This release provides the first estimate of July 2014 public sector finances (financial year 2014/15) and updates the financial year 2013/14 data. Public sector finances data are available on a monthly basis but it is often more informative to look at year-to-date or complete financial year data to discern trends because of monthly volatility. These estimates will continue to be revised as more data becomes available.
This summary section provides the latest headline data and supporting information on the changes taking place for central government (which tends to be the largest component of net borrowing). If you are a new user the section 'Understanding this release' provides an explanation of these headline measures and how they relate to each other.
Table 1 compares the latest month with the same month last year and cumulative totals for the financial year-to-date compared with the same period in the last financial year (see Table PSF1 for time series).
|United Kingdom||£ billion1(not seasonally adjusted)|
|Current Budget ex APF 2,5||0.9||0.2||0.8||-31.2||-30.1||-1.1|
|Net Borrowing (PSNB ex)4||0.2||1.0||-0.8||32.4||23.0||9.4|
|Net Borrowing (PSNB ex) ex APF 4,5||0.8||1.6||-0.8||37.0||35.2||1.8|
|Net Debt (PSND ex)6||1,299.4||1,201.6||97.8||1,299.4||1,201.6||97.8|
|Net Debt as a % of annual GDP7||76.5||74.2||2.3||76.5||74.2||2.3|
The remainder of this section describes some of the important data changes related to net borrowing and net debt. The focus tends to be on central government because receipts (income) and expenditure for central government tend to be the largest components affecting net borrowing. An explanation of the Asset Purchase Facility (APF) is provided in the next section of this bulletin but the impact on borrowing of the transfers is discussed in this section. A longer term perspective of the public sector finances is provided in the later commentary sections.
Net borrowing in July 2014 was £0.2 billion, a reduction of £0.8 billion compared with July 2013. This reduction in net borrowing is a result of central government receipts increasing more than central government expenditure.
There was a £0.5 billion Asset Purchase Facility (APF) transfer in July this year and last year.
Central government receipts (APF removed) were higher in July 2014 than July 2013, by £1.8 billion (+3.3%). There were large increases in PAYE and VAT:
VAT receipts increased by £0.4 billion (or 3.9%) to £10.3 billion,
income tax related payments increased by £0.8 billion (or 5.1%) to £17.4 billion,
Stamp duties (on shares, land & property) increased by £0.1 billion (or 11.7%) to £1.3 billion,
while corporation tax decreased by £0.3 billion (or 4.8%) to £6.6 billion.
Central government expenditure was higher in July 2014 than July 2013 by £1.0 billion, predominantly a result of net social benefits (mainly pension payments) and other current expenditure (mainly departmental spending) while net investment (capital expenditure) was lower:
net social benefits increased by £0.4 billion (or 2.2%) to £16.9 billion mainly as a result of increases in state pension payments (within National Insurance Fund benefits),
other current expenditure increased by £0.4 billion (or 1.3%) to £32.1 billion,
Central government net investment was lower by £0.5 billion compared with last year mainly due to a grant paid in full by the Department for Communities and Local Government to local authorities in London last July being paid quarterly this year.
In July 2014 local government net borrowing/surplus was £0.0 billion, i.e. zero borrowing. Last July local government was in surplus by £0.3 billion. Public corporations’ in July 2014 was in surplus by £0.1 billion (no change from last July).
Net borrowing for financial year-to-date 2014/15 totalled £32.4 billion (£9.4 billion higher than the same period in 2013/14). Most of this increase is because of the extra £7.5 billion APF receipts which affected borrowing in 2013/14. When APF transfers are excluded, net borrowing for the financial year-to-date 2014/15 was £37.0 billion or £1.8 billion higher than the same period in 2013/14.
In the financial year-to-date 2014/15, central government received £4.6 billion from the APF (all of which affected borrowing). In 2013/14 it received £17.0 billion of which £12.2 billion affected net borrowing.
Central government receipts (excluding APF) for the financial year-to-date were £187.4 billion. This was £3.8 billion (2.1%) higher than the same period in 2013/14. The main changes were:
VAT receipts increased by £2.0 billion (or 5.2%) to £40.4 billion,
income tax related payments decreased by £0.5 billion (or 1.1%) to £49.4 billion,
Stamp duties (on shares, land & property) increased by £1.0 billion (or 26.5%) to £4.8 billion. All of this increase came from land and property,
while corporation tax increased by £0.6 billion (or 4.3%) to £14.7 billion.
In the early part of 2013/14 it is likely that income tax payments were affected by some firms delaying employee bonuses (from the end of 2012/13 until 2013/14) to take advantage of tax rate changes.
