Mr. Sebastian Barnes:

There are long-standing issues and we have been discussing them in this room, or the one next door, for many years. Things have actually got better and in the past couple of years, the Department had moved to doing medium-term forecasts that were consistent with the Government's stated policy. Last year, it also produced the alternative presentation, which was an alternative table which broke the figures down across departmental areas. We welcomed both those things because they represented a step forward. However, this time around the Department went backwards on both of them. It moved back to the technical assumptions that do not really mean anything while, in the alternative presentation, which gave a very helpful breakdown by Department and which might have helped in the case of health, for example, it put in very low numbers and had a big unallocated amount. This is one of the reasons we used very strong language. Not only is this the wrong way of going about it, which is widely accepted, but it is a slip backwards.

Part of the reason it has happened is that the commitments for the medium term have weakened as well. Forecasting for the medium term is not actually that difficult and, like all forecasts, there will be mistakes but forecasting spending based on demographics is one of the easiest bits of the forecasting we do on the council. The really difficult bit is forecasting policy and in recent years the stated policy was to outperform the EU fiscal rules. The plan is to spend more or less what the expenditure benchmark would suggest, which is only a guide. That allows the Department to do the rest of the work, which was to come up with the forecast that was consistent with that. Unfortunately, there is no reference to that commitment any more. There is no reference to the debt-to-GDP ratio commitment and, by weakening the medium-term fiscal commitments by having less of an anchor and just having a policy to run surpluses and do the right thing, there is nothing which can be translated into forecasts. It is not really a technical forecasting problem but a political commitment problem.

In the letters from the Minister responding to our report, he often says this cannot be done because of parliamentary terms and such things. However, in the past, projections have been made that go beyond the life of a parliament. We understand that if there is an election and a new Government, the plans might change but to us there seems to be no logical reason why a Government cannot, at least for the medium term, set out the continuity of what it is doing as a baseline for others to work on.