Parliamentary Budget Office (PBO) Releases Third Edition of Uncertainty Scorecard for Budget 2025 Costings

This publication aims to enhance the Oireachtas’ ability to scrutinise the budgetary figures by providing insights into the uncertainty levels in Budget costings.

Assessing the Uncertainty of Budget 2025 Costings: A Scorecard Approach – PBO Publication 6 of 2025

Key Insights:

1. Evaluation of 60 Policy Measures: The PBO assessed 60 policy measures based on information from government departments. Over 50% of these were tax policies, while 22% were related to social protection. The evaluation revealed that “Data” had the lowest uncertainty, whereas “Modelling” had the highest. Significant “Behavioural” uncertainty was noted in tax measures.
2. Major Cost Drivers: Three policies account for 64% of total cost. Eight policies involve tax increases, projected to generate €551 million. The remaining 52 policy changes are estimated to cost €4.33 billion. 90% of these policies cost less than €100 million.
3. Need for Enhanced Modelling and Cost Breakdowns: Omitting the impact of behavioural responses, especially for tax policies, can result in inaccurate cost or revenue yield estimates. Multi-annual cost estimates are crucial for long-term policies.
4. Lack of Detail on Budgetary Costings, Forecasts and Assumptions: The PBO recommends a systematic and transparent framework, along with the publication of detailed methodological information alongside the Budget.
5. Lack of Transparency in Methodology: Particularly for staff costings, as well as a need for improved data integration in the cost estimation process.
6. Need for Retrospective Assessments: Retrospective assessments of budgetary costings should be conducted to refine forecasting methods and enhance accuracy.

Conclusion:

PBO Director Annette Connolly emphasises the importance of transparency and systematic approaches in budgetary costings for effective public finance management.

Read more about the work done by the Parliamentary Budget Office