Central government expenditure was £221.7 billion for the financial year-to-date. This was £2.7 billion (1.2%) higher than the same period in 2013/14. The increase was mostly from net social benefits (mainly pension payments) and other current expenditure (mainly departmental spending) while net investment (capital expenditure) was also higher:
net social benefits increased by £1.2 billion (or 1.8%) to £65.7 billion mainly as a result of increases in payments of State Pension payments (within National Insurance Fund benefits),
other current expenditure increased by £1.7 billion (or 1.2%) to £138.4 billion mainly as a result of current expenditure on goods and services,
Central government net investment increased by £0.9 billion to £9.0 billion mainly as a result of Gross Capital formation and capital transfers to the private sector.
The local government surplus reduced by £1.4 billion to £8.9 billion for the financial year-to-date. This mainly reflects the timing of grant payments from central government , which are lower in the year to July. Public corporations surplus was £0.4 billion ( a reduction of £0.4 billion), again this is influenced by the timing of grant payments from central government.
Public sector net debt excluding financial interventions (PSND ex) was £97.8 billion higher in July 2014 compared with last year (the end of July 2013). The increase was a result of:
£103.0 billion of public sector net borrowing,
less £14.1 billion in APF transfers that did not impact on net borrowing,
plus £2.9 billion in timing differences between cash flows for gilt interest payments and the accrued gilt interest flows,
plus £6.0 billion in net cash transactions related to acquisition or disposal of financial assets of equivalent value (e.g. loans) and timing of recording.
This statistical bulletin provides important information on the UK government financial position. It enables government, the public, economists, financial analysts and political parties to monitor public sector expenditure, receipts, investments, borrowing and debt. By comparing these data with forecasts from The Office for Budget Responsibility (OBR) the current UK fiscal position can be evaluated.
The following guidance documents aim to help users gain a detailed understanding of the public sector finances:
Monthly statistics on Public Sector Finances: a methodological guide (360.3 Kb Pdf)
Developments to Public Sector Finances Statistics (255.2 Kb Pdf)
and Quality and Methodology Information . However, the following table and diagram should provide users with the key terms needed to understand the data and how the statistics relate to each other.
|Current expenditure||– spending on government activities including: social benefits, interest payments, and other government department spending (excluding spending on capital assets)|
|Current receipts||– income mainly from taxes (e.g. VAT, income and corporation taxes) but also includes interest, dividend and rent income|
|Current budget||– the gap between current expenditure and current receipts (having taken account of depreciation)|
|Net investment||– spending on capital assets, e.g. infra-structure projects, property and I.T equipment, both as grants and by public sector bodies themselves minus capital receipts (sale of a capital assets)|
|Net borrowing||– measures the gap between revenue raised (current receipts) and total spending (current expenditure plus net investment). A positive value indicates borrowing while a negative value indicates a surplus|
|Net cash requirement||– is a measure of how much cash the government needs to borrow (or lend) to balance its accounts (see cash recording|
|Net debt||– is a measure of how much the government owes at a point in time.|
|Accruals/accrued recording||–financial recording based on when ownership transfers or the service is provided (often different to when cash is paid)|
|Cash recording||– financial recording based on when cash is paid or received. Net cash requirement is recorded on a cash basis and net debt is close to being a cash measure.|
|Asset Purchase Facility Fund (APF)||– an arm of The Bank of England able to purchase financial assets including government securities (gilts). The APF has earnt interest which is periodically transferred back to central government.|
Diagram 1 illustrates how debt between periods changes as a result of transaction flows (e.g. expenditure and receipts) on an accrued and cash basis. The transaction flows are provided for the year-to-date 2014/15. The headline measures of net borrowing, net cash requirement and net debt are highlighted in the diagram as they provide the key indicators for the performance of the UK public finances. Where possible reference has been made to the tables attached to the end of this bulletin where time series for the corresponding component are available.
When public sector current expenditure is greater than current receipts (income), the public sector runs a current budget deficit. The sum of net investment (spending on capital minus capital receipts) and the current budget balance constitute net borrowing. The diagram shows how net borrowing relates to the change in net debt.
The net cash requirement is closely related to net debt (the amount owed), which is mainly a cash measure. It is important because it represents the cash needed to be raised from the financial markets. Changes in net debt between two points in time are normally similar to the net cash requirement for the intervening period. The relationship is not an exact one because the net cash requirement reflects actual prices paid while the net debt is at nominal prices. For instance, gilts are recorded in net debt at their redemption value (or face value), but they are often issued at a different price due to a premia or discount being applied. The net cash requirement will reflect the actual issuance and redemption prices but net debt only ever records the face (or nominal value).
The public sector finances can be complex. In order to make sure these important statistics are accessible to all we need users to provide us with feedback on how best to explain concepts and trends in the data. Please contact us at: email@example.com
Commentary in the rest of this bulletin is structured as follows:
Net borrowing and debt data compared with OBR forecast
This section compares the latest available data with Office for Budget Responsibility forecasts for borrowing and debt.
Public sector and sub-sector net borrowing
This section shows how the public sector net borrowing position is made up of central government, local government and public corporations net borrowing.
Public sector net cash requirement
This section provides the net cash requirement for the public sector (a measure of borrowing on a cash basis).
