The National Audit Office moved swiftly to defend itself this week against a Tory MP’s accusations that it had become a Labour lap-dog.
Former Treasury adviser Andrew Tyrie, now Tory MP for Chichester, last week accused the government of using the independent NAO, which acts as the taxpayers’ watchdog, as a ‘fig leaf’ to enhance the credibility of its financial forecasts.
The claims were made in an exchange of letters between Tyrie and NAO head Sir John Bourn. Tyrie said that the NAO had admitted it did not undertake a full audit of the fiscal projections but had simply examined the assumptions behind the forecasts rather than the projections themselves. He claimed this admission undermined the impression from ministers that the forecasts had the NAO’s backing.
The NAO refused to disclose the contents of the letter, but confirmed that they did exist.
Chancellor Gordon Brown first asked the NAO to assess the assumptions underlying the government forecasts last June. Tyrie’s claimed the government published overly optimistic forecasts to justify the increases outlined in last month’s review of public spending.
Although he welcomed the government’s decision to commission an independent body to assess it’s forecasts, Tyrie questioned the value of such an audit and claimed that the NAO’s work had failed to achieve anything.
A NAO spokesman, who defended the NAO’s work, confirmed that it had been asked to assess the assumptions behind the government’s financial forecasts rather than the projections themselves.
‘We think that there is some value in doing that work. The assumptions feed into the projections and these projections are only as good as the assumptions which they are based on,’ the spokesman said.
‘We do state clearly what our work does and does not cover. We would feel that there is some value in undertaking this kind of assessment.’
A Treasury spokesman declined to comment on the claims, saying the government’s position on the forecast and assessment was ‘made perfectly clear’ in the pre-budget statements.
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