Public sector finances, UK: August 2022

Table 1: Public sector net borrowing
Public sector net borrowing by sub-sector compared with the same month a year earlier, UK, August 2022
	August (£ billion)		Change on a year ago
	2021	2022	£ billion	%
Central Government	14.6	9.9	-4.7	-32.2
Local Government	1.8	2.5	0.6	34.1
Public Corporations	0.0	-0.1	0.0	-
Public Sector Pensions	-0.6	-0.3	0.3	44.0
Sub-total: Public Sector ex BoE and Banks	15.8	12.0	-3.9	-24.3
Bank of England	-1.4	-0.2	1.3	89.3
Sub-total: Public Sector ex¹	14.4	11.8	-2.6	-18.0
Public Sector Banks	-0.8	-0.8	0.0	0.1
Total: Public Sector	13.7	11.1	-2.6	-19.0

Download this table Table 1: Public sector net borrowing

Central government forms the largest part of the public sector and the relationship between its receipts and expenditure is the key determinant of public sector current budget deficit and borrowing.

Figure 2: Monthly central government expenditure generally exceeds income

Central government net borrowing, £ billions, UK, January 2019 to August 2022

Source: Office for National Statistics – Public sector finances

Download this chart Figure 2: Monthly central government expenditure generally exceeds income

Central government receipts

Central government receipts in August 2022 were estimated to have been £69.6 billion, which was £5.6 billion more than in August 2021. Of these receipts, tax revenue increased by £3.9 billion to £51.4 billion.

Table 2: Central government current receipts
Central government receipts compared with the same month a year earlier, UK, August 2022
	August (£ billion)		Change on a year ago
	2021	2022	£ billion	%
Value Added Tax	13.2	14.6	1.4	10.9
Fuel Duty	2.3	2.1	-0.2	-6.9
Alcohol Duty	1.1	1.1	0.0	0.2
Tobacco Duty	1.2	1.1	0.0	-3.8
Business Rates	2.0	2.3	0.2	11.1
Stamp Duty (L&P)¹	1.0	1.7	0.7	65.9
Customs Duties	0.4	0.4	0.0	6.9
Other taxes on production	2.9	3.6	0.7	24.1
Pay As You Earn Income Tax	14.6	15.6	1.0	6.8
Self-Assessed Income Tax	2.2	2.3	0.0	1.8
Corporation Tax	5.2	5.4	0.2	4.2
Other Taxes on Income & wealth²	-0.5	-0.6	-0.1	20.0
Other Taxes	1.9	1.9	0.0	-1.2
Compulsory social contributions	12.9	14.3	1.4	11.0
Interest & Dividends receipts	0.7	0.8	0.1	19.8
Other receipts	3.0	3.1	0.1	2.6
Total Current Receipts	64.1	69.6	5.6	8.7

Download this table Table 2: Central government current receipts

In the most recent months, tax receipts recorded on an accrued basis are subject to some uncertainty. This is because many taxes such as value added tax (VAT), corporation tax and Pay As You Earn (PAYE) income tax contain some forecast cash receipts data and are liable to revision when actual cash receipts data are received.

The forecasts underlying our current tax estimates reflect the expectations published in the Office for Budget Responsibility's (OBR) Economic and fiscal outlook – March 2022 and the subsequent monthly profiles published on 12 May 2022.

Central government expenditure

Central government bodies spent £73.2 billion on current (or day-to-day) expenditure in August 2022, which was £0.1 billion more than in August 2021.

Table 3: Central government expenditure
Central government expenditure compared with the same month a year earlier, UK, August 2022
	August (£ billion)		Change on a year ago
	2021	2022	£ billion	%
Interest payments¹	6.8	8.2	1.5	22.1
National Insurance Fund Benefits	9.5	10.1	0.6	6.0
Social Assistance	10.2	10.5	0.3	2.8
Other Net social Benefits	0.0	0.2	0.2	-
Procurement² ³	14.9	15.7	0.7	5.0
Pay	13.4	14.2	0.8	6.3
Transfers to Local Government⁴	9.2	8.9	-0.3	-3.3
Contributions to EU⁵	0.0	0.0	0.0	-
Current transfers paid abroad - UK payments to EU⁶	0.8	0.7	-0.1	-10.3
Current transfers paid abroad - Other	0.6	0.3	-0.3	-50.0
Subsidies - CJRS⁷	0.8	0.0	-0.8	-100.0
Subsidies - SEISS⁸	2.1	0.0	-2.1	-100.0
Subsidies - Other	2.5	2.1	-0.4	-16.0
Other Expenditure	2.3	2.2	-0.1	-4.3
Total Current Expenditure	73.0	73.2	0.1	0.2
Depreciation	2.6	2.8	0.1	4.9
Net Investment	3.0	3.6	0.6	19.6
Total Expenditure	78.7	79.6	0.9	1.1

Download this table Table 3: Central government expenditure

Interest payable on central government debt

Since mid-2021, the cost of servicing central government debt has increased considerably. These rising costs do not principally reflect recent increases in the level of government debt, nor is the change in servicing costs driven by large increases in the interest – or coupon – payments by government. Instead the recent high levels of debt interest payable are largely a result of higher inflation, with the interest payable on index-linked gilts rising in line with the Retail Prices Index (RPI).

