RSSeNEWS to be determined...

The recent controversy over employment forecasts published minutes before their use by David Cameron at Prime Minister's Question Time may – in the long run – strengthen the independence of the new Office of Budget Responsibility (OBR), LSE Director Sir Howard Davies has suggested.

The forecasts drew political flack from opposition MPs who questioned whether the OBR had been pressured over timing, or the figures themselves. Subsequently, the Treasury select committee summoned OBR chief Sir Alan Budd on 13 July to respond to doubts over the Office's independence.

There, Budd was asked if he'd been "a little naive in the way the debacle had been handled". He said he "certainly did not anticipate the furore that this action caused and, if that was evidence of naivety, I absolutely accept the charge."

Now Sir Alan has called for the OBR to be moved out of the Treasury and to be allowed to recruit its own economists. Davies believes the government will be obliged to agree to these requests if the OBR is to not be seen as dependent upon Treasury staff.

Davies told listeners to BBC Radio 4's World at One programme (item starts at 21 mins) that the OBR had "not had a good start ...  they made some assumptions about future government policies which were not in the public domain ... indeed decisions which hadn't actually been made – they'd have been much better off not doing that".

But he asserted that under the previous regime it "is now very clear that particularly revenue forecasts were regularly manipulated upwards to make the budget arithmetic work out". At the outset of his tenure Chancellor George Osborne had announced the OBR with the specific intent of preventing such political interference. Initially set up as an interim body, one of its tasks was to provide advice on the arrangements for the permanent OBR.

Davies speculated that "the consequence of this debacle – maybe this is a cunning plan by Sir Alan Budd – will be that we end up with an Office of Budget Responsibility that is more independent – and a broader remit – than we would have otherwise had."

• On 14 July the Treasury committee announced an inquiry into the permanent arrangements for the Office for Budget Responsibility. Legislation is expected in autumn. The committee has asked for submissions of evidence by 13 August to supplement the oral evidence already announced.

Read the interim OBR's advice on the arrangements for the permanent Office, and its full remit