The creation of the Office for Budget Responsibility
The creation of the Office for Budget Responsibility (OBR) stemmed from research led by Professor Campbell Leith, in collaboration with the Universities of Exeter and Oxford.
This work underpinned the 2008 policy paper by the Conservative Party calling for the creation of an independent fiscal oversight body; subsequently over the course of 2008-09 the research was presented to the offices of the Chancellor and Prime Minister, the Cabinet Office Strategy Unit, and the Institute of Government. The proposal was implemented by the coalition government in 2010, with the research team then using the findings to advise a Treasury Select Committee as well as the Bank of England on the appropriate remit, expectations and functions of the newly-created OBR.
The purpose of the OBR was to closely monitor the government’s fiscal activities, pinpointing any unsustainable policies while at the same time allowing a flexible response to shocks in the short-term.
Following on from the success of the OBR, Leith began working with the Scottish Government as part of an Inquiry into Proposals for an Independent Fiscal Body, which would function in a similar manner to the OBR.
Besides acting as a fiscal ‘watchdog’ the OBR produces forecasts which include the projected impact of policy or spending decisions in the government’s annual budget; assesses the Government’s performance against fiscal targets; monitors and advises on the long-term sustainability of the public finances; and scrutinises the Treasury’s costing of Budget measures. These duties and responsibilities resonate closely with those suggested by Leith et al. Leith and Professor Simon Wren-Lewis (Oxford) were not only involved in the debate surrounding the creation of the OBR, but the discussions held to further refine the remit of the new institution.
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