But I’ll admit I don’t actually know, not doing much macro:
In the paper Ronen Palan and I put it as follows:
The government forecaster – the Office for Budget Responsibility (OBR) – is adopting a low, and in our view, unrealistic multiplier for government spending (range of 0.6 to 1.0). This is much lower than the one adopted by the IMF (0.9 to 1.7) or Standard & Poor (up to 2.5). The low multiplier adopted by the OBR has led to persistent overestimation of the benefit of austerity and constant upwards revision of public borrowing needs.
The multiplier is explained here. In summary:
In economics, the fiscal multiplier is the ratio of a change in national income to the change in government spending that causes it.
To put it more directly: the government and Office for Budget Responsibility assume every pound of government spending shrinks national income and, in reverse, every pound of cuts increases national income.