provides a statutory footing for the already-established Office for Budget Responsibility, and requires the treasury to set out its approach to fiscal policy in a Charter for Budget...
.
The office is currently headed by Robert Chote
Robert Chote
Robert Chote is a British economist and current chairman of the Office of Budget Responsibility.-Education:Chote completed his secondary education at St Mary's College in Bitterne Park, Southampton...
, formerly a director at the Institute for Fiscal Studies
Institute for Fiscal Studies
The Institute for Fiscal Studies is an economic research institute based in London, United Kingdom which specialises in UK taxation and public policy...
.
History
George OsborneGeorge Osborne
George Gideon Oliver Osborne, MP is a British Conservative politician. He is the Chancellor of the Exchequer of the United Kingdom, a role to which he was appointed in May 2010, and has been the Member of Parliament for Tatton since 2001.Osborne is part of the old Anglo-Irish aristocracy, known in...
, the Chancellor of the Exchequer
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
of the Conservative-Liberal Democrat coalition formed after the 2010 general election, announced the body in his first official speech. He criticised the economic and fiscal forecasts of the previous Labour government
Premiership of Gordon Brown
The Premiership of Gordon Brown began on 27 June 2007, when Brown accepted the Queen's invitation to form a government, replacing Tony Blair as the Prime Minister of the United Kingdom, and ended with his resignation as Prime Minister on 11 May 2010...
, and announced that the OBR would be responsible for publishing these independently of government in future. According to the Treasury, the OBR will not be a large team. The Treasury will continue to carry out most of the work of economic forecasting
Economic forecasting
Economic forecasting is the process of making predictions about the economy. Forecasts can be carried out at a high level of aggregation - for example for GDP, inflation, unemployment or the fiscal deficit - or at a more disaggregated level, for specific sectors of the economy or even specific...
. The role of the Office is to advise whether the declared policy of the Government is likely to meet its targets.
The OBR was initially chaired by Sir Alan Budd who, along with Geoffrey Dicks and Graham Parker
Graham Parker
Graham Parker is a British rock singer and songwriter, who is best known as the lead singer of the popular British band Graham Parker & the Rumour.-Early career :...
, formed the Budget Responsibility Committee. Budd had been a founding member of the MPC
Monetary Policy Committee
The Monetary Policy Committee is a committee of the Bank of England, which meets for two and a half days every month to decide the official interest rate in the United Kingdom . It is also responsible for directing other aspects of the government's monetary policy framework, such as quantitative...
; Dicks was chief economist at Novus Capital and former chief economist of the Royal Bank of Scotland
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
; and Parker headed up the Treasury
HM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
’s public sector finances team. The remainder of the initial team comprised eight staff seconded from the Treasury. The initial team planned to recommend the eventual size of the Office.
Colin Talbot
Colin Talbot
Colin Talbot is a British political scientist. He is currently a professor at the University of Manchester and holds the Chair of Public Policy and Management at Manchester Business School...
, Chair of Public Policy and Management at Manchester Business School
Manchester Business School
Manchester Business School is the largest department of the University of Manchester in Manchester, England. According to Bloomberg Business Week's ranking of the world's best business schools the MBS MBA is ranked third in the world...
and Treasury adviser on public spending, questioned the credibility of the new organisation. He said that the body could not be set up in time to judge the forecasts in the June 2010 United Kingdom Budget
June 2010 United Kingdom Budget
The June 2010 United Kingdom Budget, officially known as 2010 Budget - Responsibility, freedom, fairness: a five year plan to re-build the economy, was delivered by George Osborne, Chancellor of the Exchequer, to the House of Commons in his budget speech that commenced at about 12.30 p.m on Tuesday...
. In his opinion, the OBR would not be sufficiently independent of politicians or the Executive
Executive (government)
Executive branch of Government is the part of government that has sole authority and responsibility for the daily administration of the state bureaucracy. The division of power into separate branches of government is central to the idea of the separation of powers.In many countries, the term...
to remove the politics from economic decision-making. The office made adjustments to its forecasts in the week before the June 2010 budget. These were thought to be politically favourable to the coalition government and so cast doubt on its independence.
In July 2010 it was announced that Budd would not continue in the role after his initial 3-month contract expired. The Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
reported "His departure was expected and Sir Alan had let it be known privately that he had never intended to serve as chairman of the OBR for anything other than a short period. His contract spanned the emergency Budget, leaving enough time thereafter to advise on the legislation needed to establish the OBR on a permanent basis." Speculation on his successor had included Rachel Lomax
Rachel Lomax
Janis Rachel Lomax in Swansea Wales is a British economist and former government official who served as Deputy Governor of the Bank of England, sitting on the Monetary Policy Committee from 1 July 2003 to 30 June 2008.-Early life:...
, John Gieve
John Gieve
Sir Edward John Watson Gieve, KCB is a former British Civil Servant, who served as Deputy Governor for Financial Stability of the Bank of England and an ex officio member of the Monetary Policy Committee from 2006 to 2009....
, Andrew Dilnot
Andrew Dilnot
Andrew Dilnot CBE is British economist and broadcaster. He has been Principal of St Hugh's College, Oxford since October 2002. He was for several years the presenter of BBC Radio 4's series on numbers, More or Less and of documentaries for British television. Dilnot was Director of the Institute...
, Robert Chote
Robert Chote
Robert Chote is a British economist and current chairman of the Office of Budget Responsibility.-Education:Chote completed his secondary education at St Mary's College in Bitterne Park, Southampton...
, Michael Scholar
Michael Scholar
Sir Michael Charles Scholar KCB is President of St John's College, Oxford. He was educated at St Olave's Grammar School, St John's College, Cambridge...
and Ruth Lea
Ruth Lea
Ruth Jane Lea is a British economist, who works in the financial sector and has also worked in the Civil Service, policy research bodies and the media....
.
In September 2010, Chancellor George Osborne announced that Robert Chote had been appointed as the new Chairman.
See also
- Congressional Budget OfficeCongressional Budget OfficeThe Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
(United States) - Parliamentary Budget OfficerParliamentary Budget OfficerThe Parliamentary Budget Officer was established in 2006 and is mandated by the Parliament of Canada Act to provide independent analysis to the Senate and House of Commons on the state of Canada's finances, the government’s estimates and trends in the national economy. It was one of the...
(Canada)