Supplementary written evidence submitted
by HM Treasury
You asked members of the Budget Responsibility Committee
about the net costs of the
Office for Budget Responsibility's operations in
your hearing with them on 6 December. I am responding, since your
question is best understood in the context of wider changes in
the Treasury.
As you know, the Office for Budget Responsibility
has been given a multi-year spending settlement of £1.75
million a year flat cash over the Spending Review period. The
cost of the establishment and running of the OBR is being funded
from within the Treasury settlement.
Over the spending review period as a whole the Treasury
Group settlement requires cuts of 33 per cent. By 2014-15 the
combined cost of HM Treasury and the OBR will have fallen compared
to an April 2010 baseline, in advance of the OBR's establishment
on an interim basis.
The establishment of the OBR involves transferring
some responsibilities from HM Treasury to the OBR through machinery
of government processes. For example, 12 current OBR staff positions
were formerly part of the Macroeconomic and Fiscal Policy Directorate
in HM Treasury.
However, transfers of staff provide only a partial
understanding of the net cost of the OBR since the establishment
of the OBR has led to changes in responsibilities within parts
of the Treasury and because of staffing changes also being undertaken
as a result of the Treasury's spending review settlement. In April
2010, prior to the establishment of the Interim Office for Budget
Responsibility, there were 130 full time equivalent staff in the
Macroeconomic and Fiscal Policy Directorate. In total there are
currently 115 full time equivalent staff in this Directorate.
I agree with your Committee on the importance of
transparency in the resources provided to the OBR. As set out
in the OBR's Terms of Reference, there will be a separate disclosure
relating to the costs of the OBR in the notes to the Treasury's
resource accounts for the financial year 2010-11. Resources provided
to the OBR by the Treasury will be clearly set out in the Treasury's
accounts at year end which will be laid before Parliament, and
in future will also be made clear through the Estimates process,
where the OBR will have at least one separate line in the Treasury's
Estimate.
22 December 2010
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