Public sector net debt
This section shows the amount the public sector owes (the accumulation of its borrowing).
Central government account
This section provides information about the central government account focusing on factors including the timing of receipts, expenditure and net investment.
Recent events and methodological changes
This section provides information on events which have had an impact on the public sector finances in the last 12 to 18 months.
Revisions since previous bulletin
This section provides information on the revisions between this publication and last month’s publication.
New for this bulletin
This section provides information on new tables (including data published in spreadsheet reference tables) and changes included in the current publication or those that will be appearing in future publications.
The Office for Budget Responsibility (OBR) produces forecasts of the public finances twice a year (normally in March and December). OBR Forecasts for 2014/15 are presented in this section alongside the latest actual data. In the section ‘Understanding this release’ some of the key terms are explained alongside a diagram which shows the components which make up net borrowing.
Caution should be taken when comparing public finances data with OBR forecasts for the full financial year, as data are not finalised until after the financial year end, so initial estimates soon after the end of the financial year can be subject to sizeable revisions in later months. In year timing effects on spending and receipts can also affect year-to-date estimates and mean that caution should also be taken comparing year to date data against the full-year forecast. However, it is still informative to compare the emerging data against the OBR forecast and this can be done through Figures 1a and 1b along with Table 2.
Figure 1a shows the public sector net borrowing excluding financial interventions (PSNB ex) was £32.4 billion for the financial year-to-date (April to July) 2014/15. While the full year OBR forecast for 2014/15 was £83.9 billion as of March 2014.
The PSNBex year-to-date for 2013/14 is lower than 2014/15. Factors contributing to this are:
In the financial year-to-date 2013/14, £17.0 billion was transferred from the Bank of England Asset Purchase Facility Fund (APF) of which £12.2 billion reduced net borrowing,
In the financial year-to-date 2014/15 £4.6 billion was transferred from the APF, all of which reduced net borrowing for PSNBex,
there was a one-off tax receipt from Swiss banks in May 2013 of £0.9 billion.
Figure 1b shows PSNB ex was £37.0 billion for the year-to-date 2014/15 with the effects of the transfers from the APF removed. While the OBR forecast for this measure for the year end position was £95.6 billion (as of March 2014).
Without the APF transfers it can be seen that borrowing in 2014/15 is following a similar path to last year, but is £1.8 billion higher a third of the way through the financial year.
Table 2 shows the percentage change between the existing data for the year-to-date 2014/15 and the same period in 2013/14. It also presents the percentage change between the full year for 2013/14 and the OBR forecast for 2014/15 (published in March 2014).
|United Kingdom||£ billion1 (not seasonally adjusted)|
|2014/15||2013/14||Increase/ Decrease %||2014/15 OBR Forecast7||2013/14 Outturn||Forecast Increase/Decrease %|
|Current Budget (PSCB)2||-26.5||-17.9||-48.1||-56.0||-68.9||18.8|
|PSCB excluding Asset Purchase Facility (APF) Transfers||-31.2||-30.1||-3.5||-67.7||-81.1||16.5|
|Net Investment (PSNI)3||5.9||5.1||14.4||27.9||24.7||12.9|
|Net Borrowing (PSNB ex)4||32.4||23.0||40.6||83.9||93.7||-10.4|
|PSNB ex excluding APF||37.0||35.2||5.1||95.6||105.8||-9.7|
|Net Debt (PSND ex)||1,299.4||1,201.6||8.1||1,355.0||1,273.4||6.4|
|Net Debt as a % of annual GDP 5,6||76.5||74.2||3.1||77.3||76.3||1.3|
The OBR forecast predicts that net borrowing for the full financial year 2014/15 will be lower than in 2013/14 (for both PSNB ex & PSNB ex,ex APF). So far in 2014/15 (year to date) net borrowing is higher (for both borrowing measures).
On the same day as this bulletin is released the OBR publishes a commentary on the latest figures and how these reflect on its forecasts. There are many reasons why the data in this publication may differ from OBR forecasts. For instance, the OBR includes in its forecasts its estimates of certain pending ONS classification decisions which have yet to be made. The OBR provides information to help users identify where differences may be expected.
Figure 2 shows public sector net borrowing excluding financial interventions (PSNBex) for the last twenty financial years. Between 1998/99 and 2000/01 the public sector was a net lender. In 2000/01 the sale of 3G mobile licences increased the net lending position by £22.5 bn. Since then the public sector has returned to net borrowing. PSNB ex peaked in 2009/10 as the effects of the economic downturn impacted on the public finances (reduced receipts through taxes while expenditure continued to increase). It has reduced since then. However, in 2013/14 net borrowing remained higher than before 2007/08 and the financial shock.
