‘Don’t blame OBR for finance woe’

By the Editorial Team · Wednesday, September 23, 2026

The Treasury committee defended the Office for Budget Responsibility's independence and called on the government to avoid blaming it for current fiscal challenges, while recommending the OBR extend its forecast horizon to ten years. This guidance comes as the OBR's next economic report approaches under new leadership, aiming to balance short-term fiscal targets with long-term economic impacts amid ongoing criticism of its modelling assumptions.

The Treasury committee has urged caution against blaming the Office for Budget Responsibility (OBR) for the current challenges facing the UK’s public finances, emphasizing the importance of preserving its independence and role as a fiscal watchdog. In a report published ahead of the OBR’s next economic forecast on October 28, MPs highlighted the need to distinguish between the watchdog’s analysis and government policy decisions.

The OBR, established in 2010 under Chancellor George Osborne, provides independent assessments of the government’s tax and spending plans twice a year. While it has faced criticism from lawmakers and commentators across the political spectrum—especially following the inadvertent early release of a sensitive forecast last autumn that led to the resignation of then-chairman Richard Hughes—the committee defended the institution’s function as a key part of fiscal governance.

Dame Meg Hillier, chair of the Treasury committee, urged the government not to conflate the OBR’s role with policy outcomes, stating that the fiscal rules it enforces gain prominence during periods when government spending operates on tight margins. She called on the new chancellor and administration to make clear distinctions in their public communications, cautioning against portraying the OBR as wielding excessive influence over Treasury ministers.

The committee also recommended the OBR adopt a longer-term perspective by producing ten-year forecasts alongside its more traditional five-year projections. This approach aims to better capture the economic impact of policies like government investments in housing and infrastructure, whose benefits may only become apparent beyond 2030. Hillier noted that such extended forecasts could stimulate broader discussion around overcoming “short-term thinking” that often hampers economic progress.

Next month’s OBR publication will be the first under new chairman Jonathan Haskel, a former external member of the Bank of England’s Monetary Policy Committee. Haskel has expertise in productivity measurement, particularly in sectors outside manufacturing such as research and development. His leadership comes as the OBR prepares to evaluate how much fiscal flexibility the government has to meet its target of balancing day-to-day spending with tax revenues by the end of the decade.

The OBR’s most recent assessment in March reported a £23.6 billion fiscal buffer. However, this was prior to recent increases in oil prices driven by the Iran conflict, which economists say have likely diminished that margin by at least half in the past six months.

Despite defending the OBR’s independence, the committee acknowledged significant criticism from voices such as Paul Nowak, general secretary of the Trades Union Congress. Nowak argued that the OBR’s models remain tied to austerity-based assumptions that hinder economic growth and called for a comprehensive review to modernize its framework. Some economists also criticized the OBR for consistently overestimating productivity growth and for not incorporating a wider range of economic perspectives, especially failing to account fully for the growth potential of reforms like changes to planning regulations.

As the OBR prepares to release its next forecast, the committee’s report underscores its crucial role as an independent arbiter of fiscal policy, while recognizing calls for reforms to ensure its analysis reflects evolving economic realities.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.