In August 2022, the interest payable on central government debt was £8.2 billion, of which £4.7 billion reflected the impact of the RPI.

Figure 3: The interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI), adding volatility to central government debt interest costs

Central government debt interest payable, £ billions, UK, August 2020 to August 2022

Source: Office for National Statistics – Public sector finances

Download this chart Figure 3: The interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI), adding volatility to central government debt interest costs

The inflation-linked portion of interest payable on most index-linked gilts is calculated using a three-month lagged RPI. In August 2022, we reference the RPI movement between May and June 2022. RPI increases in the most recent months will be reflected in our interest estimates for future months.

Figure 4: The Office for Budget Responsibility (OBR) estimates that the debt interest payable on central government’s outstanding debt will be £87.2 billion for the current financial year

Forecast and estimated debt payables, £ billions, UK, April 2022 to March 2023

Source: Office for National Statistics – Public sector finances and Office for Budget Responsibility (OBR)

Notes:

This chart uses forecast data published in the Economic and fiscal outlook – March 2022 and the subsequent monthly profiles published on 12 May 2022.

Download this chart Figure 4: The Office for Budget Responsibility (OBR) estimates that the debt interest payable on central government’s outstanding debt will be £87.2 billion for the current financial year

While any RPI uplift will affect accrued expenditure (as used in the calculation of borrowing), it will not be wholly and immediately reflected in the central government net cash requirement. These movements are reflected in the government’s liabilities, which will be realised as the existing stock of index-linked gilts is redeemed.

On 18 July 2022, we published a methodology article explaining The calculation of interest payable on government gilts.

4. Borrowing in the financial year to August 2022

Public sector net borrowing excluding public sector banks (PSNB ex) was £58.2 billion in the financial year (FY) to August 2022, £21.4 billion less than in the same period last year.

Figure 5: Borrowing in the financial year-to-August 2022 was £0.2 billion more than the £58.0 billion forecast by the Office for Budget Responsibility (OBR)

Public sector net borrowing excluding public sector banks, £ billions, UK, financial year ending (FYE) 1994 to FYE 2023

Source: The OBR and the Office for National Statistics – Public sector finances

Notes:

1. This chart uses forecast data published in the Economic and fiscal outlook – March 2022 and the subsequent monthly profiles published on 12 May 2022.

Download this chart Figure 5: Borrowing in the financial year-to-August 2022 was £0.2 billion more than the £58.0 billion forecast by the Office for Budget Responsibility (OBR)

Table 4: Public sector net borrowing
Public sector net borrowing by sub-sector in the financial year-to-August 2022 compared with the same period a year earlier, UK
	Financial year-to-date (£ billion)²		Change on a year ago
	2021/22	2022/23	£ billion	%
Central Government	97.9	60.5	-37.3	-38.1
Local Government	-9.6	-1.5	8.1	84.1
Public Corporations	-0.2	-0.4	-0.2	-
Public Sector Pensions	-3.0	-1.7	1.3	44.0
Sub-total: Public Sector ex BoE and Banks	85.0	56.9	-28.1	-33.1
Bank of England	-5.4	1.3	6.7	-
Sub-total: Public Sector ex¹	79.7	58.2	-21.4	-26.9
Public Sector Banks	-3.8	-3.8	0.0	0.1
Total: Public Sector	75.9	54.4	-21.4	-28.3

Download this table Table 4: Public sector net borrowing

Public sector current budget deficit

The public sector current budget deficit is the gap between current expenditure and current receipts on an accrued basis, having taken account of depreciation. The current budget deficit can be thought of as borrowing to fund day-to-day spending, as it excludes the capital expenditure (or net investment) present in the wider net borrowing measure.

Table 5: Public sector current budget deficit
Public sector current budget deficit by sub-sector in financial year-to-August 2022 compared with the same period a year earlier, UK
	Financial year-to-date (£ billion)²		Change on a year ago
	2021/22	2022/23	£ billion	%
Central Government	76.0	40.6	-35.4	-46.6
Local Government	-4.4	3.9	8.3	-
Public Corporations	-1.0	-0.7	0.3	34.2
Public Sector Pensions	-1.4	-2.1	-0.7	-52.0
Sub-total: Public Sector ex BoE and Banks	69.2	41.7	-27.5	-39.7
Bank of England	-5.4	1.3	6.7	-
Sub-total: Public Sector ex¹	63.9	43.0	-20.8	-32.6
Public Sector Banks	-3.6	-3.6	0.0	0.2
Total: Public Sector	60.2	39.4	-20.8	-34.6

Download this table Table 5: Public sector current budget deficit

Central government receipts

Central government receipts in the financial year (FY) to August 2022 were £359.7 billion, which was £40.6 billion more than a year earlier. Of these, tax receipts were £262.8 billion, which was £26.4 billion more than in the FY to August 2021.