PSNB ex comparisons between 2012/13 and 2013/14 are affected by the Royal Mail Pension Plan (RMPP) and Bank of England Asset Purchase Facility (APF) transfer. When the impact of RMPP and the APF are removed (see Figure 2), net borrowing fell between 2012/13 and 2013/14. This comprised of a decrease in the current budget deficit as receipts increased more than expenditure and net investment.
In the UK the public sector consists of four sub-sectors: central government, local government, non-financial public corporations and financial public corporations (i.e. public sector banking groups).
|United Kingdom||£ billion1 (not seasonally adjusted)|
|Non-Financial Public Corporations2||-0.1||-0.1||0.0||-0.4||-0.8||0.4|
|PS Net Borrowing (PSNB ex)||0.2||1.0||-0.8||32.4||23.0||9.4|
|PS Net Borrowing (PSNB ex) ex APF||0.8||1.6||-0.8||37.0||35.2||1.8|
Table 3 shows the largest share of the public sector net borrowing relates to central government transactions. It also shows that local government and public corporations are net lenders. This is influenced by the timing of grants from central government.
PSNCR ex follows a similar trend to that of public sector net borrowing; peaking in 2009/10 and reducing in each of the following years. The public sector net cash requirement (PSNCR) varies from month to month because of the timing of cash transactions. In July 2014 PSNCR excluding financial interventions (PSNCR ex) was -£4.8 billion indicating a cash surplus. This cash surplus was £4.6 billion smaller than July 2013. PSNCR ex is included in PSF4.
The central government net cash requirement is a focus for some users as it provides an indication of how many gilts (government bonds) the Debt Management Office may issue to meet the government’s borrowing requirements.
In July 2014, central government net cash requirement (CGNCR) was -£2.9 billion (a cash surplus). This cash surplus was £6.1 billion smaller than in July 2013 (£9.0 billion).
The financial year-to-date 2014/15 CGNCR is £4.6 billion lower than in the same period 2013/14 due to transfers from the Bank of England Asset purchase Facility (APF) Fund (£4.1 billion in April 2014 and £0.5 billion in July 2014).
In the financial year 2013/14 the following reduced the CGNCR:
the transfers between the APF and government,
the sale of shares in Lloyds and Royal Mail.
In the financial year 2012/13 the following events reduced CGNCR:
the Royal Mail Pension Plan transfer and subsequent sale of assets,
the transfer of the Special Liquidity Scheme final profits,
the 4G Spectrum sale, and
the transfers between the APF and government.
Although the central government net cash requirement is the largest part of the public sector net cash requirement excluding financial interventions (PSNCRex), the total public sector net cash requirement (PSNCR) can be very different. The reason is that the PSNCR includes the net cash requirement of the public sector banking groups. In recent years, the public sector banking groups have recorded large cash surpluses which have had a substantial impact on the public sector net cash requirement.
Figure 3 shows public sector net debt excluding financial interventions (PSND ex). This is the main measure for showing the amount the public sector owes to UK private sector organisations and overseas institutions.
The increases between 2008/09 and 2010/11 were larger than the early part of the decade as the economic environment meant public sector net borrowing excluding financial interventions (PSNB ex) increased. Since then it has continued to increase but at a slower rate.
At the end of 2013/14 PSND ex was £1,273.4 billion, an increase of £88.0 billion on the previous year.
Net debt, for the purposes of UK fiscal policy, is defined as total gross financial liabilities less liquid financial assets, where liquid assets are cash and short-term assets which can be realised for cash at short notice and without significant loss. These liquid assets mainly comprise foreign exchange reserves and bank deposits. The net debt is a cash measure which is priced at nominal value (i.e. the cost to the issuer at redemption) and consolidated (i.e. intra-sector holdings of liabilities/assets are removed).
Figure 4 (financial years) shows that the current budget deficit has reduced since 2009/10, but is still larger than before the financial shock.
In July 2014, the central government current budget (CGCB) was in surplus (expenditure was smaller than receipts) by £1.5 billion. In recent years the current budget has been in deficit in most months. January and July tend to be surplus months as these are the two months with the highest receipts.
a) Current receipts
As cash receipts are generally accrued back to earlier periods when the economic activity took place, the first monthly estimate for receipts is by nature provisional, and must include a substantial amount of forecast data.
Central government receipts follow a strong cyclical pattern over the year, with high receipts in April, July, October and January due to quarterly corporation tax returns being accrued to these months. January accrued receipts are particularly high due to receipts from quarterly corporation tax combining with those from income tax self assessment. The revenue raised through income tax self assessment, as well as affecting January receipts, also tends to lead to high receipts in February and, to a lesser degree, March.
PAYE tends to vary little throughout the financial year on a monthly basis (excluding bonus months).
Dividends from the APF increased current receipts by £12.2 billion in the financial year 2013/14. In the financial year 2012/13 the current receipts were also increased by dividend payments, in this case £2.3 billion of dividends from the Special Liquidity Scheme (SLS) and a £6.4 billion APF transfer.
b) Current expenditure
Trends in central government current expenditure can be affected by monthly changes in debt interest payments which can be volatile as they depend on the monthly path of the Retail Prices Index. It can therefore be informative to consider the total central government current expenditure excluding debt interest payments.
