What we do
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 four main roles:
- We produce five-year forecasts for the economy and public finances twice a year. The forecasts accompany the Chancellor’s Budget Statement (usually in March) and his Autumn Statement (usually in late November) and they incorporate the impact of any tax and spending measures announced by the Chancellor. The details of the forecasts are set out in our Economic and fiscal outlook (EFO) publications. Our annual Forecast evaluation report (FER) published each Autumn, examines how the EFO forecasts compare to subsequent outturns.
- We use our public finance forecasts to judge the Government’s performance against its fiscal targets: The Government has set itself two medium-term fiscal targets: first, to balance the cyclically-adjusted current budget five years ahead, and; second, to have public sector net debt falling in 2015-16. In the EFO, we assess whether it has a greater than 50 per cent probability of hitting these targets under current policy. We also test how robust this judgement is, given the uncertainty inherent in all fiscal forecasts.
- We scrutinise the Treasury’s costing of tax and welfare spending measures: During the run-up to Budgets and Autumn statements, we subject the Government’s draft costings of tax and spending measures to detailed challenge and scrutiny. We then state in the EFO and the Treasury’s policy costing documents whether we endorse the costings that the Government finally publishes as reasonable central estimates.
- We assess the long-term sustainability of the public finances: Our annual Fiscal sustainability report sets out long-term projections for different categories of spending, revenue and financial transactions, and assesses whether they imply a sustainable path for public sector debt. The FSR also analyses the health of the public sector’s balance sheet using both conventional National Accounts measures and the Whole of Government Accounts prepared using commercial accounting principles.
These four roles all focus on the public finances at a UK-wide level. But the Government has also asked us to forecast the Scottish receipts for those taxes that it plans to devolve to the Scottish Government from April 2015. Our Scottish revenue forecasts are published alongside our EFOs.
In support of these activities, we undertake a variety of research projects through the year. We publish briefing material to inform people about our work, and we provide a same-day briefing on the public finances statistics, to help people interpret the latest data in the light of our most recent forecasts.
We answer parliamentary questions on our forecasts and give evidence to parliamentary committees.
BRC members and OBR staff also give talks and presentations at external events. The Chairman discussed the role of the OBR, and the difference that it had made after its first three years in existence, in a lecture entitled Britain’s fiscal watchdog: a view from the kennel on 9 May 2013.
We summarise our activities each year in our Annual Reports.