The furore over hacking should not be allowed to crowd out another event of great long-term significance. Yesterday saw the publication of the Fiscal Sustainability Report by the Office of Budget Responsibility.
This is a major new piece of work assessing the overall sustainability of the nation's finances over the next 50 years. But the report also continues the work of cleaning up the nation's balance sheet, by including contingent liabilities and provisions for the first time.
The newspapers have commented extensively on the major findings: the true liability for public sector pensions at £1,133 billion is £71 billion higher than last year, even when the effect of falling interest rates (which automatically push up the number) is removed.
What is still more telling is that PFI liabilities have risen from £5 billion to £40 billion, or 2.9 per cent of GDP.
This 8-fold increase can't be explained by falling interest rates. It has arisen because the OBR classifies many more PFI deals as on balance sheet – i.e: as actually creating a preponderant liability for the public sector.
In other words, it is assessing the risk differently to the ONS. Since one of the scandals of the PFI has been the lengths to which the private sector and the last government went to push liabilities off-balance sheet, this is a real step forward, and one which rams home yet again the importance of making savings on PFI, as I have argued elsewhere.
What we need now is a full on-balance sheet treatment of PFI in the National Accounts themselves. This is no trivial matter, since it would have deep effects across other areas of government spending, internationally. But thanks to the OBR we now have a clear direction of travel.