ONS has reclassified Northern Rock Asset Management (NRAM) and Bradford and Bingley plc (B&B) as Central Government bodies, with effect from January 2010 and July 2010 respectively.
Both of these bodies, which were taken into public ownership in 2008/9, were previously treated by ONS as Public Financial Corporations, rather than as part of Central Government.
The reclassification occurred following the publication of revised international guidance in March 2012, which requires publicly owned companies like NRAM and B&B, which are closed to new business, restricted in their activities and which are planned to wind down over time, to be classified within the Central Government sector. A number of similar institutions in other European Countries have also been classified in the same way.
The change has increased UK General Government gross debt. This is the headline debt measure reported in the Government Deficit and Debt under the Maastricht Treaty publication. Initial estimates of the General Government gross debt, including NRAM and B&B, have been included in today’s ‘Government Deficit and Debt under the Maastricht Treaty’ release.
Because these institutions are being included in Central Government, the headline measure for the UK public sector debt and deficit, Public Sector Net Debt and Public Sector Net Borrowing excluding the temporary effects of financial interventions, as reported in the monthly Public Sector Finances statistical bulletin, will require revision.
The decision to reclassify them into the Central Government sector will not have a significant impact on the level of Public Sector Net Debt and Public Sector Net Borrowing, as both financial institutions were already included in the public sector, classified as Public Financial Corporations.
At the lower level, there will be changes to the debt and borrowing of Public Financial Corporations and Central Government.
NRAM and B&B will be fully incorporated into the debt and borrowing of the Central Government sector and the results published in Public Sector Finances, Government Deficit and Debt and National Accounts releases from early 2013.
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