Skip to content

Statistical bulletin: Government Deficit and Debt under the Maastricht Treaty, Calendar Year 2011 This product is designated as National Statistics

Released: 30 March 2012 Download PDF

General government net borrowing and consolidated debt

  • General government net borrowing in 2011 was £124.6 billion; equivalent to 8.3 per cent of gross domestic product (GDP).
  • At end December 2011 general government gross consolidated debt at nominal value was £1,250.3 billion; 82.9 per cent of GDP.

Background

Article 126 of the Treaty on the Functioning of the European Union obliges member states to avoid excessive budgetary deficits. The Protocol on the Excessive Deficit Procedure, annexed to the Maastricht Treaty, defines two criteria and reference values for compliance. These are a deficit to Gross Domestic Product (GDP) ratio of three per cent, and a debt to GDP ratio of 60 per cent.

EU Member Governments have to report their actual and planned government deficits, and the levels of their debt, promptly to the European Commission, to specific deadlines twice each year.

The estimates in this statistical bulletin have been supplied to the European Commission by ONS in accordance with the schedules in the Excessive Deficit Procedure. Forecasts for future years are provided separately by HM Treasury.

Main statistics

Table 1: Government Deficit and Debt

Calendar Years 2007 2008 2009 2010 2011
General government deficit £bn 38 72 159.2 148.5 124.6
as a percentage of GDP 2.7 5.0 11.4 10.1 8.3
General government debt at nominal values £bn 624.7 753.6 950.8 1,108.4 1,250.3
as a percentage of GDP 44.4 52.6 68.2 75.7 82.9

Download table

Figure 1: General government net borrowing as a percentage of GDP

General government net borrowing as a percentage of gross domestic product between 2007 and 2011
Source: Office for National Statistics

Download chart

 

Figure 2: General government gross debt as a percentage of GDP

General government gross debt as a percentage of gross domestic product between 2007 and 2011
Source: Office for National Statistics

Download chart

General government net borrowing

The tables in this bulletin present the UK Government debt and deficit position at the end of both the financial and calendar years. The United Kingdom, uniquely within the European Union, is assessed against the deficit and debt on a financial year basis. This is as, in general, the financial and calendar years are aligned in other European countries.

The reference value for ‘excessive deficit’ is three per cent. In 2010/11, the deficit stood at £139.8 billion (9.5 per cent of GDP). Since 2008/09 net borrowing has been substantially above the three per cent reference value, reflecting in large part the economic downturn following the financial crisis. Net borrowing has begun to fall off following a peak in 2009/10. See table M1.

Historically, net borrowing exceeded the reference value from 1991/2 to 1996/7, peaking at £52.5 billion (7.9 per cent of GDP) in 1993/4. It then fell steadily, moving into net lending (or surplus) in 1998/9, before starting to rise again, returning to net borrowing (or deficit) in 2001/2. Net borrowing exceeded the reference value by a small amount between 2003/04 and 2005/06.

General government gross debt

The reference value for ‘excessive debt’ is 60 per cent of GDP. At the end of March 2011, gross debt was £1130.0 billion (76.6 per cent of GDP). As a percentage of GDP, it has risen every year since the end of March 2003. At the end of December 2011 gross debt was £1250.3 billion (82.9 per cent of GDP). See table M1.

Interventions in the financial crisis

The statistical recording of government and central bank rescue and support operations in the financial crisis has been the subject of international discussion. Further information can be found in the September 2009 Statistical Bulletin. More detail is also contained in the ONS article on classification of financial crisis interventions .

In January 2011, for the first time data for Royal Bank of Scotland and Lloyds Banking Group were fully incorporated into the public sector finances. This has impacted considerably on the measure of public sector net debt that includes the effects of the financial interventions. However, it does not impact significantly upon the General Government measures in this bulletin.

Supplementary table for the financial crisis

Member states are required to report to Eurostat, supplementary tables on the financial crisis.  The tables are published in this statistical bulletin as table M9.

Revisions since last data release

Table M8R presents revisions to key aggregates in this bulletin since data were last supplied to Eurostat in September 2011. These figures were reported in the September 2011 of this publication.

 Revisions to the deficit and debt data are generally less than 0.1 per cent of GDP.

Background notes

  1. Introducing government deficit and debt under the Maastricht Treaty

    Article 126 of the Treaty on the Functioning of the European Union obliges member states to avoid excessive budgetary deficits. The Protocol on the Excessive Deficit Procedure, annexed to the Maastricht Treaty, defines two criteria and reference values for compliance. These are a deficit to Gross Domestic Product (GDP) ratio of three per cent, and a debt to GDP ratio of 60 per cent.

