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How public sector debt as a percentage of GDP has grown over the last 10 years

UK Public Sector debt and borrowing 1975 to 2013

Public sector net debt figures are available back to 1974/75. This includes the debt of central and local government, as well as public corporations. Historically, this debt has not been constant. Public sector net debt as a % of GDP fell from a debt level pre-1977/78 that was above 50%, to a low of 26% at the end of 1990/91. It then grew until it reached a peak of 42% of GDP at the end of 1996/97, before falling back to 30% of GDP by the end of 2001/02.

Since 2001/02 public sector net debt has been increasing. At the end of March 2002 net debt was 30% of GDP. Over the next six years, up until 2007/08, the average rate of increase was just over 1% of GDP a year. From 2008 public sector net debt increased sharply, rising from 45% of GDP at the end of March 2009 to 74% of GDP at the end of March 2013.

Public sector net debt as a percentage of GDP, 1975/76 to 2012/13

Excluding the temporary effects of financial interventions

Public sector net debt as a percentage of GDP, 1975/76 to 2012/13
Source: Office for National Statistics

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Changes in the amount that the public sector borrows (public sector net borrowing) are an important determinant of changes in the public sector net debt. Therefore, it is unsurprising to see a historical pattern to public sector net borrowing which complements that of public sector net debt.

Monthly public sector net borrowing figures are available back to 1993. Between 1998/99 and 2000/01, net borrowing cumulatively over the year was negative (the public sector had a surplus), at the same time public sector net debt was falling. However, before and after this period the net borrowing was positive (there was a deficit).

Between 2003/04 and 2007/08 net borrowing was fairly static, varying between £34 billion and £42 billion. With the onset of the financial crisis in late 2007 net borrowing rose sharply to a peak of £157 billion in 2009/10. It then fell a little to £139 billion in 2010/11, before falling further to £119 billion in 2011/12 and £82 billion in 2012/13 (or £116 billion excluding the Royal Mail Pension Plan transfer and the Bank of England Asset Purchase Facility transfers).

Public sector net borrowing, 1993/1994 to 2012/13

Excluding the temporary effects of financial interventions

Public sector net borrowing, 1993/1994 to 2012/13
Source: Office for National Statistics

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Public Sector Finance measures -  excluding and including Government financial interventions

Since 2007/08 the Government has made several direct interventions in the UK financial sector as a response to the global financial crisis. As a result of those government interventions some banks and other financial institutions which were previously designated within National Accounts as private companies have been reclassified as public financial corporations. The government interventions and the inclusion of banking groups, such as Royal Bank of Scotland and Lloyds, within the public sector have had a marked impact on the public sector finances. In recognition of this, the 2008 Budget introduced a measure of public sector debt excluding the temporary effects of financial interventions (referred to here as PSND ex). A parallel measure of public sector net borrowing (referred to as PSNB ex) was then introduced in the 2009 Pre-Budget Report.

For more detail on the methodological differences between the statistics that exclude and include the temporary effects of the financial interventions see the paper entitled Public sector finances excluding financial interventions.

Categories: Economy, Public Sector Finance
Content from the Office for National Statistics.
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