The OBR

  What is the OBR?

The Office for Budget Responsibility was created in 2010 to provide independent and authoritative analysis of the UK’s public finances. It is one of a growing number of official independent fiscal watchdogs around the world. We have 5 main roles:

  • Economic and fiscal forecasting to accompany the Autumn Budget and Spring Statement;
  • evaluate the Government’s performance against its fiscal targets;
  • assess the long-term sustainability of the public finances and analyse the public sector’s balance sheet;
  • evaluate fiscal risks from 2017; and
  • scrutinise tax and welfare policy costings at each Budget.

For more information, see our What we do page.

  How is the OBR structured?

The OBR is led by the three members of the Budget Responsibility Committee (BRC). They have executive responsibility for the core functions of the OBR, including the judgements reached in its forecasts. They are:

  • Richard Hughes, Chairman
  • Prof. Sir Charlie Bean
  • Andy King

Organisational chart of the OBR August 2021

The OBR’s Oversight Board ensures that effective arrangements are in place to provide assurance on risk management, governance and internal control. It consists of the three members of the BRC, plus two non-executive members, currently Bronwyn Curtis OBE and Sir Christopher Kelly.

The OBR’s Advisory Panel of economic and fiscal experts meets regularly to advise the OBR on its work programme and analytical methods.

The BRC are supported in their work by the OBR’s permanent staff of 35 civil servants, led by Steve Farrington.

For more information, see our Who we are page.

  How do you work with other Government departments and continue to uphold your independence?

The tasks the OBR has been given require us to have a close working relationship with officials in a number of Government departments – especially the Treasury, the Department for Work & Pensions and HM Revenue & Customs – in the run-up to Budgets and Spring Statements. We maintain our independence by being as transparent as we can after each forecast about our interactions with ministers and their key staff and about the reasons for the judgements we have reached. The formal ‘rules of the game’ for our working relationship with departments are set out in a Memorandum of Understanding (which you can find on our Legislation and related material page). For more details on how we interact with departments see our Working with Government page.

Limits of our remit

  Do you assess whether the Government’s policies are sensible or the best options?

No. Paragraph 4.12 of the Charter for Budget Responsibility states that ‘the OBR should not provide normative commentary on the particular merits of government policies’. Our job is to assess the implications of current stated Government policy, not to assess whether that policy is likely to change or should change.

  Do you assess the efficiency or value-for-money of government spending?

Our role is to assess the outlook for the public finances and whether they are sustainable, based on current Government policy. To that end we have to forecast how much the Government is likely to spend, but it is not our job to assess whether that money will be spent sensibly or efficiently – Parliament has specifically stipulated that ‘the OBR should not provide normative commentary on the particular merits of government policies’. The National Audit Office scrutinises public spending for Parliament, including value-for-money, but its focus is generally on how money has been spent in the past rather than how it is likely to be spent in the future.

  Are you allowed to scrutinise and certify opposition party manifesto policies?

No, that would require a change in the law. Subsection 5(iii)(b) of the The Budget Responsibility and National Audit Act 2011 states that the OBR must not consider alternative policies, which restricts us to assessing the likely impact of the current policies of the current Government. Official independent fiscal institutions do fulfil this role in some other countries, notably the CPB Bureau of Economic Policy Analysis in the Netherlands. Parliament did discuss whether the OBR should play this role in 2014 and we wrote to the Treasury Select Committee to set out some of the issues that would need to be addressed if ever we were to be asked to do so. The Treasury’s 2015 review of the OBR considered the issue again. It recommended that the law should not be changed to allow us to perform this role.

  You scrutinise policy costings – what does this entail?

