The Treasury Committee has publishes a report recommending a change in the law requiring the Office for Budget Responsibility (OBR) to produce its 50 year Fiscal Sustainability Report (FSR) only twice a Parliament.
Under the Budget Responsibility and National Audit Act 2011, the OBR is currently required to publish this 50 year projection annually.
The Treasury Committee is recommending that two FSRs be produced per Parliamentary cycle: the first within a year of a general election and the second at a time in the last two years of the Parliament that the OBR considers most appropriate for informing public debate.
Commenting on the report, the Chairman of the Treasury Committee, Andrew Tyrie MP, said:
“Annual forecasting is difficult enough: the one thing you can predict is that the forecast is likely to be wrong. Fifty year projections are little more than guesswork.
“The main value of the OBR’s Fiscal Sustainability Report is not in the numbers generated but in flagging up - in broad aggregates - the possible long-term fiscal consequences of big government decisions. For that purpose, annual publication is manifestly unnecessary.
“Two projections a Parliament should be ample: one reflecting measures at the end of the first year, during which incoming governments tend to enact their more far-reaching reforms, and one in the run-up to the general election, with the purpose of improving the quality of public debate.
“Less frequent work on these Reports should also create scope for significant public expenditure savings by the OBR, notwithstanding protestations to the contrary.”