The profile of accrued central government current expenditure excluding debt interest is generally less volatile through the year. However, one regular peak is in net social benefits, which are higher in November than in other months because this is when the winter fuel allowance is paid.
Growth in net social benefits is affected by inflation. Benefits were uprated by 5.2% in 2012/13 in line with the Consumer Prices Index (CPI). This contrasts with an equivalent figure of 2.2% in 2013/14 and 2.7% in 2014/15. Additionally since 2013/14 the uprating only applies to benefits received by disabled people and pensioners - benefits for people of working age have only been increased by 1% in these two years.
It is difficult to compare the profile of monthly central government expenditure excluding debt interest and net social benefits between 2013/14 (and later years) and 2012/13 (and earlier years). This is because of a number of changes to central government funding for local authorities (in particular the timing of grants).
In 2011/12 and earlier years the funds were distributed in multiple, similar sized, payments throughout the year. In 2012/13 local authorities received almost all their funding from the Department for Communities and Local Government (DCLG) through redistributed business rates, rather than the Revenue Support Grant. In addition in 2012/13, as in previous years, the bulk of the Revenue Support Grant was paid in April with a smaller balance paid in February.
From the start of 2013/14 local authorities retained half of the business rates they collect, with the remainder redistributed through the Revenue Support Grant. The retained business rates are still classified as a central government tax (see background note on business rates). Furthermore, the Revenue Support Grant in 2013/14 includes a number of grants that were paid by other departments in 2012/13, including one to fund council tax benefit localisation. This means that central government current expenditure year-on-year growth for April and February is high while year- on- year growth in other months is generally lower.
A further cyclical trend is that current expenditure excluding debt interest payments, net social benefits and current grants to local government as discussed above tend to be higher towards the end of the financial year in March.
c) Net investment
Central government net investment is difficult to predict in terms of its monthly profile as it includes some large capital grants (such as those to local authorities and education institutions), and can include some large capital acquisitions or disposals, all of which vary from year to year. Net investment in the last quarter of the financial year is usually markedly higher than that in the previous three quarters.
Central government net investment includes the direct acquisition minus disposal of capital assets (such as buildings, vehicles, computing infrastructure) by central government. It also includes capital grants to and from the private sector and other parts of the public sector. Capital grants are varied in nature and cover payments made to assist in the acquisition of a capital asset, payments made as a result of the disposal of a capital asset, transfers in ownership of a capital asset and the unreciprocated cancellation of a liability.
In June 2014 the UK government sold £200 million Sovereign Sukuk, maturing in July 2019. Their classification and treatment in the public sector finances is currently being considered.
The Chancellor announced on 9 November 2012 that it had been agreed with the Bank of England to transfer the excess cash in the Asset Purchase Facility Fund to the Exchequer.
In July 2014 £0.5 billion was transferred from the Bank of England Asset Purchase Facility Fund to HM Treasury. The Bank of England entrepreneurial income for 2013/14 was calculated as £12.8 billion. This is the total amount of dividend transfers that can impact on net borrowing in 2014/15.
The PSF review consultation concluded that transfers between the Asset Purchase Facility Fund and government would be within the PNSB ex measure boundary. This means the APF transfers to central government will not impact on PSNB ex following implementation of the PSF review in September 2014.
In 2012/13, there were £11.3 billion of transfers from the Asset Purchase Facility to HM Treasury. Of these, £6.4 billion affected PSNB ex.
In 2013/14, there were £31.1 billion of transfers from the Asset Purchase Facility to HM Treasury. Of these, £12.2 billion affected PSNB ex.
All cash transferred from the Asset Purchase Facility to HM Treasury is fully reflected in central government net cash requirement and net debt. For more detail of transactions relating to the Asset Purchase Facility, see the new APF table (PSF13).
For further information see Recent Classification Decisions and Economic Events Affecting Public Sector Finances Statistics. (23 Kb Pdf)
On 17 September 2013 the UK Government began selling part of its shareholding in Lloyds Banking Group. The sale of the shares does not impact on the public sector net borrowing because it is a financial transaction.
The first sale (17 September 2013) of a 6% stake (at 75p a share) raised £3.2 billion cash. The second sale (25/26 March 2014) of a 7.5% stake raised £4.2 billion in cash. These amounts were recorded as reductions in the central government net cash requirement for the relevant months.
The public sector excluding financial interventions measures take account of the necessary transactions related to the Lloyds share sales. The planned implementation of changes to the public sector ‘including financial interventions’ estimates for August 2014 have been delayed while we identify and quality assure the necessary data processes. The classification decision of Lloyds following the share sales was published on 30 April 2014.
