Public finance bulletin: April 2013

Today the Office for National Statistics and HM Treasury published Public Sector Finances March 2013. We now have provisional details of central government receipts, central government spending, public sector net investment, borrowing and debt for the whole of financial year 2012−13.

Rowena Crawford, a Senior Research Economist at the IFS, said:

“Today’s figures provisionally show that the Government borrowed £120.6 billion in 2012–13, which is very slightly less than the Office for Budget Responsibility forecast a month ago. Chancellor George Osborne will doubtless be relieved that the effort made in the Budget to ensure borrowing fell between 2011–12 and 2012–13 appears, for now at least, to have been successful. However, a fall in borrowing of £0.3 billion is negligible and backwards revisions to data are common, so today’s figures will not be the last word on the matter.

Whether borrowing is slightly lower or slightly higher in cash terms from one year to the next is not of any direct economic importance. What is important is the bigger picture. The deficit has fallen in cash terms by almost one-quarter between 2009–10 and 2011–12. Last year saw further austerity measures being implemented, but weak economic performance has meant that the deficit was largely unchanged from its 2011–12 level. The same is also forecast to be true of the current financial year.”

Headline Comparisons

• Public sector net borrowing, excluding the impact of transfers related to the Royal Mail Pension Scheme and the Asset Purchase Facility, totalled £120.6bn in 2012−13. This is £0.3bn lower than forecast by the Office for Budget Responsibility (OBR) in their March 2013 Economic and Fiscal Outlook, and £0.3bn lower than the £120.9bn borrowed in 2011–12.

• Public sector net investment, excluding the impact of transfers related to the Royal Mail Pension Scheme, was £22.0bn in 2012−13 as was forecast by the OBR in March 2013.
• The public sector current budget deficit in 2012−13 was £98.5bn, excluding the impact of transfers related to the Asset Purchase Facility, which is £0.3bn lower than the £98.9bn forecast by the OBR in March 2011.
• Underlying public sector net debt at the end of March 2013 stood at 75.4% of national income, which is slightly lower than the 75.9% forecast by the OBR in March, but higher than the 71.8% of national income in March 2012. Including the impact of the financial interventions raises headline public sector net debt to 140.3%.