Table 6: Central government current receipts
Central government receipts in financial year-to-August 2022 compared with the same period a year earlier, UK
	Financial year-to-date (£ billion)²		Change on a year ago
	2021/22	2022/23	£ billion	%
Value Added Tax	64.9	73.1	8.1	12.5
Fuel Duty	11.1	10.7	-0.4	-3.5
Alcohol Duty	5.6	5.3	-0.3	-5.8
Tobacco Duty	4.2	4.1	0.0	-1.1
Business Rates	9.3	12.2	2.8	30.2
Stamp Duty (L&P)¹	5.6	7.8	2.1	37.7
Customs Duties	1.8	2.1	0.3	19.0
Other taxes on production	14.9	18.2	3.3	22.1
Pay As You Earn Income Tax	73.9	81.8	7.9	10.7
Self-Assessed Income Tax	12.1	12.6	0.5	4.2
Corporation Tax	25.6	27.1	1.5	6.0
Other Taxes on Income & wealth³	-1.4	-1.5	-0.1	7.1
Other Taxes	8.8	9.2	0.4	4.9
Compulsory social contributions	62.7	73.2	10.5	16.7
Interest & Dividends receipts	5.0	8.6	3.6	72.7
Other receipts	15.0	15.1	0.2	1.0
Total Current Receipts	319.1	359.7	40.6	12.7

Download this table Table 6: Central government current receipts

Central government expenditure

Central government bodies spent £386.6 billion on current (or day-to-day) expenditure in the FY to August 2022, which was £4.6 billion more than in the same five-month period last year.

In April 2022, we recorded the Council Tax rebate in England as a payable tax credit from central government to households. This payment was recorded within the Other Expenditure category in Table 7, and the additional expenditure increased central government and subsequently public sector net borrowing by £3.0 billion in April 2022.

Table 7: Central government expenditure
Central government expenditure in financial year-to-August 2022 compared with the same period a year earlier, UK
	Financial year-to-date (£ billion)⁹		Change on a year ago
	2021/22	2022/23	£ billion	%
Interest payments¹	29.7	49.0	19.3	65.1
National Insurance Fund Benefits	47.0	49.3	2.3	5.0
Social Assistance	50.7	53.5	2.8	5.5
Other Net social Benefits	1.0	1.7	0.7	70.0
Procurement² ³	78.5	77.9	-0.6	-0.8
Pay	67.9	70.7	2.7	4.0
Transfers to Local Government⁴	61.7	54.0	-7.7	-12.5
Contributions to EU⁵	0.0	0.0	0.0	-
Current transfers paid abroad - UK payments to EU⁶	2.4	3.9	1.5	62.1
Current transfers paid abroad - Other	2.1	2.0	-0.1	-4.8
Subsidies - CJRS⁷	7.8	0.0	-7.8	-100.0
Subsidies - SEISS⁸	7.6	0.0	-7.6	-100.0
Subsidies - Other	14.1	10.4	-3.7	-26.2
Other Expenditure	11.5	14.2	2.7	23.5
Total Current Expenditure	382.0	386.6	4.6	1.2
Depreciation	13.1	13.7	0.6	4.4
Net Investment	21.8	20.0	-1.9	-8.6
Total Expenditure	417.0	420.3	3.3	0.8

Download this table Table 7: Central government expenditure

5. Borrowing in the financial year ending March 2022

The public sector borrowed £133.7 billion in the financial year ending (FYE) March 2022. This was £5.9 billion more than the £127.8 billion forecast by the Office for Budget Responsibility (OBR) in its Economic and fiscal outlook -- March 2022. However, this was less than half of the £314.3 billion borrowed in the FYE March 2021.

