1.48 The Government's fiscal strategy is underpinned by clear targets that ensure the public finances are set on a sustainable path. As announced in the June Budget 2010, the Government has set a forward-looking fiscal mandate to achieve cyclically-adjusted current balance by the end of the rolling, five-year forecast period. This fiscal mandate is based on:
• the current balance, to protect the most productive public investment expenditure;
• a cyclically-adjusted aggregate, to allow some fiscal flexibility at times of economic uncertainty; and
• a rolling five-year forecast period, ensuring that fiscal consolidation is delivered over a realistic and credible timescale and providing flexibility in the current exceptional economic environment.
1.49 As set out in the April 2011 Charter for Budget Responsibility, the OBR publish forecasts of the economy and public finances for a period of at least five financial years following the date of publication.16
1.50 In line with this approach, the forecast horizon for the June Budget 2010, Autumn Statement 2010 and Budget 2011 extended five financial years to 2015-16. At the Autumn Statement, which takes place in a new financial year, the end of the forecast horizon extends to 2016-17.
1.51 The fiscal mandate is supported by a supplementary target for debt that requires public sector net debt as a percentage of GDP to be falling at a fixed date of 2015-16, ensuring that the public finances are restored to a sustainable path.
1.52 The creation of the OBR has significantly enhanced the credibility of the UK's fiscal position by ensuring that the Government's performance against these targets is scrutinised and assessed impartially, independent of ministers. The establishment of the OBR has placed the UK at the forefront of institutional reform internationally.17
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16 Available on the HM Treasury website at www.hm-treasury.gov.uk.
17 Article IV staff report, IMF, July 2011.