    The first deadline (1 April) is designed so that the European Commission can gain an early sight of member states compliance for the previous calendar year. However, for the United Kingdom, uniquely within the European Union, the Stability and Growth Pact sets the reference period to be the financial year (1 April to 31 March), recognising the different budgetary year arrangements in the United Kingdom. The second deadline (1 October) thus provides the first estimate for the latest financial year.

    The Protocol on the Excessive Deficit Procedure gives the definition of Government deficit and debt according to the European System of Accounts. This is also the manual that governs the United Kingdom’s National Accounts.

    ‘Government’ is defined as the general government sector, which covers central, state and local government and social security funds. ‘Government deficit’ is defined as general government net borrowing.

  2. Coherence

    The net borrowing (or deficit) data in this Statistical Bulletin are based on that published in the Public Sector Finances Statistical Bulletin of 21 March 2012, but have been modified to take account of a European Regulation that requires payments on swaps to be treated as interest, and hence part of general government net borrowing as reported for the Excessive Deficit Procedure. The Regulation does not amend general government net borrowing for National Accounts purposes, which is also presented in the Public Sector Finances Statistical Bulletin. For these purposes swaps are treated as financial items.

    The reconciliation between the net borrowing published in this bulletin and that published in the Public Sector Finances (PSF) statistical bulletin of 21 March 2012 is shown in table M7. It can be seen in table M7 that the net borrowing figures do not only differ due to the different methodologies for swaps but also differ in two additional respects.

    The first difference relates to the recording of expenditure on single use military equipment. In the UK National Accounts and PSF this expenditure is currently recorded on an accrued basis in line with International Financial Reporting Standards (IFRS). However, in this publication the military expenditure is accrued to the point of delivery of the goods, in line with Eurostat guidance.

    The second difference relates to gilt coupon payments. Within this publication, the methodology for accruing coupon payments for gilts has been amended to accrue payments for each individual gilt issue. This replaces the previous approach of accruing the total cash payments. This new methodology more accurately reflects the accrued gilt interest payments and will be implemented in the Public Sector Finances statistical bulletin shortly.

    Previously ONS has also presented in table M7 an alternative version of the deficit, which is consistent with a Eurostat decision on the treatment of receipts for use of the spectrum. Over time, international opinion has settled on using this alternative approach. International guidance issued in 2010 now requires, in most cases, an approach that treats spectrum licenses as the sale of an intangible non-produced asset.

    In light of the clear international consensus that now exists in this area, and despite our original view that treatment as rent is closer to the spirit of ESA 95, ONS has concluded that treating the 2000 spectrum auction as the sale of an asset is an acceptable statistical treatment. ONS has therefore amended its treatment of the 3G spectrum licenses to record a sale of an asset in 2000. This alternative approach was first implemented in the September 2011 version of this bulletin, and subsequently in the March 2012 Public Sector Finances bulletin. The reasons for the decision were published on 31 August 2011.

  3. Revisions

    Table M8R presents revisions to the data since last supplied to Eurostat in September 2011. These figures were reported in the September version of this publication.

  4. Quality reporting

    Data in this bulletin are consistent with those published in the latest Public Sector Finances Statistical Bulletin. A summary quality report for the public sector finances can be found here Summary Quality Report for PSF. 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.

  5. Relevant links

    Detailed data supplied to Eurostat under the Excessive Deficit Procedure where the latest available data are those published in September 2011. Once finalised the data relating to this publication will be published on 26 April 2012.

    Eurostat analyses all data provided by member states and publish a press release which places the UK figures in a European context and provides commentary on any issues specific to member states.

    Details of the revisions policy for this and the other public sector finances statistical bulletins is available at the Public Sector Statistics Revisions policy page.

    Information on the classification of institutional units for the purposes of National Accounts can be found at the National Accounts classifications page.

    An inventory of the data sources used within the data supplied for the Excessive Deficit Procedure is available on the ONS website.

  6. Publication policy

    Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of those receiving pre-release access (41.5 Kb Pdf) to this bulletin.

    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.

    © Crown copyright 2012

    You may use or re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk.

  7. Following ONS

    Follow ONS on Twitter and Facebook. View the latest podcasts on YouTube

  8. 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: media.relations@ons.gsi.gov.uk

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Statistical contacts

Name Phone Department Email
David Bailey +44 (0)1633 455668 Public Sector Finances david.bailey@ons.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
Content from the Office for National Statistics.
© Crown Copyright applies unless otherwise stated.