Borrowing (public sector net borrowing excluding public sector banks) in April 2019 was £5.8 billion, £0.03 billion less than in April 2018; the lowest April borrowing since 2007.
Borrowing in the latest full financial year (April 2018 to March 2019) was £23.5 billion, £18.3 billion less than in the previous financial year; the lowest full financial year borrowing for 17 years (April 2001 to March 2002).
Borrowing in the latest full financial year was £0.7 billion more than the £22.8 billion forecast by the Office for Budget Responsibility (OBR) in its Economic and Fiscal Outlook – March 2019.
Debt (public sector net debt excluding public sector banks) at the end of April 2019 was £1,797.7 billion (or 82.7% of gross domestic product (GDP)); an increase of £20.5 billion (or a decrease of 1.6 percentage points of GDP) on April 2018.
Debt at the end of April 2019 excluding Bank of England (mainly quantitative easing) was £1,610.1 billion (or 74.1% of GDP); an increase of £26.9 billion (or a decrease of 1.0 percentage point of GDP) on April 2018.
Central government net cash requirement was £35.6 billion in the latest full financial year; £3.0 billion less than in the previous financial year.
Central government net cash requirement excluding both UK Asset Resolution Ltd and Network Rail was £36.9 billion in the latest full financial year; £3.8 billion less than in the previous financial year.
In the UK, the public sector consists of five sub-sectors: central government, local government, public non-financial corporations, Bank of England and public financial corporations (or public sector banks).
Unless otherwise stated, the figures quoted in this bulletin exclude public sector banks (that is, currently only Royal Bank of Scotland (RBS)), as the reported position of debt (and to a lesser extent borrowing) would be distorted by the inclusion of RBS's balance sheet (and transactions). This is because government does not need to borrow to fund the debt of RBS, nor would surpluses achieved by RBS be passed on to government, other than through any dividends paid as a result of government equity holdings.
Public sector net borrowing excluding public sector banks (PSNB ex) measures the gap between revenue raised (current receipts) and total spending (current expenditure plus net investment (capital spending less capital receipts)). Public sector net borrowing is often referred to by commentators as “the deficit”.
The public sector net cash requirement (PSNCR) represents the cash needed to be raised from the financial markets over a period of time to finance the government’s activities. This can be close to the deficit for the same period but there are some transactions, for example, loans to the private sector, which need to be financed but do not contribute to the deficit. It is also close but not identical to the changes in the level of net debt between two points in time.
Public sector net debt excluding public sector banks (PSND ex) represents the amount of money the public sector owes to private sector organisations including overseas institutions, largely as a result of issuing gilts and Treasury Bills, less the amount of cash and other short-term assets it holds. Public sector net debt is often referred to by commentators as “national debt”.
While borrowing (or the deficit) represents the difference between total spending and receipts over a period of time, debt represents the total amount of money owed at a point in time.
The debt has been built up by successive government administrations over many years. When the government borrows (that is, runs a deficit), this normally adds to the debt total. So reducing the deficit is not the same as reducing the debt.
Accounting for student loans
On 17 December 2018, we announced our decision on how we will treat student tuition fee and maintenance loans in the government’s accounts. We have published a blog explaining our role and why we have taken these decisions. We aim to implement these changes in September 2019.Back to table of contents
This section presents information on aspects of data or methodology that have been introduced or improved since the publication of the previous bulletin (24 April 2019), along with supporting information users may find useful.
UK Asset Resolution Ltd (UKAR) asset sale
On 2 April 2019, the government announced the £4.9 billion sale of Bradford and Bingley (B&B) mortgages to Citi, enabling the government to recover the full amount of the loan to Northern Rock (NRAM) and Bradford and Bingley.
B&B’s and NRAM’s closed loan books are managed by UK Asset Resolution Limited (UKAR) on behalf of the government. Following this transaction, UKAR now owns £8 billion worth of assets, down from £14 billion in September 2018 and from £116 billion in 2010.
