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Budget Responsibility Act 2024

Contents

Legal background

  1. The statutory framework for the OBR is set out in:
    1. The Budget Responsibility and National Audit Act 2011 ("the BRNAA") - which establishes the OBR on a statutory basis and sets out the OBR’s statutory duty to examine and report on the sustainability of public finances; and
    2. HM Treasury’s Charter for Budget Responsibility ("the Charter") – which was introduced in the BRNAA, and which sets out the OBR’s remit, how it should perform its duties, the required content of key publications, and arrangements for determining forecast timing. It also sets out the fiscal framework against which the OBR should assess the Government’s fiscal plans. The Charter is drafted by HM Treasury, must be laid before Parliament, and does not come into force until approved by the House of Commons. Any modification to the Charter concerning guidance as to how the OBR’s duty is to be performed must also be published in draft 28 days before it is laid in Parliament.
  2. In addition, a Memorandum of Understanding ("the MoU"), which is jointly agreed between HMT, the OBR, HM Revenue and Customs and the Department for Work and Pensions, establishes the processes and expectations for information sharing, notification of publications, and working arrangements ahead of fiscal events.
  3. Neither the BRNAA nor the Charter require the OBR’s assent to modify, but they do require Parliamentary approval:
    1. Amendments to the BRNAA require primary legislation in the usual way; and
    2. Amendments to the Charter must be laid before Parliament and approved by a vote of the House of Commons. The updated Charter must be published in draft at least 28 days before it can be laid before Parliament where i) the Charter is modifying guidance as to how the OBR’s duty is to be performed, or ii) the Charter is making provision for the purpose of supplementing the new section 4A of the BRNAA introduced by the Budget Responsibility Act 2024.

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