The OBR scrutinises the tax and non-departmental spending (e.g. welfare spending) measures that the Chancellor is thinking of including in the statement. First the Treasury shows us a draft ‘scorecard’ – an initial list of possible measures. We then discuss the scrutiny we think each measure would require with the Treasury and the responsible department, based on its complexity and similarity to previous measures. The Treasury will then send a ‘costing note’ to the OBR, setting out the details of the policy and estimating the amount of money it will raise or cost in each year of the forecast. The OBR discusses the analysis with the department and the Treasury, suggesting changes and iterating until we are happy to endorse the estimates as ‘reasonable and central’ or until the Treasury and we agree to disagree (which has not happened yet). In the case of tax measures, these discussions focus on identifying the relevant tax base and judging the potential behavioural impact of the measure from the experience of similar measures or from estimates of relevant elasticities. For further detail, see Briefing Paper No.6: Policy costings and our forecast.

Producing forecasts

  Where can I find your fiscal multipliers?

We published our latest estimates and more information on how we apply fiscal multipliers in the July 2015 Economic and fiscal outlook in Box 3.2, page 39.

  Do you check how well your forecasts have performed?

Yes. Parliament requires us to look back at our forecasts once a year. We do that in our Forecast evaluation reports. This involves breaking down the differences between our forecasts and subsequent outturns into those that can be attributed to changes in how the ONS records the data, subsequent Government policy changes, unexpected economic developments and other factors. The approach we use is described in a dedicated briefing paper on evaluating forecast accuracy.

  How often do you publish forecasts?

The OBR usually produces forecasts twice a year, to accompany each Autumn Budget and Spring Statement. These are published in our Economic and fiscal outlook (EFO), which is posted on our website as soon as the Chancellor of the Exchequer has finished his speech to Parliament.

  Will you update your forecasts between fiscal events?

No. We only produce a forecast when formally requested to by the Government to accompany a fiscal event. Between forecasts we produce other reports and analysis that are required of us by Parliament or which we consider would be useful to inform debate about the public finances or to explain how we do our work.

  What’s the date of your next forecast?

The Chancellor of the Exchequer decides the dates of our forecasts when he decides the date of the Autumn Budget (usually in late November or early December) or the Spring Statement (usually in mid-March). Under normal circumstances, the Chancellor is required to give us 10 weeks’ notice when requesting a forecast. The Treasury informs the Treasury Select Committee and Parliament of the date at the same time, or as soon as possible afterwards if Parliament is in recess. Please refer to the Treasury website for announcements.

  Do you take a deliberately cautious view in your forecasts?

No. Given the requirement on us to judge whether the Government has a better than 50 per cent chance of achieving its fiscal targets on current policy, we aim to produce forecasts that are central, with risks equally weighted to the upside and downside. This means that, all else equal, there is a 50 per cent chance of the outturn coming in above our forecast and 50 per cent chance below.

One way we illustrate the uncertainty around our central forecasts is by using fan charts. The fan chart below shows the real GDP forecast in the March 2016 EFO. The black line is our central estimate. Each successive pairs of blue areas represents 20 per cent probability bands for different outcomes, based on the size and distribution of past official forecast errors.

Fan chart

  Do you forecast departmental spending (DELs)?

When setting out its plans for public spending, the Government sets out cash ceilings in the form of Resource and Capital Departmental Expenditure Limits. The former (RDEL) largely comprises central government spending on public services and administration (mostly public sector pay, procurement and grants to local government); the latter (CDEL) largely comprises central government spending on capital investment and capital grants to local authorities and private sector organisations. RDELs and CDELs are specified department by department for the years covered by Spending Reviews and as aggregate numbers for subsequent years. For the purposes of our forecast, we need to predict how much money will be spent relative to these limits. We do this be reaching a judgement on the degree to which the aggregate RDELs and CDELs in each year will be under or overspent, drawing information from the Treasury, departmental forecasts and past performance. We do not produce a bottom-up forecast of DEL spending, department by department, and we do not scrutinise announcement of individual spending increases or cuts within the DEL totals.

For more information on the Treasury’s DEL assumptions, see Spending assumptions 2011- 2015.

  How do you produce your economy forecast?