The proceeds of such sales reduce the central government net cash requirement (CGNCR) and public sector net debt (PSND) by an amount corresponding to the cash raised from the sale, but have no impact on public sector net borrowing.
Royal Bank of Scotland Dividend
On 14 February 2019, The Royal Bank of Scotland Group plc (RBS) announced the dividend price to be paid to shareholders on 30 April 2019. As a shareholder, the government received £0.8 billion. This receipt has reduced the central government net borrowing and net cash requirement in April 2019, along with public sector net debt at the end of April 2019 by £0.8 billion respectively.
Bank of England Asset Purchase Facility Fund
In April 2019, there was a £2.6 billion dividend transfer from the Bank of England Asset Purchase Facility Fund (BEAPFF) to HM Treasury. As with other such transfers, central government net borrowing will be reduced by an amount equivalent to the transfer, while the net borrowing of Bank of England will be increased by an equal and offsetting amount, with no impact at a public sector borrowing level. We are currently reviewing our recording of such interest payments (see Section 12 for more detail).
The extent to which such dividend transfers can impact on central government net borrowing in any financial year is limited by the size of the Bank of England entrepreneurial income in that financial year. Cumulative transfers above this limit are treated as equity withdrawals. The Bank of England entrepreneurial income for the financial year ending March 2019 (April 2018 to March 2019) was calculated as £11.2 billion.Back to table of contents
Data for the most recent months
The data for the latest month of every release contain some forecast data. The initial outturn estimates for the early months of the financial year, particularly April, contain more forecast data than other months, as profiles of tax receipts, along with departmental and local government spending are still provisional. This means that the data for these months are typically more prone to revision than other months and can be subject to sizeable revisions in later months.
Data for the most recent financial year
Borrowing in the latest full financial year (April 2018 to March 2019) was £23.5 billion, a £1.1 billion reduction on our first estimate of £24.7 billion (published on 24 April 2019). These are not final figures and will be revised over the coming months as we replace our initial estimates with provisional and then final outturn data.
Due to HM Revenue and Customs (RC) system issues, the latest Pay As You Earn (PAYE) Income Tax and National Insurance contributions data have not been accrued in the usual way, following national accounts methods. This has no impact on the cash figures, but does affect total tax revenue, total receipts and also public sector net borrowing (PSNB), which are all calculated on an accrued basis. As a result, it is to be expected that revisions next month, for the period April 2018 to April 2019, may be larger than usual.
Revisions to the first reported estimate of public sector net borrowing: Appendix F summarises revisions to the first estimate of public sector borrowing (excluding public sector banks) by sub-sector for the last six financial years. Revisions are shown at 6 and 12 months after year end.
For example, when we first published our estimate of public sector net borrowing (PSNB ex) for the financial year ending March 2018 (April 2017 to March 2018) in April 2018, we estimated it as £42.6 billion. In April 2019, 12 months later, we present a revised estimate of £41.8 billion, £0.8 billion lower than our initial estimate.
We have published an article, Public Sector Finances – Sources summary and their timing (PDF, 22.8KB), which provides a brief summary of the different sources used and the implications of using those data in the monthly Public sector finances (PSF) statistical bulletin.
Figures expressed as a ratio of gross domestic product
At the end of each financial year, while data for current budget deficit, net investment and net borrowing for the final quarter of the financial year (January to March) are available, gross domestic product (GDP) for the corresponding period is not. To enable us to publish estimates of these figures as ratios of GDP for the latest full financial year, the final quarter of the GDP denominator is estimated based on forecasts produced by the Office for Budget Responsibility (OBR).
This estimate of GDP will be used in the March, April and May publications and revised in the June publication when the published value of GDP becomes available.Back to table of contents
In April 2019, the public sector spent more money than it received in taxes and other income, meaning it had to borrow £5.8 billion, marginally less than in April 2018.
Figure 1 summarises public sector borrowing by sub-sector in April 2019 and compares this with the equivalent measures in the same month a year earlier (April 2018). This presentation splits public sector net borrowing excluding public sector banks (PSNB ex) into each of its four sub-sectors: central government, local government, public corporations and Bank of England.
