POLITICS

Budget 2013: George Osborne Accused Of Fiddling The Books To Avoid Political Embarrassment

21/03/2013 15:54 GMT | Updated 25/03/2013 19:10 GMT

George Osborne has been sharply criticised by the director of the Institute for Fiscal Studies (IFS) for shifting spending into next year in order to avoid political embarrassment.

Paul Johnson said the chancellor wasted civil servants' time by asking them to find a way to allow him to say he will be able to bring borrowing in this year below last year's total - down from £121 billion to £120.9 billion.

"There is every indication that the numbers have been carefully managed with a close eye on the headline borrowing figures for this year. It is unlikely that this has led either to an economically optimal allocation of spending across years or to a good use of time by officials and ministers," Johnson said.

Speaking at a post-Budget briefing in central London on Thursday, Johnson said: "The truth is that borrowing is the same this year as it was last year and it will be the same next year as this year. Because of that, this year's precedent suggests that there must be a risk that effort will be expended again next year to shift spending into 2014-15."

Johnson said the borrowing figures were "desperately disappointing" for Osborne, who would now have to borrow £70bn more in 2013-15 than he had originally hoped.

The IFS also warned that Wednesday's Budget could lead to "severe" public spending cuts and possible tax rises after the next election in 2015.

The economic forecaster said that given healthcare, schools and international development were protected from spending cuts the outlook for other departments was "grim".

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"While the overall spending envelope has not been increased since the eye wateringly tight one implied by the Autumn Statement, nearly £5bn of additional spending on capital, childcare and social care has been committed to. That leaves even less for everything else," Johnson said.

The economic forecaster said the chancellor's decision to cancel the rise in fuel duty and increase the income tax allowance threshold and cut corporation tax meant he would be spending a "remarkable" £24bn a year on those changes by 2016-17.

"That would be a big investment at any time. In the current fiscal climate this is a striking investment in an arrow range of priority areas," he said.

Osborne was defended by former Tory chancellor Norman Lamont, who told HuffPost UK he did not believe there had been a "fiddling of the accounts" as Treasury officials "don’t let you get away with" such "tricks".