The Sketch: I have made a study of Sir Alan Budd and can make some forecasts

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The Independent Online

Alan Budd may be an inexact science but it's worth observing some of his characteristics and seeing if we can make useful predictions from the mass of raw material he provides.

He was commissioned by George Osborne to bring into being this thing called the Office for Budget Responsibility.

Economic forecasting by the Treasury had been so politicised over the last three governments that the new lot wanted to "to remove the temptation to fiddle the figures".

Here's the question asked by the Treasury Select Committee yesterday: has that temptation been removed? Has the new office established its independence beyond temptation? Are they, or will they be, beyond the reach of the Treasury?

The chairman's two deputies – Bottum and Buttom, by name, as far as I can remember – they are both Treasury officials by training, temperament and time spent with Treasury officials.

The office they run relies on Treasury figures. They use departmental computer models to process the data. And it's one of those computer maxims – "Treasury data in, Treasury data out".

One of them said, "All forecasts are iterative, leading to the place you want to be." Extra points for that!

Leave aside all the rumours surrounding Alan Budd's quitting and ask how, in these circumstances, can the office be genuinely independent. "It is largely a problem of perception," he said.

I was shocked. Are you shocked? I was. Shocked. "Largely a problem of perception" is what PR people say. That's the language of spinners and focus-group analysts.

He was asked again, how could we have confidence the officials' advice is true, accurate, independent, rather than what ministers want to hear?

His answer to this was more revealing still. "I can't imagine ministers wanting anything else," he said.

Can't you, old cock? You who have been around ministers for so much of your career, you can't imagine these intensely political animals wanting to bend the facts and figures for their own purposes?

He must be the only man in Whitehall who can't.

If ministers really were "holy fools", there'd be no need for an Office for Budget Responsibility.

So, key question: who should the Office report to? Who pays the bills? Who's the client? Who owns the independent body? Should it be Parliament or the Chancellor?

Alan Budd has one of those mandarin conflations to deal with this embarrassing question. He says his office should report to Parliament through the Chancellor.

And why first to the Chancellor?

"It is inevitable," he said. "Because it is the Chancellor who takes the Budget decisions. Because it is the Chancellor who uses and publishes our forecasts."

Why, oh why, would that make it inevitable?

Having modelled the data, I say there is only a 15 per cent chance that the Office will produce genuinely independent forecasts, and that there is an 85 per cent chance they will be a front organisation for the Treasury producing the sort of things that the Chancellor will find convenient at the time.

Of course, if they do produce hostile and disruptive results I will say wisely, "You see? I said specifically there was a 15 per cent chance of them doing exactly this. Forecasting is not an exact science but we must all agree that I scored a bullseye there."

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