As happened last year, the bulk of the 2014/15 Revenue Support Grant has been paid by central government to local government in April with the remaining balance due to be paid in February and March. This makes monthly current expenditure more comparable between 2014/15 and 2013/14 than between 2013/14 and 2012/13 (when equivalent grants had a much flatter profile).
Nevertheless the payment has affected current expenditure growth rates in 2014/15 because £7.6 billion was paid out in April 2014, compared with £9.1 billion in April 2013. The impact on central government other current expenditure is largely offset in local government net borrowing and is the main factor behind the smaller local government surplus on net borrowing in the year-to-date.
Although this bulletin contains public sector borrowing estimates for the 2013/14 financial year, these estimates will be revised in later months as improved data are received or provisional data sources are replaced with more final data sources.
Also, government departments have not fully finalised their expenditure data for the financial year just ended. To minimise future revisions, a proportion of the difference between the OBR's Economic and Fiscal Outlook estimate of total departmental underspend and the underspend in the April data on OSCAR has been used to estimate likely further underspend from departments. Departments will be finalising their data to put their audited resource accounts before Parliament over the summer. Revisions from this process will be reflected in the September bulletin.
In publishing monthly estimates, it is necessary that a range of different types of data sources are used. A summary of the different sources used and the implications this has for data revisions is provided in the document Sources summary and their timing (22.8 Kb Pdf) . More detail of the methodology and sources employed can be found in the Public Sector Finances Methodological Guide (360.3 Kb Pdf) .
Table 4 summarises revisions between the data contained in this bulletin and the previous publication. The causes of revisions impacting on all measures of net borrowing are outlined below.
Revisions to public sector net borrowing (excluding the temporary effects of financial interventions) (PSNB ex) are largely confined to the financial year-to-date 2014/15 (April to June 2014). In the period April to June 2014 PSNB ex was revised up by £0.2 billion.
Revisions to central government net borrowing (CGNB) are largely confined to the year-to-date 2014/15 (April to June 2014).
Current receipts remained largely un-changed with the upward revisions to VAT (£0.4 billion) largely offset by revisions to both Taxes on income and wealth and National insurance contributions. A £0.3 billion upward revision to departmental spending and subsequent £0.3 billion downward revision to current budget was again largely offset by a £0.4 billion downward revision to net investment both caused by the receipt of new data from departments replacing forecast information. This, combined with an unrevised estimate of depreciation resulted in a downward revision of £0.1 to CGNB in the year-to-date 2014/15.
Revisions to Local Government net borrowing (LGNB) are confined to the year-to-date 2014/15 (April to May 2014) and are due to transfers within the public sector.
Revisions to public corporation net borrowing (PCNB) are confined to the year-to-date 2014/15 (April to May 2014) and are due to transfers within the public sector
|United Kingdom||£ billion1 (not seasonally adjusted)|
|Net Borrowing||Net Debt|
|Period||CG||LG||Non-financial PCs||PSNB ex||PS Banks||PSNB||PSND ex||PSND ex as % of GDP2||PSNCR|
The 2013/14 PSF review concluded that further information on events affecting the public sector finances should be published alongside the statistical bulletin. This has been published as a reference table called 'Large impacts on Public Sector Fiscal Measures'.
The table introduced last month showing transactions related to the Asset Purchase Facility Fund continues to be published as part of the tables alongside the bulletin. It shows interest receivable/payable, cash transfers and the loan liabilities of the APF (see Table PSF13).
ONS will hold a user event on 23 September 2014. The event will explain the changes in the public sector finances data as a result of moving to the new European National Accounts framework (ESA 2010) and implementing the Public Sector Finances Review.
Venue: Etc. Venues, 1 Drummond Gate, Pimlico, SW1V 2QQ
Date: 23 September 2014
To book a place at this event please contact firstname.lastname@example.org
ONS has announced changes to the Public Sector Finance Statistics from:
the move from European System of Accounts 1995 to European System of Accounts 2010,
the 2013 Review of Public Sector Finance Statistics consultation.
The Public Sector Finances comply with international standards set out in the European System of Accounts (ESA). These standards ensure that economic statistics produced by all EU member states are compiled in a consistent, comparable, and reliable way. The new European System of Accounts (ESA10) standards will be adopted by all EU countries in September 2014. More detail can be found in the Transition to ESA10 article (138 Kb Pdf) published in February 2014.
The Review of Public Sector Finance Statistics proposed improvements to the presentation of the statistics and changes to the fiscal measures of net borrowing and net debt (the so called ‘ex-measures’). The key changes to these measures of debt and deficit are:
new ‘ex-measures’ that only exclude the debt and borrowing of the public sector banks,
introducing consistent treatment of shares within the Public Sector Finance statistics. In particular, the Government’s shares in Royal Bank of Scotland and Lloyds Banking Group would no longer be treated as liquid assets.
Both the PSF review and ESA10 will lead to changes in public sector finance estimates in September 2014. These changes are being implemented at the same time to avoid unhelpful multiple revisions.