Central government receipts in April 2019 increased by £1.4 billion (or 2.4%) compared with April 2018, to £61.2 billion, while total central government expenditure increased by £1.8 billion (or 2.7%) to £66.5 billion.
Much of this annual growth in central government receipts in April 2019 came from Income Tax-related revenue, with National Insurance contributions and Income Tax increasing by £0.5 billion and £0.2 billion respectively.
This month, accrued receipts of Value Added Tax (VAT) increased by £0.4 billion compared with April 2018, while Corporation Tax (CT) receipts increased by £0.1 billion over the same period. It is important to note that both of these taxes contain forecast cash receipts data and are liable to revision as actual cash receipts data are received.
In April 2019, the interest and dividends paid to central government increased by £0.4 billion compared with the previous year. A £0.8 billion dividend payment from the Royal Bank of Scotland Group plc (RBS) was partially offset by a reduction of £0.4 billion in the dividends received from the Bank of England Asset Purchase Facility Fund (BEAPFF). It is important to remember that transfers between BEAPFF and HM Treasury are public sector borrowing neutral.
Over the same period, there were notable increases in expenditure on goods and services, net social benefits and gross capital formation of £1.4 billion, £0.6 billion and £0.5 billion respectively.
Interest payments on the government’s outstanding debt decreased by £0.1 billion compared with April 2018, due largely to movements in the Retail Prices Index (RPI) to which index-linked bonds are pegged. The relationship between the RPI and the valuation index-linked bonds is explored further in the public sector finances Quality and Methodology Information report.
Both the local government and public corporations data for April 2019 are initial estimates, largely based on the Office for Budget Responsibility (OBR) forecasts.
Due to the volatility of the monthly data, the cumulative financial year-to-date (or full financial year as reported this month) borrowing figures often provide a better indication of the position of the public finances than the individual months.
In the latest full financial year (April 2018 to March 2019), public sector spending exceeded the money received in taxes and other income. This meant the public sector had to borrow £23.5 billion; that is, £18.3 billion less than the previous full financial year. Borrowing in this financial year is the lowest for any April to March period for 17 years.
The public sector spent £43.3 billion on capital items (or net investment), such as infrastructure, while the “day-to-day” activities of the public sector (current budget) were in surplus by £19.8 billion.
Figure 2 presents both monthly and cumulative public sector net borrowing (excluding public sector banks) in the latest financial year-to-date (April 2019) and compares these with the previous financial year.
Figure 3 summarises the contributions of each sub-sector to public sector net borrowing (excluding public sector banks) in the latest full financial year (April 2018 to March 2019) and compares these with the previous financial year.
The difference between central government's income and spending makes the largest contribution to the amount borrowed by the public sector. In the latest full financial year (April 2018 to March 2019), of the £23.5 billion borrowed by the public sector, £19.6 billion was borrowed by central government and £7.7 billion was borrowed by local government, while the borrowing of the Bank of England and public corporations was in surplus by £3.3 billion and £0.6 billion respectively.
In the latest full financial year (April 2018 to March 2019), central government received £739.7 billion in income, including £559.0 billion in taxes. This was 4.9% more than in the previous financial year.
Over the same period, central government spent £740.7 billion, an increase of 2.5%. Of this amount, just below two-thirds was spent by central government departments (Education, Defence, Health and Social Care), around one-third was spent on social benefits (such as pensions, unemployment payments, Child Benefit and Maternity Pay), with the remainder being spent on capital investment and interest on government’s outstanding debt.
Figure 4 illustrates that annual borrowing has been generally falling since the peak in the financial year ending (FYE) March 2010 (April 2009 to March 2010).
In the latest full financial year (April 2018 to March 2019), the £23.5 billion (or 1.1% of gross domestic product (GDP)) borrowed by the public sector was less than one-fifth (15.3%) of the amount seen in the FYE March 2010, when borrowing was £153.1 billion (or 9.9% of GDP).
