Managing fiscal risks (MFR) provides a comprehensive account of the actions the government is taking to address the 57 fiscal risks identified by the Office for Budget Responsibility (OBR) in their first 2017 Fiscal Risks Report (FRR). It provides a mechanism for Parliament and the public to assess the government’s strategies for managing these risks and hold it to account for their implementation. This document marks the first government response to the OBR’s biennial FRR and with its publication, the UK sets a new global standard not only for the disclosure of fiscal risks but also for their active management.
The report begins with a discussion of the government’s overall strategy, institutions, and toolkit for managing fiscal risks (Chapter 1). Subsequent chapters describe the actions the government is taking to manage the fiscal risks arising from the macroeconomy (Chapter 2), financial sector (Chapter 3), government revenue (Chapter 4), public spending (Chapter 5), and the public sector balance sheet (Chapter 6). Annex A provides a complete register of where each of the 57 risks identified by the OBR are addressed in this report and the ministry or agency that is responsible for their management. The document benefited from discussions with representatives from the OECD, IMF, Office for Budget Responsibility, Institute for Fiscal Studies, National Audit Office, National Institute of Economic and Social Research, Resolution Foundation and the Finnish Treasury, whom HM Treasury thanks for their input.