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Budget Responsibility Act 2024

Contents

Policy background

  1. The OBR is an executive non-departmental public body, sponsored by HM Treasury, which provides independent and authoritative analysis of the UK’s public finances. The OBR was established under the Budget Responsibility and National Audit Act 2011 ("the BRNAA").
  2. Under section 4(3) of the BRNAA, the OBR is required to "on at least two occasions for each financial year, prepare fiscal and economic forecasts", including an assessment of "the extent to which the fiscal mandate has been, or is likely to be, achieved". HM Treasury’s Charter for Budget Responsibility ("the Charter"), which sets out its fiscal policy objectives and is subordinate to the BRNAA, states that the Chancellor must commission the OBR to produce its forecasts at a particular date, at least twice a year and one of which will be for the Budget. The Charter also states that OBR forecasts are to be adopted as the official forecasts for Budget Reports. HM Treasury has agreed with the OBR, via a published Memorandum of Understanding, to provide them with 10 weeks’ notice for a full forecast/fiscal event.
  3. Under the current legal framework, there is no requirement on HM Treasury to subject announcements on all fiscally significant measures to independent OBR scrutiny. The Budget Responsibility Act 2024 therefore ensures that all announcements on fiscally significant measures made by the Government are subject to an independent assessment from the OBR. It does this by requiring HM Treasury, ahead of a Minister making a fiscal announcement to the House of Commons regarding a fiscally significant measure, to commission an economic and fiscal forecast from the OBR. If the Treasury does not make this request and the OBR is of the opinion that the measure is fiscally significant, it places a requirement on the OBR to produce assessments of fiscally significant measures as soon as reasonably practicable.
  4. These measures intend to preserve market stability and public trust in announcements on fiscally significant measures, by ensuring there is independent and transparent scrutiny of the Government’s fiscal plans.

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