Appointment of Professor Sir Charles Bean to the Budget Responsibility Committee of the Office for Budget Responsibility Contents

Appendix 3: Office for Budget Responsibility Candidate Brief

Appointment of Budget Responsibility Committee Member of Office for Budget Responsibility

The information provided in this document is for background information only. As such it does not constitute the terms, whether express or implied, of any future contract of employment.

The Office for Budget Responsibility

The OBR was created in 2010 to enhance the accountability of the Government, by shining a light on the position of the public finances and the long-term impact of Government decisions. The independent OBR has executive responsibility for producing the official UK economic and fiscal forecasts and assessing progress against the fiscal mandate. The OBR is a small organisation with disproportionate influence, employing 21 members of staff and with a budget of around £2.5 million per annum.

Work of the Office

The main legislative duty of the OBR is to examine and report on the sustainability of the public finances. Policy-making is the responsibility of government ministers and the OBR is legislatively prevented from providing normative commentary on the merits of government policy. However the Office’s objective and impartial analysis is key in informing the policy decisions made by ministers and the wider understanding of the UK’s public finances.

Within its broader remit the OBR is specifically required to produce:

The OBR has broad discretion in how it fulfils its remit and additionally produces a wide range of working and discussion papers on topics relating to sound and sustainable public finances.

Producing Forecasts

The OBR’s forecasts are essential inputs to the government’s ongoing policy making. The establishment of the OBR enhanced the transparency and credibility of the government’s official economic and public finance forecasts in two ways – by tasking the production of forecasts to an independent and objective organisation, and subsequently publishing more information than has ever been made public previously.

The OBR is responsible for the production of the economic and fiscal forecasts – to date these forecasts have been adopted by the Chancellor as the UK’s official forecasts.

The forecasting process starts with the production of an initial economic forecast by OBR staff. This forecast takes into account information that has emerged since the last published forecast and reflects BRC judgements and assumptions. The OBR consults widely with external forecasters and analysts to ensure they are aware of as much relevant data and evidence as possible. This initial view on the shape of the economic forecast is used to produce the key fiscal determinants, allowing production of the public finance forecast to begin.

The public finance forecast is highly disaggregated, and the production of the majority of individual tax and spending lines is undertaken by a wide range of expert analysts working across government. The OBR scrutinises and challenges the assumptions and modelling for all of the individual elements of the forecast and makes adjustments where necessary. The BRC takes ultimate responsibility for the entire forecast and all of the underlying assumptions. These forecasts are brought together by the OBR, resulting in a detailed bottom-up up forecast of the public finances consistent with the economic forecast.

This is the start of an iterative process that continues over several rounds - with subsequent economy forecasts incorporating the output from the previous public finance forecast and vice versa. The economy and public finance forecasts are interdependent so these iterations ensure that the effects of changes to one element of the forecast are fully reflected in the forecast as a whole. The OBR also assesses the potential economic impact of any new policy measures that the Chancellor plans to announce alongside their forecast. The BRC judge whether these measures are likely to have a non-negligible impact on the economic outlook and, if so, how to adjust the forecast accordingly.

OBR forecast

Governance

The OBR’s organisational structure can be split into 4 key components, shown below:

OBR’s organisational structure

Budget Responsibility Committee

The Budget Responsibility Committee provides the executive leadership for the OBR as it carries out its core functions. This includes providing strategic leadership by determining how the OBR can fulfil its remit of examining and reporting on the sustainability of the public finances. In practical terms the BRC’s role includes, but is not limited to, scrutinising forecast returns from government departments and making forecast judgments to produce economic and fiscal forecasts, determining the sustainability issues to be analysed by the OBR and providing long term insight into fiscal risks and welfare trends.

The BRC is made up of three members, one of whom is the Committee’s Chair. Appointments to the BRC are made by the Chancellor of the Exchequer with the agreement of the Treasury Committee. The Chancellor of the Exchequer is required to consult the Chair of the BRC for appointments to the two other positions on the BRC. BRC members are generally appointed for 5 year terms and are eligible to be reappointed once at the end of that term.

Oversight Board

The OBR’s Oversight Board are accountable for ensuring the operations of the OBR conform to its legislative mandate. This includes monitoring the relationship between the OBR and government departments to ensure independence, and provide assurance on risk management, governance and internal control. The Oversight Board is comprised of the three members of the BRC and the two non-executive members, currently Lord Burns GCB and Dame Kate Barker CBE. The non-executive members contribute to the assessment of whether BRC members are suitable for reappointment and keep under review the extent to which the OBR is delivering against its duties under the Budget responsibility and National Audit Act and associated guidance.

Advisory Panel

The BRC are supported by an Advisory Panel of economic and fiscal experts. The panel meets annually to advise the OBR on its work programme and analytical methods. Panel members also provide OBR staff and the BRC with ad hoc advice on specific issues when requested.

OBR Staff

The OBR currently has 21 members of staff and analysts. Staff members work within teams covering economic analysis, fiscal analysis, analysis of welfare spending, policy costing and devolution, long-term sustainability analysis and strategy, operations and communications. The OBR staff and analysts are led by a Head of Staff.