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Public sector net debt (PSND ex) represents the amount of money the public sector owes to private sector organisations (including overseas institutions), that has built up by successive government administrations over many years.
When the government borrows, this normally adds to the debt total, but it is important to remember that reducing the deficit is not the same as reducing the debt.
At the end of April 2019, the amount of money owed by the public sector to the private sector stood at around £1.8 trillion (Figure 5), which equates to 82.7% of the value of all the goods and services currently produced by the UK economy in a year (or gross domestic product (GDP)).
The Bank of England’s (BoE) contribution to net debt is largely a product of their quantitative easing measures, namely the Bank of England Asset Purchase Facility Fund (APF) and the Term Funding Scheme (TFS). If we were to exclude BoE from our calculation of public sector net debt (excluding public sector banks), it would reduce by £187.6 billion, from £1,797.7 billion to £1,610.1 billion, or from 82.7% of GDP to 74.1%.
Figure 6 breaks down outstanding public sector net debt at the end of April 2019 into the sub-sectors of the public sector. In addition to public sector net debt excluding public sector banks (PSND ex), this presentation includes the effect of public sector banks on debt.
Figure 7 incorporates the borrowing components detailed in Figure 2 to illustrate how the differences between income and spending (both current and capital) have led to the accumulation of debt in the current financial year-to-date (April 2019).
The reconciliation between public sector net borrowing and net cash requirement is presented in more detail in Table REC1 in the Public sector finances Tables 1 to 10: Appendix A dataset.
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Revisions can be the result of both updated data sources and methodology changes. This month, revisions to public sector net borrowing are a result of updated data.
Table 1 presents the revisions to the headline statistics presented in this bulletin compared with those presented in the previous publication (published on 24 April 2019).
|£ billion¹ (not seasonally adjusted)|
|PSND % |
Download this table Table 1: Revisions to main aggregates.xls .csv
Revisions to public sector net borrowing (excluding public sector banks) in the financial year ending March 2019 (April 2018 to March 2019)
This bulletin presents the second estimates of UK public sector finances for the financial year ending March 2019; these are not final figures and will be revised over the coming months as we replace our initial estimates with provisional and then final outturn data.
Public sector net borrowing excluding public sector banks (PSNB ex) in the period April 2018 to March 2019 has been revised down by £1.1 billion compared with figures presented in the previous bulletin (published on 24 April 2019)) due to updates from central government.
Since our last publication, central government net borrowing over the financial year has reduced by £1.0 billion. Central government receipts have increased by £0.2 billion, with accrued Value Added Tax (VAT ) receipts increasing by £0.3 billion, as forecast cash data are replaced by cash revenue. Changes to in-year receipt profiles of both Income Tax and National Insurance contributions have resulted in larger March receipts than previously recorded. However, these have been largely offset across the financial year.
Previous estimates of current expenditure on goods and services have been reduced by £0.4 billion across the financial year, while on the capital side a £0.8 billion decrease to the estimate of capital transfers to the private sector has been partially offset by an increase of £0.4 billion to gross capital formation.
Updated current and capital transfer data between central government and local government have resulted in a reduction to local government borrowing across the final quarter of the financial year, though this has had an equal and opposite effect on central government borrowing over the same period.
Revisions to public sector net debt excluding public sector banks
Public sector net debt excluding public sector banks (PSND ex) at the end of March 2019 has been revised down by £0.2 billion compared with that presented in the previous bulletin (published on 24 April 2019), due to the inclusion of improved Network Rail data.
Updated local government bank and building society data also led to a downward revision to our previous estimate of PSND ex at the end of March 2019.Back to table of contents
The independent Office for Budget Responsibility (OBR) is responsible for the production of official forecasts for government. These forecasts are usually produced twice a year, in spring and autumn.
On 13 March 2019, the government published its Spring Statement 2019. On the same day the OBR published updated forecasts for debt and borrowing, on which the Spring Statement 2019 are based.
