By Archie Mitchell and Rachel Clun, Business reporters
The chairman of the Office for Budget Responsibility (OBR), Richard Hughes, has resigned after an error on Budget day led to a key OBR document being published early.
In a resignation letter, Mr Hughes said he took “full responsibility” for shortcomings identified in the OBR’s investigation into the mistake, which the watchdog described as the worst failure in its 15-year history. The early publication effectively confirmed measures — including a three-year freeze on income tax and National Insurance thresholds — before the chancellor announced them, disrupting the Budget.
This year’s Budget has been controversial, with Chancellor Rachel Reeves accused by opponents of misleading people about the state of the public finances. Sir Keir Starmer defended the chancellor, saying he was “proud” of the Budget.
The OBR is independent of government but works closely with the Treasury, assessing the health of the UK economy. Its report into the mishap said the incident had “inflicted heavy damage on the OBR’s reputation” and had been “seriously disruptive” to the chancellor, but found the release was inadvertent. It concluded the “ultimate responsibility” for circumstances allowing early access lay with OBR leadership.
In a letter to the chancellor and Dame Meg Hillier, chair of the Treasury Select Committee, Mr Hughes said he believed the OBR could “quickly regain and restore the confidence and esteem” it had earned by implementing the report’s recommendations. He added that stepping down would help the organisation “quickly move on from this regrettable incident” and decided it was in the OBR’s best interest for him to resign and take responsibility for the identified shortcomings.
Mr Hughes had been due to face questions from the Treasury Select Committee about the Budget and the OBR’s forecasts, but Dame Meg confirmed he would no longer attend. In response to his resignation, Ms Reeves thanked him for his public service and for leading the OBR over the past five years.
Sir Keir denied the chancellor had misled the public, noting the government had committed to measures including cutting borrowing, which meant it “would always have to raise revenue”. The OBR had told the Treasury earlier that a downgrade to productivity would be offset by higher incomes, boosting tax receipts.
Conservative leader Kemi Badenoch said: “Someone has resigned as a result of the Budget chaos… but it isn’t Rachel Reeves. The chancellor is trying to use the chair of the OBR as her human shield.” Paul Johnson, former director of the Institute for Fiscal Studies, said he was not surprised by the resignation, calling the error “a really bad mistake” but describing Mr Hughes as a “very effective and very robust” head of the OBR.
Mr Hughes had recently begun a second five-year term after being renominated by the chancellor in May. He first became OBR chair in October 2020, during the Covid pandemic. Previously he was director of fiscal policy at the Treasury and spent eight years as division chief of the IMF’s fiscal affairs department.
The OBR brought in Ciaran Martin, former chief executive of the National Cyber Security Centre, to investigate how forecasts were accessed early. His inquiry found no reason to suspect foreign actors, cyber-criminals, or internal connivance. Key findings included that the analysis was available at a hidden URL between 11:30 and 12:08 on Budget morning, it was accessed 43 times from 32 devices, and an attempted access had occurred at 05:16.
The report said the problem was a pre-existing weakness in the OBR’s publication system. The software chosen to publish to the website was more suitable for a small or medium company than for releasing market-sensitive data. Two errors in WordPress setup bypassed intended safeguards: a plug-in unintentionally removed the need to log in to access documents slated for future publication, and the directory used for the file allowed anyone to download it directly.
The OBR had obtained an exemption in 2013 from using a more secure government publishing platform for independent authorities to preserve its autonomy. In other IT areas, such as secure email, the OBR used Treasury systems.
A Treasury spokesperson thanked the OBR for its report and said a minister would respond “in due course.”
