OBR under new pressure for cutting job loss forecast before Osborne's budget

The government's new tax and spending watchdog was plunged into fresh controversy last night after it was revealed that the Office for Budget Responsibility slashed its forecasts for expected job losses from George Osborne's austerity package in the days leading up to last month's budget.
Treasury sources confirmed that the OBR had made "methodological changes" to its forecasts in the 10 days leading up to the chancellor's emergency package of measures which led to a far smaller reduction in public sector employment over the next five years.



The OBR said last week that 499,000 jobs would be lost in the public sector as a result of the deepest cuts in government spending since the second world war, but reduced the total by 175,000 after making assumptions about pensions and pay.
A Treasury spokesman denied last night that any pressure had been put on the OBR to make its forecasts for job losses more politically acceptable to the coalition government. "The OBR themselves made some methodological changes between the pre-budget report and the budget. The Treasury did not put any pressure on the OBR to make the employment forecasts more favourable to the government."
But Sir Alan Budd, the interim head of the OBR is expected to face searching questions over the changes when he appears at the Treasury committee next Tuesday.
The OBR rushed out details of its employment forecasts the day the Guardian revealed details of internal Treasury estimates showing that the budget would cost up to 1.3m jobs in the public and private sectors during the current parliament. Budd announced earlier this week that he would be leaving the OBR at the end of the month, although the Treasury said this was a planned departure and had nothing to do with the questions asked about the watchdog's independence in the wake of the jobs' announcement.
The OBR made the changes to its employment forecasts in the 10 days between its pre-budget report and the budget on 22 June. Its new forecasts showed that job losses in the public sector would be just under 500,000 by 2014-15 – only slightly higher than the 460,000 under plans previously announced by Labour – rising to just over 600,000 by 2015-16.
However, the original estimates from the OBR showed that by 2015-2016 public sector job losses would be just short of 800,000.