The OBR forecasts used in this bulletin are based on those published in its Economic and Fiscal Outlook – March 2019. In this publication OBR expects public sector net borrowing (excluding public sector banks) to be £22.8 billion in the financial year ending March 2019, increasing to £29.3 billion in the financial year ending March 2020.
Table 2 compares the current outturn estimates for each of our main public sector (excluding public sector banks) aggregates for the latest full financial year with corresponding OBR forecasts for the following financial year. Further, it compares the latest full financial year (April 2018 to March 2019) outturn estimates with those of the previous financial year.
Caution should be taken when comparing public sector finances data with OBR figures for the full financial year. Data are not finalised until some time after the financial year ends, with initial estimates made soon after the end of the financial year often subject to sizeable revisions in later months as forecasts are replaced with audited outturn data.
There may also be known methodological differences between OBR forecasts and outturn data.
|Excluding public sector banks||£ billion¹ (not seasonally adjusted)|
|Full financial year|
|Current budget deficit²||-19.8||-20.4||0.6||-17.7|
|Net debt as a percentage of GDP⁶||83.1||83.3||-0.2||82.2|
Download this table Table 2: Latest outturn estimates compared with Office for Budget Responsibility forecasts.xls .csv
The UK government debt and deficit statistical bulletin is published quarterly (in January, April, July and December each year), to coincide with when the UK and other EU member states are required to report on their deficit (or net borrowing) and debt to the European Commission.
On 17 April 2019, we published UK government debt and deficit: December 2018, consistent with Public sector finances, UK: February 2019 (published on 21 March 2019). In this publication we stated that:
general government gross debt was £1,837.5 billion at the end of December 2018, equivalent to 86.7% of gross domestic product (GDP); 26.7 percentage points above the Maastricht reference value of 60%
general government deficit (or net borrowing) was £32.3 billion in the calendar year ending December 2018, equivalent to 1.5% of GDP; 1.5 percentage points below the Maastricht reference value of 3%
This month we publish revisions to the data published on 17 April 2019. While general government gross debt at the end of December 2018 remains unchanged at £1,837.5 billion, the estimate of general government deficit in the calendar year ending December 2018 has increased by £2.1 billion to £34.4 billion.
It is important to note that the GDP measure used as the denominator in the calculation of the debt ratios in the UK government debt and deficit statistical bulletin, differs from that used within the Public sector finances statistical bulletin.Back to table of contents
The public sector finances Quality and Methodology Information report contains important information on:
the strengths and limitations of the data and how it compares with related data
uses and users of the data
how the output was created
the quality of the output including the accuracy of the data
The Public sector finances methodological guide provides comprehensive contextual and methodological information concerning the monthly Public sector finances statistical bulletin.
The guide sets out the conceptual and fiscal policy context for the bulletin, identifies the main fiscal measures and explains how these are derived and inter-related. Additionally, it details the data sources used to compile the monthly estimates of the fiscal position.
Local government forecasts
In recent years, planned expenditure initially reported in local authority budgets has systematically been higher than the final outturn expenditure reported in the audited accounts. We therefore include adjustments to reduce the amounts reported at the budget stage.
Further information on these and additional adjustments can be found in the public sector finances Quality and Methodology Information report.Back to table of contents
This section presents information on aspects of data or methodology that are planned but not yet included in the public sector finances.
Developments in public sector finance statistics
In our 2018 article Looking ahead: developments in public sector finance statistics, we provide users with early sight of those areas where the fiscal statistics may be significantly impacted upon by methodological or classification changes during the coming 24 months.
We plan to publish an update to this article on 31 May 2019. In this article we list a number of short-term areas of work that we aim to implement in public sector finances statistics within 18 months from the date of this publication. These are:
treatment of student loans
presentation of pension data on a gross basis
International Monetary Fund’s Government Finance Statistics framework
treatment of depreciation
continuous development of public sector net financial liabilities
recording of leases
The article also provides some detail on the areas of planned medium and longer-term development.
Accounting for student loans: how we are improving the recording of student loans in government accounts
On 17 December 2018, we announced our decision on how we will treat student tuition fee and maintenance loans in the government’s accounts. We have published a blog explaining our role and why we have taken this decision.
