OBR: Government spending plans beyond 2025 'worse than fiction'

Office for Budget Responsibility chief Richard Hughes says the government has provided almost no detail on how it is going to deliver plans
Richard Hughes. Photo: Parliamentlive.tv

By Tevye Markson

24 Jan 2024

It woud be "generous" to describe the government's spending plans as "fiction", the Office for Budget Responsibility chair has said.

Richard Hughes slammed the lack of detail the government gave on its departmental spending plans beyond 2025 at the Autumn Statement in a House of Lords Economic Affairs Committee session.

Hughes said the OBR’s forecasts rely on the information given by government about its “desired path” for spending on public services. But he said the government has provided almost no detail on how it is going to deliver its long-term plans and so the budget watchdog is having to base its forecasts on the government’s broad assumptions about day-to-day and capital spending.

“The government did a spending review, setting out detailed departmental spending plans for the year up until 31 March 2025. Beyond that, we know virtually nothing,” Hughes said.

“It is just two numbers, one for total current spending and one for total capital spending done by departments. And I think some people have referred to that as a work of fiction. I think that's probably generous given that someone's bothered to write a work of fiction, whereas the government hasn't even bothered to write down what its departmental spending plans are underpinning the plans for public services."

Hughes said the OBR also had to programme into its forecasts the "questionable policy assumption" that fuel duty will rise in line with inflation. 

"In fact, it's been frozen in every year since 2010. That delivers £6bn of that improvement in the primary balance. If that doesn't happen, you're already £6bn down," he said. 

In November, Hughes told MPs that he could not say whether Jeremy Hunt’s spending plans in the Autumn Statement were “plausible or not”.

He told the Treasury Select Committee that the chancellor had only provided vague figures for the years beyond the spending review period, which ends in April 2025.

“Because he hasn’t provided any detail on the choices required to meet those numbers, we don’t know whether they’re plausible or not,” Hughes said of Hunt’s figures.

“It is an unusual feature of our system that the government doesn’t tell us anything in detail about its spending plans beyond a spending-review period," he added. "What it leaves us having to do is essentially a simulation exercise, which is to take the overall envelope for public spending, take what the government is committed to do in particular service areas like education, like health, like defence. And then try to interpolate what that means for the rest of Whitehall in terms of real cuts.”

A Treasury spokesperson said: “Total departmental spending will be £85bn  higher after inflation by 2028-29 than at the start of this Parliament, including record funding for the NHS.

“We are focused on creating a more productive public sector, not a larger one, by reducing admin workloads, introducing early interventions and safely bringing in new tech like AI. This will stop the state growing ever larger and ensure taxpayers’ money is spent on the public’s priorities.”

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