The Ramsden Review

In summer 2015 the Chancellor asked Sir Dave Ramsden to conduct a review of the OBR4, to support and strengthen the Office and put it on a more sustainable footing for the next 5 years. The review concluded that the OBR has made substantive progress in improving the credibility of the UK’s fiscal framework but that the organisation would face new challenges over the coming Parliament, including changes to membership of the BRC, turnover of long standing staff and fiscal devolution. Sir Dave made a number of recommendations to enhance the role of the OBR – ensuring that the OBR is a well-established institution operating with increased resilience and capacity, and seen as truly independent of the government that established it. Work is ongoing to implement the recommendations of the review - increasing security of the OBR’s budget, working to maintain capability at all levels and broadening the relevance of the Office to both Parliament and the public – making this an exciting time to join the Office’s executive leadership.

Candidate Profile and appointment criteria

This is a high profile and important role. Under legislation, the Chancellor of the Exchequer shall appoint a member to the BRC only if that person has knowledge or experience which is likely to be relevant to the Committee’s functions.

The Ramsden review of the OBR concluded that personnel have been the driving force behind the Office’s successes and that the BRC in particular have played an important role in establishing and building credibility. As such the Chancellor is committed to ensuring that the reputation and quality of the BRC’s membership is maintained.

The requirements for this role are as follows:

Terms of Appointment

Members of the BRC are appointed by the Chancellor of the Exchequer with the consent of the Treasury Committee. Appointments to the BRC are for a five-year term. There is the possibility of reappointment at the end of the term and members can serve a maximum of two terms.

The appointment is expected to commence between September and December 2016, with some flexibility on start date.

Members of the BRC are appointed as office holders at the OBR and it is HM Treasury that sets the terms of the appointment. The contract is a temporary non-pensionable contract for the fixed term. This post can be undertaken on either a part or full-time basis. BRC members are required to request the consent of the Chancellor prior to taking any appointment, employment, or other duties that might lead to a conflict with BRC responsibilities.

The full-time remuneration for the role would be £121,330 and can be reduced proportionately if the successful candidate wishes to serve on a part-time basis, for example to £72,798 for a 3 day working week. The stated remuneration includes compensation in lieu of pension and is up-rated annually in line with CPI.

BRC members are not required to hold UK nationality, but to fulfil their duties are expected to be resident in the UK.

Most functions of the Budget Responsibility Committee are carried out in the Office’s Victoria Street accommodation in London. The Office is expected to move to a new building within the new BRC member’s term of office, however the OBR is expected to remain in close proximity to the current building.

How to apply and appointment process

How to Apply

Applications should be submitted to this email address:

BRCappointments@hmtreasury.gsi.gov.uk

You need to provide the following information:

The application and monitoring form for this appointment can be found under this listing on the Cabinet Office jobs board: http://publicappointments.cabinetoffice.gov.uk

Your application will be acknowledged shortly after receipt and you will be informed by email or by telephone of the progress of your application.

Applications must arrive no later than the end of Friday 15th April 2016.

If you have any queries concerning your application, or technical queries on completing the application, please email BRCappointments@hmtreasury.gsi.gov.uk

Appointment Process

Once the closing date for applications has passed, applications will be sifted according to the candidate profile. Those applicants who have not been successful will be notified at this stage and a short list of the most closely qualified applicants will be invited to final panel interviews, which will be held in London. The successful candidate must attend a pre-appointment hearing with the Treasury Committee, who have a veto on BRC appointments.

The closing date for applications is Friday 15th April. Interviews are expected to take place on or around 11th May 2016. The successful candidate is expected to be announced in the summer and the appointment will commence between September and December 2016, subject to the requirements of both the successful candidate and the OBR.

Expenses

If you are invited for interview, reasonable and necessary travel expenses (standard class) will be reimbursed. Those invited to interview will be advised on how to claim their expenses.

Equality of Opportunity

The OBR is committed to ensuring it has a truly diverse workforce. All disabled applicants will be guaranteed an interview by HM Treasury, provided they meet the minimum criteria for the post, and state their eligibility in their covering letter.

If you feel you have reason for complaint about the appointment process or the manner in which your application was handled, please contact Human Resources, HM Treasury, Rosebery Court, Norwich, NR7 OHS.

Also contactable at hrrecruitment@hmtreasury.gsi.gov.uk.

The 7 principles of public life5

The 7 principles of public life apply to anyone who works as a public office-holder. This includes people who are elected or appointed to public office, nationally and locally.6 The principles also apply to all those in other sectors that deliver public services. They were first set out by Lord Nolan in 1995 and they are included in the Ministerial code.

1. Selflessness

Holders of public office should act solely in terms of the public interest.

2. Integrity

Holders of public office must avoid placing themselves under any obligation to people or organisations that might try inappropriately to influence them in their work. They should not act or take decisions in order to gain financial or other material benefits for themselves, their family, or their friends. They must declare and resolve any interests and relationships.

3. Objectivity

Holders of public office must act and take decisions impartially, fairly and on merit, using the best evidence and without discrimination or bias.

4. Accountability

Holders of public office are accountable to the public for their decisions and actions and must submit themselves to the scrutiny necessary to ensure this.

5. Openness

Holders of public office should act and take decisions in an open and transparent manner. Information should not be withheld from the public unless there are clear and lawful reasons for so doing.

6. Honesty

Holders of public office should be truthful.

7. Leadership

Holders of public office should exhibit these principles in their own behaviour. They should actively promote and robustly support the principles and be willing to challenge poor behaviour wherever it occurs.


4 https://www.gov.uk/government/publications/hm-treasury-review-of-the-office-for-budget-responsibility

6 The Civil Service, local government, the police, the courts and probation services, non-departmental public bodies, health, education, social and care services.




© Parliamentary copyright 2015

12 September 2016