To help users manage this change, this publication includes Table 5 which shows the estimated impact of the ESA 2010 changes and the PSF Review on key measures in the public sector finances. Time series data from 1997 onwards, on a quarterly and monthly basis, are available in the reference tables published with this bulletin.
More detail on the ESA 2010 and PSF Review impacts has been published, Developments to Public Sector Finance Statistics – June 2014 update.
|Excluding the banking groups||Including the banking groups|
|Current Budget Deficit||Net Investment||Net Borrowing||Net Debt||Current Budget Deficit4||Net Investment||Net Borrowing||Net Debt|
The PSF review proposed a new structure and presentational style for this bulletin. The responses to the consultation supported the direction of these changes and in the coming months these will be implemented in stages.
Feedback on the content of the bulletin continues to be welcome and should be sent to email@example.com
This publication is in advance of the GDP Quarterly National Accounts (QNA) publication in September 2014. This means that the ESA 2010 version of GDP is not available to calculate debt and other key aggregates as a percentage of GDP. The publication will include GDP ratios for the period 1997/98 to 2011/12 data. A further update to include 2012/13, 2013/14 and 2014/15 will be published on the 30 September when QNA are published.
While the accounting practices will be revised from an ESA 95 to an ESA 2010 basis in September 2014, the series identifiers (often referred to as CDIDs) will remain unchanged.
PSF1 Public Sector Summary Balances
PSF2 Public Sector Net Borrowing: by sector
PSF3A Central Government Account: 2012/13
PSF3B Central Government Account: Overview
PSF3C Central Government Account: Total Revenue, Total Expenditure and Net Borrowing
PSF3D Central Government Account: Current Receipts*
PSF3E Central Government Account: Current Expenditure*
PSF3F Central Government Account: Net Investment*
PSF3G Local Government Account: Overview*
PSF3H Local Government Account: Total Revenue, Total Expenditure and Net Borrowing*
PSF3I Local Government Account: Current Receipts*
PSF3J Local Government Account: Current Expenditure*
PSF3K Local Government Account: Net Investment*
PSF4 Public Sector Net Cash Requirement
PSF5 Central Government Net Cash Requirement on own account (receipts and outlays on a cash basis)
PSF6A Public Sector Consolidated Gross Debt (nominal values at end of period)
PSF6B Public Sector Net Debt (nominal values at end of period)
PSF7 Public Sector Finances: Current Budget, Net Borrowing and Net Cash Requirement
PSF10A Reconciliation of Public Sector Net Borrowing and Net Cash Requirement
PSF10B Reconciliation of Central Government Net Borrowing and Net Cash Requirement
PSF11A Reconciliation of PSNB and PSNB ex
PSF11B Reconciliation of PSND and PSND ex
PSF12R Public Sector Statistics: revisions since last publication
PSF13 Bank of England Asset Purchase Facility Fund
* These tables are published in Excel format only.
A summary quality report (109.6 Kb Pdf) for the public sector finances is available on the ONS website. This report describes in detail the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them.
An overview note on the data sources used within public sector finances and the quality assurance processes that are undertaken in compiling the statistical release was published on the ONS website on 19 October 2012.
A methodology guide (360.3 Kb Pdf) to monthly public sector finance statistics is available on the ONS website. It explains the concepts and measurement of the monthly data, plus those previously published, and gives some long runs of historical data. The following background notes provide further information regarding the monthly data.
Range of measures published
In this bulletin we publish the headline measures of borrowing and debt (PSNB ex and PSND ex) in tables as well as the wider measures of borrowing and deficit, which include temporary impacts of financial interventions.
The Public Sector Finances (PSF) have a more flexible revisions policy than other National Accounts data. Therefore, PSF data may be inconsistent with the published GDP and Sector and Financial accounts datasets because a revision may not be incorporated into the main National Accounts dataset until a later date. In Blue Book 2013, a process of alignment took place between National Accounts and Public Sector Finances. This significantly reduced the historic differences between National Accounts and Public Sector Finances. As a result of this work the figures in this monthly publication are largely consistent with the National Accounts figures, for more details of the alignment work and the existing differences between Public Sector Finances and National Accounts see the ONS article on the subject.
General government net borrowing reported in this bulletin forms the basis of the reports of Government Deficit under the Maastricht Treaty. The next bulletin will be published in October 2014.
The definition of general government net borrowing to be reported for the European Excessive Deficit Procedure (EDP) is slightly different to that used for National Accounts.
The bulletin on General Government Debt and Deficit under the Maastricht Treaty includes a table which reconciles the EDP defined general government net borrowing and that published here in the Public Sector Finances Statistical Bulletin.
Tax receipts data published in this bulletin are presented in terms of broad tax categories (eg. Income Tax, VAT). For more details on individual taxes, users can go to the HM Revenue & Customs website and access a monthly publication which provides cash tax receipts data which are entirely consistent with the data published in Table PSF5A and B of the bulletin.
