Cutbacks for everyone, apart from the Office for Budget Responsibility

The overseer of Whitehall budgets hikes its outgoings by 20 per cent
  • @oliver_wright

It was established with great fanfare by George Osborne to guarantee the financial probity of Government and ensure, as he put, it that no politician would ever be able to “fiddle the books” again.

But four years on it appears that the independent Office for Budget Responsibility has had to do a little creative accounting of its own.

Figures slipped out in the annex to a Treasury report yesterday reveal that the OBR may have had trouble sticking to the austerity budgets that have been imposed elsewhere across Whitehall.

While other government departments have had to shrink their spending by more than a quarter, the OBR has managed to increase its outgoings by a whopping 20 per cent.

The figures are contained in a letter from the Permanent Secretary at the Treasury, Nick Macpherson, to the head of the OBR, sent earlier this month.

It states that over the next four years the OBR’s budget will rise from just over £2m a year to just under £2.2m in 2017. But a look back at the original financial projections of how much the OBR would cost in 2011 reveals that it was expected to be a rather leaner institution. Then, in a similar letter, Mr Macpherson told the OBR that its annual budget would be just £1.75m – and would not rise at all for the first four years of it existence.

While not huge sums in real terms the difference between the figures mean that the OBR’s total budget will have risen by 19 per cent by the end of this year.

In contrast unprotected departments within government have been expected to do “more with less” and make real-term savings of up to 25 per cent over this Parliament.

Mr Osborne has said he expects these cuts to continue after the next election. However Mr Macpherson’s letter makes clear that this will not apply to the OBR, which will instead see its money increase by about 6 per cent.

In a statement the OBR said the extra money would allow it to increase it staffing levels from 17 to 19 civil servants and create a new three-person team dedicated to the analysis and forecasting of welfare spending and the scrutiny of welfare policy measures.

It admitted that this was “always an important part of its work” but said it would “become even more so as the Government has asked us to produce an annual report on welfare trends and to police its newly created cap on welfare”.

The extra resources would also allow it to fulfil a new role in forecasting the receipts from taxes due to be devolved to the Welsh Assembly.

Robert Chote, the OBR’s chairman, said: “I have always insisted that a transparent multi-year budget is an important safeguard for our independence, and a bulwark against political interference.”

Labour was strangely reticent last night to pass judgement on the increased costs. It wants the OBR to provide an independent analysis of its own manifesto in time for the election. It will also have to provide its own budgets for scrutiny should it win power.