a post by Matthew Whittaker for the Resolution Foundation blog
With everything that’s going on in British politics right now, it’s easy to forget that the government was celebrating some seriously good news just seven weeks ago. You might remember that the Chancellor got handed a £74 billion fiscal windfall at the Budget that allowed him to deliver the long-promised extra spending on the NHS without having to make any significant changes to his borrowing plans or push through any controversial tax rises. Indeed, he was even able to throw in an income tax cut and restore some previously-removed funds to the Universal Credit budget. Things have, of course, turned a little sour for the government since then. And they may just have got a little bit more difficult again as of today.
Usually it’s the Office for Budget Responsibility’s (OBR) sofa down the back of which extra money is found and lost; this time however it’s the moving of furniture at the Office for National Statistics (ONS) that matters. Specifically, it’s today’s conclusion of the ONS’ review of the accounting treatment of student loans that will be concerning Philip Hammond. It’s a technical exercise, and ultimately it won’t change the true cost to government of providing student loans. But, by changing the presentation of that cost, it could well have big implications for the Chancellor’s fiscal rules.
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There are links to some explanatory stuff as well as the clearly set out information in the blog post itself.
Even I understood it.
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