An influential parliamentary committee has defended the government’s independent economic forecaster against attacks from both political sides, contending that critics are mischaracterizing its role in determining fiscal policy.
The Treasury committee stated that the Office for Budget Responsibility should not be held responsible when government ministers face difficult spending decisions due to constrained public finances. Committee chair Dame Meg Hillier rejected characterizations of the OBR as wielding excessive influence over Treasury decision-makers, describing such claims as inaccurate based on the committee’s review. She noted that fiscal rules and OBR forecasts become particularly significant when government spending operates under tight financial constraints, framing this as a consequence of ministerial policy decisions rather than institutional overreach.
The OBR was established in 2010 to provide independent economic forecasts and evaluate the fiscal impact of government policies. Over the years, it has faced criticism for allegedly downplaying the effects of austerity measures and subsequently overestimating the economy’s growth capacity. Academic economists presenting to the committee argued that the OBR’s forecasts regarding available fiscal headroom have effectively become the primary determinant of government spending policy, asserting that the institution operates without a democratic mandate for such influence.
The committee’s review came following the December 2025 resignation of OBR chair Richard Hughes after details of the organization’s budget assessment were leaked. While defending the OBR’s independence, Hillier expressed openness to considering longer-term forecasting approaches, suggesting that a 10-year economic projection could supplement existing five- and 50-year forecasts. The committee also recommended that Parliament allocate time to debate the OBR’s annual reports on fiscal risks and sustainability, potentially helping address what Hillier described as the nation’s tendency toward short-term policy thinking.
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