The economy forecast ultimately reflects the judgements made by the members of the Budget Responsibility Committee, following lengthy discussions with our staff and informed by the work of outside experts and other forecasters. In putting together the forecast, we use a large-scale macroeconomic model of the economy jointly maintained and developed by the OBR and the Treasury. This does not drive the results of the forecast, but rather provides a framework to ensure that the judgements we make are mutually consistent and comprehensive and that they reflect the way in which different economic variables have behaved and interacted in the past. A framework for the joint governance, management and development of the macroeconomic model is set out in a Memorandum of Understanding – the macroeconomic model.

Read more about our economy forecast in Briefing paper No.3: Forecasting the economy and model in Briefing paper No.5: The macroeconomic model

 

Data

  Where can I find your latest forecasts?

We publish all our forecasts in the Economic and fiscal outlook (EFO). The best place to find the data is in the EFO charts and tables and supplementary tables on the Economic and fiscal outlook page.

Economy forecasts
Our latest economy forecasts are published in Chapter 3 of the Economic and fiscal outlook (EFO). All data in the charts and tables can be found in the Economic and fiscal outlook charts and tables spreadsheets. We also publish forecasts in our supplementary economy tables in quarterly, calendar and financial years.

The main economic determinants of the fiscal forecast can be found in Table 2.9 of the Economic and fiscal outlook.

Fiscal forecasts
Our latest fiscal forecasts are published in Chapter 3 and 4 of the Economic and fiscal outlook (EFO). All data in the charts and tables can be found in the Economic and fiscal outlook spreadsheet. We also produce extra detail in our expenditure and receipts and other supplementary fiscal tables.

If you can’t find what you’re looking for please email the relevant economist on our Contact us page.

Most commonly searched forecasts

GDP
Table 1.1-1.2, Supplementary economy tables
Also at the end of Chapter 2 of the EFO

November 2020 forecast202020212022202320242025
Real GDP growth-11.35.56.62.31.71.8
Nominal GDP growth-5.43.96.84.13.84


RPI, CPI and other inflation measurements
Table 1.7, Supplementary economy tables
Also at the end of Chapter 3 of the EFO

November 2020 forecast202020212022202320242025
RPI1.51.41.52.633
CPI0.81.21.61.71.92


Household debt
Table 1.11, Supplementary economy tables

November 2020 forecast202020212022202320242025
Liabilities (£ billion)206221002144220522832373
Liabilities to income ratio (per cent)138140139137138138


Output gap
At the end of Chapter 3 of the EFO
Table 1.18, Supplementary economy tables

November 2020 forecast202020212022202320242025
Output gap-0.6-1.1-0.8-0.3-0.2-0.1


National Living Wage and National Minimum Wage
Table 1.17, Supplementary economy tables

November 2020 forecast202020212022202320242025
National Minimum Wage8.28.368.488.600
National Living Wage8.728.919.249.7110.110.46


Budget deficit/public sector net borrowing
Table 1.3, Charts and tables

November 2020 forecast2020-212021-222022-232023-242024-252025-26
PSNB (per cent of GDP)197.44.44.13.93.9
PSNB (£ billion)393.5164.2104.6100.499.6101.8


Government debt/public sector net debt
Table 1.3, Charts and tables

November 2020 forecast2020-212021-222022-232023-242024-252025-26
PSND (per cent of GDP)105.2108108.6109.4105104.7
PSND (£ billion)227424782602272127142817
  Where can I find your previous forecasts?

Our historical forecast database includes successive forecasts and recent outturn data for almost 100 variables – including all the main lines of tax and public spending, plus the major fiscal aggregates (such as public sector borrowing and debt) – from our forecasts since 2010. The database also includes most of the economic and fiscal forecasts published by the Treasury prior to 2010 and in some cases back as far as 1970.

If the series you are looking for isn’t listed, please email [email protected].

  Where can I find historical outturn fiscal data?

