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OBR to undergo external review, but is there any cause for worry?

External reviews are suddenly all the rage. The Bank of England has called in a QC to examine what it knew about foreign exchange rigging in the City. The Financial Conduct Authority is commissioning an external probe into the insurance policy fiasco.


And now the Office for Budget Responsibility (OBR), the Treasury's watchdog-cum-forecaster, has become the latest official body to ask an outsider to sit in judgement on its work.

Over the summer the Canadian academic, Kevin Page, will review the work of the OBR. Unlike those other external reviews, the Page probe is not examining allegations of staff misconduct or incompetence: under the terms of its charter, the OBR's board was required to commission the review at some stage before 2015.

But the Page review could potentially make for some awkward reading for the relatively small team at the Victoria Street office block, where the OBR has been housed since it moved out of the Treasury back in 2011.

Yet if Robert Chote, the chairman of the OBR for the past three-and-a-half years, is worried about what Mr Page will say when he reports in the autumn, he's hiding it very well. "It's very good to have external scrutiny," the 46-year-old insists, perched on a small couch in a nook of his functional, open-plan office. "Having something that's independent means it's less likely to be used as a source of indirect political pressure than if it was a process within government," he adds.

One area that Mr Page, Canada's former Parliamentary Budget Officer, will need to scrutinise is the OBR's effectiveness in defending the integrity of the public finances. Does this watchdog have fangs?

Some are sceptical. Back in 2010 the OBR trimmed its public sector job loss projections in a way seen as helpful to the Coalition. And in the 2012 Autumn Statement, before the recovery arrived, George Osborne moved heaven and earth to ensure he could announce that the deficit was projected to fall in cash terms, despite all the economic data pointing to an embarrassing increase.

The chancellor pressured Whitehall departments into finding last-minute spending cuts, even delaying small payments to the World Bank in order to get under the wire. The Institute for Fiscal Studies, which Mr Chote used to head before moving to the OBR, said this was a waste of officials' time. Yet Mr Chote signed off on what the treasury did. Shouldn't the watchdog have barked?

Mr Chote denies it. That desperate Whitehall scramble for savings was, he says, in fact a sign of success for the new disciplinary framework. "The striking thing is that in the old days [achieving a declining deficit] would have been fairly straightforward: a little bit of spreadsheet magic in the treasury would have sorted that out very nicely. That is no longer available."

That mention of "the old days" raises a sensitive question. As an economic journalist for The Independent and then for the Financial Times, Mr Chote had some bruising experiences at the hands of Gordon Brown's treasury team, which includes the present Shadow Chancellor Ed Balls. The government didn't much like what Mr Chote wrote, particularly a story reporting that the treasury was putting pressure on the newly independent Bank of England. It was, colleagues recall, a painful period for the young journalist.

So if Labour were to prevail in next year's general election could he work harmoniously with a Labour chancellor? "Absolutely," he says. "I see Ed Balls, erm, not frequently but from time to time. I'd have no difficulty working with the other parties. Ed has been arguing that we should have an extended role rather than a narrower one. That's nice."

But does he want to continue once his five-year term ends in 2015? Here, he is more circumspect, saying he hasn't thought about that yet. "I would suspect and very much hope that, should it come to wanting to replace me, that's something that the Chancellor would talk to the other parties about before the next election. You wouldn't want to do it if the opposition parties didn't want you to do the job." He pauses then adds: "I'm not desperate for early release!"

For one thing, he would be further away from his family. Mr Chote's wife, Sharon White, was last year promoted to second permanent secretary for finance, becoming the treasury's most senior female official. But doesn't this connection represent a potential conflict of interest for Mr Chote, whose job is, after all, to police the treasury?

He says he does not have any "substantial interaction" with his wife as part of the job, and points out that he has been in the same room as her only once at work.

But given that their professional lives both revolve around the public finances, don't they find it impossible not to talk about the subject out of hours? "No, it's normally [about] who's picking the kids up," he laughs. He adds that there wouldn't be sensitive information to exchange anyway: "We're trying to be transparent, so it's not as though I would have any great secrets."

Does he miss journalism? He admits to the occasional twitch of thinking "that's a good story", before remembering he doesn't have anyone to write it for. But he sees a continuum in his work: "I basically bring the same attitude to this job that I did when I was a hack," he says. "It's about trying to explain to people what's going on fundamentally [in public finances]. That's what I thought I was doing at The Independent, what I thought I was doing at the Financial Times, at the IFS – and the same thing here."

Belfast Telegraph