OSCAR - Online System for Central Accounting and Reporting
In June 2010, HM Treasury published as part of the Government transparency agenda, raw data from the COINS database (the predecessor to OSCAR) for the years 2005/06 to 2009/10. From September 2012 onwards the data releases have been made from OSCAR the new accounting system.
Central government departmental expenditure data are subject to various validation processes and improve over time. They go through four main stages:
Stage 1: Initially, they are estimated using in-year reported data,
Stage 2: In the July following the completion of the financial year, departments update their full financial year estimates (but with no in-year profile), for publication in the Treasury’s Public Spending National Statistics annual publication. These estimates will be in line with the audited resource accounts for most departments,
Stage 3: For the autumn update of the Treasury’s Public Spending National Statistics these financial year estimates are updated,
Stage 4: In February the following year the winter update of the Treasury’s Public Spending National Statistics is published and the financial year estimates are further improved. All departments’ and devolved administrations’ accounts will have been audited and finalised by this stage. These revisions are not normally included in the Public Sector Finances statistical bulletin until the September release.
Data for 2012/13 are currently at Stage 2 and data for 2013/14 are currently at Stage 1. Data for all earlier years are at Stage 4.
The local government data for 2011/12 and 2012/13 are based on final outturns for receipts and expenditure. Data for 2013/14 are based on either provisional estimates or forecasts and are subject to revisions when final outturn data become available.
The public sector revisions’ policy (14.5 Kb Pdf) is available on the ONS website.
Currently data for the public sector banking groups are only available for periods up to June 2013. Values for months from July 2013 onwards are ONS estimates. Consequently these, and the aggregates which include the impacts of financial interventions, may be revised substantially when actual data become available.
Historically, local government and public corporation net borrowing in the bulletin were derived in two different ways depending on the month to which the net borrowing related.
Since January 2012 for local government and October 2012 for public corporations the methodology used to calculate quarterly net borrowing estimates has been modified to always use accrued current expenditure, revenue and net investment data. The cash deposits and loans data are only used to profile the monthly net borrowing within the quarterly estimates. It is expected that over time this approach will lead to less revisions to local government and public corporations net borrowing.
National Non-Domestic Rates (business rates)
In the financial year 2013/14 there was a change in the way national non-domestic rates were collected and re-distributed to local government. However, because the transactions take place between central and local government the impact on the overall public sector finances was, and will continue to be neutral.
The profile of the payments from central government to local government was previously relatively stable across the financial year. Under the new method some of the money is now transferred at the beginning and end of the financial year.
A further recent development which is expected to reduce the size of local government data revisions and improve the reliability of in-year local government data is the introduction of the Quarterly Revenue Outturn data collection by the Department for Communities and Local Government. These data, first collected during 2011/12, provide quarterly updates for the main aspects of local government accrued current expenditure. The Public Sector Finances bulletin has used these data in its estimates of in-year local government net borrowing since January 2012.
One indication of the reliability of the key indicators in this bulletin can be obtained by monitoring the size of revisions. Previously, analyses of revisions to the wider measures of public sector current budget, net borrowing, and net debt that include the impacts of financial interventions were presented in this bulletin. The sizeable revisions resulting from the replacement of imputed data by hard data for the public sector banking groups has meant that these revisions have become more prone to be statistically significant when tested. Given that the primary focus of users is on the ex-measures, it would be preferable to analyse and present revisions of these in the bulletin. As yet sufficiently long monthly time series are not available for the ex-measures to enable standard revisions analysis to be conducted on them.
|Revisions between first publication and estimate twelve months later|
|Latest monthly value||Average over the last five years||Average over the last five years (average absolute revision)|
|General Government Net borrowing, £m (-NNBK)||338||-974||1,751|
As general government net borrowing is quite close in terms of coverage to PSNB ex, it is the subject of revisions analysis. The table shows summary information on the size and direction of revisions from first publication to one year later. The average of five years worth of such revisions is shown; for example – from those first published in June 2006 (for May 2006 to May 2011) first estimates. Please note that these indicators only report summary measures for revisions, the revised data may still be subject to measurement error.
A statistical test is applied to the average revision to determine whether it is statistically significantly different from zero. An asterisk (*) is used to indicate if a mean revision has been found to be statistically significant. A spreadsheet giving these estimates and the calculations behind the averages in the tables is available on the ONS website in the data section for this statistical bulletin.
A brief paper explaining the roles and responsibilities of ONS and HM Treasury when producing and publishing the public sector finances statistical release is on the ONS website.
Details of the policy governing the release of new data are available from the Media Relations Office. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: firstname.lastname@example.org
These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.
As part of our continuous engagement strategy, comments are welcomed on ways in which the Public Sector Finances Statistical Bulletin might be improved. Please email: email@example.com.
Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: firstname.lastname@example.org
These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.
|Gareth Clancy||+44 (0)1633 455889||Public Sector Financesemail@example.com|