Our Databank, published monthly after the ONS public sector finances release, lists headline public finances series from 1950 along with the latest forecasts.

Other publications and releases

  When will you be producing the next monthly public finance release?

Please refer to the list of upcoming publication dates on our home page. We publish a commentary on the day of the ONS public sector finances (PSF) release. The only exception is if the PSF release is close to publication of a new forecast in an Economic and fiscal outlook. The aim of the commentary is to explain the data published for the latest month and any revisions to earlier months, and to put them in the context of our latest forecast. This can be important because revenue and spending flow unevenly and comparing the budget deficit over the fiscal year to date with the same period in the previous year is rarely a good guide to what the full year’s data will look like.

  How often do you update the Forecasts in-depth pages?

We aim to update all content on the Tax by tax, spend by spend and The economy forecast pages after each forecast. Where relevant, we endeavor to bring some sections up to date between forecasts.

  How often do you update the Brief Guides?

We aim to update the brief guides after each forecast.

  I would like to request more information about a forecast that you produce. What is the process?

Please email [email protected]. If we have the information you would like we will endeavour to publish it on our website on the next fortnightly release date. Those dates coincide with day on which the Office for National Statistics issues its monthly Public Sector Finances (PSF) release and the Thursday that follows two weeks after the PSF release. Releases will be published at 11am.

For further information on our supplementary releases, please refer to our release policy.

  You published extra detail of your forecasts in a supplementary release in the past – do you have an up to date version?

Yes, if we have published the relevant report since. Once we receive a request and publish the additional information, we will continue to publish updated versions in our supplementary tables.

For further information on our supplementary releases, please refer to our release policy.

External engagement

  What links do you have with other independent fiscal institutions (IFIs)?
  Do you receive delegates from overseas fiscal organisations?

Yes. On occasion we host experts from overseas IFIs, governments and parliaments who are keen to find out about our work. If you would like to visit us, please email [email protected] and we would be happy to organise a meeting at a convenient time.

  Do you offer technical assistance?

We do not have the resources to provide technical assistance on a regular basis, but occasionally OBR staff have been involved in technical assistance missions organised by the International Monetary Fund (IMF).

  What relationship do you have with the Bank of England?

The OBR has no formal relationship with the Bank of England, although we meet regularly with Bank staff to discuss forecasting issues of mutual interest.

Press

  Can I attend the press conference?

Anyone from the press can attend. If you’d like to receive an invitation to our next press conference, email [email protected].

Office management

  Where are you located?

The OBR is located in the Ministry of Justice. The address is 14T, 102 Petty France, London, SWIH 9AJ.

  What’s the OBR budget?

Our budget is £4.38 million in 2021-22, with indicative funding for two further years in anticipation of the forthcoming Spending Review. This is set out in a letter on 17 June 2021 from HM Treasury Permanent Secretary to Chair of the OBR regarding the OBR funding allocation. We have also agreed a revised funding allocation for 2020-21 and indicative funding to 2022-23.

  Who provides your IT support?

Our IT support is outsourced under a contract managed by the Ministry of Justice (MoJ).

Other topics

  Where can I find your list of upcoming events?

We list upcoming publication dates on the home page.

  Can I work at the OBR?

From time to time the OBR has vacancies that are open only to civil servants and advertised on the Civil Service Jobs portal. We also hire placement students via the GES Sandwich Student Placement Scheme.

  How are members of the Budget Responsibility Committee appointed?

Including the chairman, the three members of the Budget Responsibility Committee (BRC) are appointed by the Chancellor of the Exchequer with the consent of the Treasury Select Committee. Appointments are for 5 years and no member can serve more than two terms.
For more information, please refer to section (1) to (6) of Schedule 1 of the Budget Responsibility and National Audit Act.

Richard Hughes (chairman), Prof. Sir Charlie Bean and Andy King are serving their first terms. Their letters of appointment can be found on our Governance and reporting page.