David Prosser: The Chancellor is running out of time to save the OBR

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The Independent Online

Outlook: Good ideas are just the starting point for government policy. If ministers fail to execute them properly, they might as well not bother in the first place.

Take the Office of Budget Responsibility. In principle, an independent forecasting agency for key economic statistics seemed a fine notion when George Osborne announced the OBR in the first week of the coalition Government, but in practice the Chancellor has made a hash of setting the thing up, completely undermining its very purpose.

It was bad enough that the OBR's interim head, Sir Alan Budd, and his key lieutenants could not be persuaded to stay on beyond their initial, very short-term contracts. Though if Mr Osborne did not expect them to do so, as he now insists, why on earth has he not lined up some impressive candidates to replace them?

Now we learn that just days before the emergency Budget, the OBR revised its assumptions about the effect that public spending cuts would have on unemployment, providing Mr Osborne with valuable political ammunition as Labour sought to highlight the damage that his austerity measures might do to jobs.

Now, the hoary old cliché isn't always true: sometimes there is smoke without fire. The last-minute changes to the OBR's data and the departure of Sir Alan and friends do not necessarily imply that the Chancellor has been engaging in some naughtiness behind the scenes. But the facts of the matter are less important than the perception. The point of the OBR is to restore credibility and independence to the forecasting process that Mr Osborne claims his predecessors have politicised. By allowing doubts about those attributes to surface so rapidly after getting the OBR up and running, the Chancellor has put his own creditable intentions at risk.

What can he do to turn the situation around? Well, besides staying well away from the OBR over the next few years, there are two quick wins that might help the Chancellor to salvage his project. First, there is merit in ceding the power of appointment of the next OBR head to a body such as the Treasury Select Committee. Second, the organisation needs its own office, rather than working out of space within the Treasury buildings.

It is not too late to turn this good idea into good practice. But if the OBR is to trade on its independence, there can be absolutely no suspicion of political interference or partiality.

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