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LONDON (Reuters) - Britain's Conservative-led government was forced to defend itself on Thursday from accusations that it massaged borrowing figures to claim the deficit this year would be lower than last.
Chancellor George Osborne was cheered on Wednesday when he told parliament public borrowing would fall from 121 billion pounds this fiscal year to 120.9 billion pounds in 2013/14 - despite tax receipts coming in 5 billion pounds weaker than he predicted in December.
The feat, according to the Institute for Fiscal Studies, Britain's leading academic body on budget matters, was only achieved by pushing some departmental spending normally made in February and March into the new financial year.
It pointed to small print in documentation supporting the annual budget that acknowledged that at least 1.6 billion pounds of this year's spending shortfall was "the direct result of the government's actions to reduce spending in 2012/13 by pushing money forward into future years".
"There is every indication that the numbers have been carefully managed with a close eye on the headline borrowing figures for this year," said IFS director Paul Johnson.
"It is unlikely that this has led either to an economically optimal allocation of spending across years or to a good use of time by officials and ministers."
He noted that Britain's disappointing growth performance meant the government would now borrow 70 billion pounds more in 2014/15 than it envisaged in its first budget plan in June 2010.
The accusation of creative accounting is an embarrassment for Osborne, who has staked his reputation on getting government borrowing under control and who, in opposition, ridiculed successive Labour finance ministers for fiddling budget figures.
One of his first acts in government was to set up an independent fiscal forecaster, the Office for Budget Responsibility (OBR), to try to make the government's economic policymaking more credible.
"When he created the OBR, Osborne said the government would now have to fix the budget rather than fix the figures," said IFS researcher Gemma Tetlow. "I'm not sure the general public would have had quite this in mind," she quipped.
A finance ministry official defended the budget figures, saying the government was merely attempting to clamp down on last-minute surges in departmental spending that have previously characterised the fiscal year-end.
Reporting by Christina Fincher; editing by Ron Askew