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If the Office for Budget Responsibility does not disclose that its forecasts are total nonsense when it knows that they are what is the point of it?


I have already commented on the dubious accounting of the Office for National Statistics this morning. So, let me now turn instead to the equally dubious accounting of the Office for Budget Responsibility (OBR).

As the Guardian noted yesterday:

Forecasts on the outlook for the public finances last year were beyond “a work of fiction”, the head of the Treasury’s independent forecasting unit has suggested, after the government failed to provide details of its spending plans.

The report was based on comments made by Richard Hughes, the head of the Office for Budget Responsibility (OBR), to the economic affairs committee of the House of Lords. Giving evidence he said:

the OBR’s forecasts were based on “questionable assumptions” that lead people to call his efforts a work of fiction.

Some people call [the projections] a work of fiction, but that is probably being generous when someone has bothered to write a work of fiction and the government hasn’t even bothered to write down what its departmental spending plans are underpinning the plans for public services.

As was widely commented (including by me) last November, the departmental spending figures included in the autumn’s OBR forecasts looked utterly implausible, implying cuts of an order that nobody thought possible to deliver.

What we now know are a number of things.

The first is that the government supplied no real estimates to the OBR. At best, it delivered a back of a fag packet figure that had no workings attached to it, or any detail, from which the OBR was then supposed to make up its numbers.

Second, the OBR forecasts lacked all credibility as a result.

Third, the OBR did not say that at the time, which shoots its credibility to pieces for good, in my opinion, at least under this leadership.

And fourth, we know that Rachel Reeves’ supposed dependence on the OBR to provide independent endorsement of any plans she produces in the future is as shot to pieces by this as have been all Tory forecasts commented on by the OBR.

In summary, this is utterly unethical conduct by the OBR because they failed to disclose that the forecasts that they issue lacked any credibility, and they knew that at the time.

What a total mess.




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