Economic watchdog chief Budd said he was mad to take the job

Sir Alan Budd, chairman of the newly formed Office for Budget Responsibility, said he must have been mad to take the job, but is hopeful a successor can still be found when he steps down.

'I of course wasn't in my right mind when I took this job. No-one in their right mind would take a job where your success is going to be judged on your success in producing fiscal forecasts,' he told the influential Treasury Select Committee today.

Other members of the three-man OBR committee also pointed to the difficulties faced by anyone doing what they called an 'impossible' job.

Geoffrey Dicks said the committee had met 'hundreds' of times and made a number of decisions - in stark contrast to the Bank of England's interest rate-setting Monetary Policy Committee which meets just once a month and makes just one decision.

Budd's time at the newly formed body has been marred by widespread criticism about the independence of its forecasts and he said last week his task had been 'painful’. 

His decision not to renew his contract was met with concern and suggestions he had grown tired of interference by the Treasury.

Last week the OBR issued its plan to ensure the department will be independent of the Treasury and the chancellor.

Former MPC member David Blanchflower has said that without Budd at the helm the OBR it will be even more difficult for the body to produce independent economic forecasts, something Budd has repeatedly denied. 

Asked today whether he thought it would ever be possible for the OBR to be as independent as the MPC is seen to be, he said hopes so.

'The remit of the OBR is somewhat wider. It is going to be hard but I certainly hope the OBR would achieve the type of reputation the MPC has achieved.'

Budd said it is clear that if the chancellor decided in the future to ignore forecasts made by the OBR, the OBR would not hide that fact and would make it clear the government’s policies were based on forecasts that are inconsistent with the views of the economic watchdog.

And he said that if the OBR had existed under the previous government it would not have been possible to fudge the so-called Golden Rule on government borrowing over an economic cycle and would not have lost its credibility.