The general idea of the Office for Budget Responsibility makes sense. When hundreds of billions of pounds are at stake annually, it makes sense to have an independent body review government expenditure plans rather than have the government mark its own homework, so to speak.
However, in recent years the OBR's role seems to have expanded to be more than just a verifier of government expenditure to one that plays a major role in determining government expenditure....
With forecasting powers centralized in one agency, the British Government has effectively opted to outsource macroeconomic forecasting to the OBR
This is important because forecasting is not a purely technical, technologically neutral activity. Assumptions are embedded in forecasting, and they relate to assumptions concerning growth, productivity, and labour markets. A conservative bent in these assumptions, such as is the case with OBR assumptions, significantly reduces wiggle room within fiscal expenditure....
There's also the fact that the Treasury now finds itself in a reactive mode rather than a strategic mode, which is pretty lame, for, well, The Treasury!
I guess at the end of the day the government doesn't actually have to listen to the OBR, I mean the government agrees to stick to its analysis - its so called Fiscal Rules, but if it really wanted to it could just change the role of the OBR and take back control of government expenditure and borrowing.
To be honest it's kind of bizarre hearing Rachel Reeves use the OBR as an excuse, it's almost like a comfort blanket that limits the decisions she can make, and she seems pretty comfortable with that!