In addition, we have published a technical note, giving further information about how we came to our decision.
It is anticipated that implementation of this decision into our headline statistics will take some time and that any change will be reflected in the public sector finances in September 2019.
Company tax credits
In conjunction with HM Revenue and Customs (HMRC), we are currently reviewing our recording of company tax credits. We will announce the findings of this review and introduce any data revisions at the earliest opportunity.
Bank of England Asset Purchase Facility Fund
In the financial year ending March 2019, £8.0 billion in dividends were transferred from the Bank of England Asset Purchase Facility Fund (BEAPFF) to HM Treasury. As with other such transfers, central government net borrowing in this period was reduced by an amount equivalent to the transfer, while the net borrowing of Bank of England was increased by an equal and offsetting amount, with no impact at a public sector borrowing level.
In conjunction with HM Treasury, we are currently reviewing our recording of these interest payments and dividends and we will announce the findings of this review at the earliest opportunity. We expect any data revisions that arise as a result of this exercise to be public sector net borrowing neutral.
Clinical Negligence Indemnity Cover
On 1 April 2019, the government announced the Clinical Negligence Scheme for General Practise (CNSGP), operated by NHS Resolution on behalf of the Secretary of State for Health and Social Care.
The scheme provides comprehensive cover to all General Practitioners (GPs) and their wider practise team for clinical negligence relating to NHS services occurring from 1 April 2019. In parallel, the government has agreed commercial terms with the Medical Protection Society covering claims for historic NHS clinical negligence incidents of their GP members occurring at any time before 1 April 2019.
We are currently assessing the implications of this scheme on the public sector finances and will announce our findings at the earliest opportunity.
EU withdrawal agreement
Although the Office for Budget Responsibility (OBR) discusses the EU settlement in their Economic and Fiscal Outlook – March 2019 report, the details in the report are still subject to negotiation.
There is insufficient certainty at this stage for us to complete a formal assessment of impact on the UK public sector finances.
On 28 January 2019, National Statistician John Pullinger released a statement outlining our legislative preparations for a possible no-deal EU exit.
East Coast Mainline
On 16 May 2018, the government announced that from 24 June 2018, London North Eastern Railway (LNER) will take over the running of East Coast Mainline services. On 31 August 2018, we announced that LNER would be classified to the public non-financial corporations sub-sector, effective from 14 February 2018. We are currently investigating the implications of this decision and our conclusions will be announced in due course.
Following Carillion Plc declaring insolvency on 15 January 2018, the UK government announced that it would provide the necessary funding required by the Official Receiver, to ensure continuity of public services through an orderly liquidation. The Official Receiver has been appointed by the court as liquidator, along with partners at PwC that have been appointed Special Managers. The defined benefit pension schemes of former Carillion employees are currently being assessed by the Pension Protection Fund (PPF) prior to any transition into the PPF scheme.
We are currently investigating the various impacts of the liquidation of Carillion on the public sector finances, including in relation to the public-private partnership projects in which Carillion was involved and the additional funding that the government has provided to maintain public services. We will announce our findings in due course.
Prior to liquidation, Carillion held approximately 450 contracts with government, representing 38% of Carillion’s 2016 reported revenue.
The sale of railway arches
On 11 September 2018, Network Rail announced they had agreed terms for the sale of their Commercial Estate business in England and Wales. On 4 February 2019, the National Audit Office confirmed that Network Rail had completed a £1.46 billion sale of its commercial property portfolio consisting of approximately 5,200 properties across England and Wales, mainly railway arches.
Public sector net debt at the end of February 2019 and the central government net cash requirement in February 2019 were each reduced by an amount equivalent to the cash received by central government from the sale.
We are currently investigating the nature of the transaction to ensure that the effects will be fully reflected in the public sector finances. It has yet to be determined whether public sector net borrowing is affected and therefore it remains unchanged.Back to table of contents
Contact details for this Statistical bulletin
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