Table 8: Public sector net borrowing
Public sector net borrowing by sub-sector in financial year ending (FYE) March 2022 compared with FYE March 2021, UK
	Financial year (£ billion)²		Change on a year ago
	2020/21	2021/22	£ billion	%
Central Government	322.1	154.4	-167.7	-52.1
Local Government	-0.9	-3.1	-2.2	-251.4
Public Corporations	-0.7	-1.4	-0.7	-102.3
Public Sector Pensions	-1.1	-7.3	-6.2	-562.0
Sub-total: Public Sector ex BoE and Banks	319.4	142.7	-176.8	-55.3
Bank of England	-5.1	-9.0	-3.9	-76.0
Sub-total: Public Sector ex¹	314.3	133.7	-180.7	-57.5
Public Sector Banks	-9.5	-9.2	0.3	3.0
Total: Public Sector	304.9	124.5	-180.4	-59.2

Download this table Table 8: Public sector net borrowing

The coronavirus (COVID-19) pandemic has had a substantial impact on the economy as well as public sector borrowing. Expressed as a ratio of UK gross domestic product (GDP), borrowing in the FYE March 2021 was 14.7%, which was the highest for 75 years. Latest estimates indicate that this ratio fell by 9.1 percentage points to 5.6% over the 12 months to March 2022.

Figure 6: Borrowing in the financial year ending (FYE) March 2022 was around a third of that in the FYE March 2021 when expressed as a ratio of gross domestic product (GDP)

Public sector net borrowing excluding public sector banks, percentage GDP, UK, FYE 1901 to FYE 2022

Source: Office for Budget Responsibility and Office for National Statistics – Public sector finances

Notes:

This chart uses historical data published in the Public finances databank 2022-23.

Download this chart Figure 6: Borrowing in the financial year ending (FYE) March 2022 was around a third of that in the FYE March 2021 when expressed as a ratio of gross domestic product (GDP)

6. Central government net cash requirement

The central government net cash requirement (CGNCR), excluding UK Asset Resolution Ltd and Network Rail, is the amount of cash needed immediately for the UK government to meet its obligations. To obtain cash, the UK government sells financial instruments, gilts or Treasury Bills.

The amount of cash required will be affected by changes in the timing of payments to and from central government, but it does not depend on forecast tax receipts in the same way as our accrued (or national accounts-based) measures of borrowing.

The CGNCR consequently contains the timeliest information and is less susceptible to revision than other statistics in this release.

However, as for any cash measure, the CGNCR does not reflect the overall amount for which the government is liable or the point at which any liability is incurred – it only reflects when cash is received and spent.

Table 9: Central government net cash requirement on own account
Central government cash receipts and outlays compared with the same month a year earlier, UK, August 2022
	August (billion)		Change on a year ago
	2021	2022	£ billion	%
Cash Receipts
HMRC Receipts: Total paid over Footnote 1	51.1	55.5	4.4	8.6
HMRC Receipts: Of which Income tax Footnote 2	16.3	18.5	2.2	13.5
HMRC Receipts: Of which NICs Footnote 3	12.4	14.6	2.1	17.3
HMRC Receipts: Of which VAT Footnote 4	14.7	13.0	-1.7	-11.8
HMRC Receipts: Of which Corporation tax Footnote 5	2.2	2.7	0.5	21.9
Interest & Dividends Receipts	0.5	0.5	0.0	6.3
Other Receipts Footnote 6	2.3	2.9	0.7	28.5
Total Cash Receipts	53.9	59.0	5.1	9.4
Cash Outlays
Interest Payments	0.5	0.9	0.3	59.0
Net Acquisition of Company Securities Footnote 7	0.0	0.0	0.0	-
Net Department Outlays: Total Footnote 8	61.4	62.5	1.1	1.8
Net Department Outlays: CJRS Footnote 9	1.0	0.0	-1.0	-100.0
Net Department Outlays: SEISS Footnote 10	2.1	0.0	-2.1	-100.0
Total Cash Outlays	61.9	63.4	1.4	2.3
Cash Balance
Own account Net Cash Requirement ex Footnote 11	8.1	4.4	-3.6	-45.1
NRAM and B&B	0.0	0.0	0.0	-
Network Rail	0.0	0.0	0.0	-
Own account Net Cash Requirement Footnote 12	8.0	4.4	-3.6	-45.3

Download this table Table 9: Central government net cash requirement on own account

Table 10: Central government net cash requirement on own account
Central government cash receipts and outlays in the financial year-to-August 2022 compared with the same period a year earlier, UK
	Financial year-to-date (£ billion)¹		Change on a year ago
	2021/22	2022/23	£ billion	%
Cash Receipts
HMRC Receipts: Total paid over	265.6	300.2	34.5	13.0
HMRC Receipts: Of which Income tax	88.7	99.9	11.2	12.6
HMRC Receipts: Of which NICs	64.0	74.7	10.7	16.8
HMRC Receipts: Of which VAT	67.0	67.4	0.4	0.6
HMRC Receipts: Of which Corporation tax	19.5	24.3	4.8	24.6
Interest & Dividends Receipts	4.3	6.7	2.4	55.6
Other Receipts	14.8	20.2	5.4	36.6
Total Cash Receipts	284.7	327.0	42.3	14.9
Cash Outlays
Interest Payments	12.5	12.6	0.1	0.9
Net Acquisition of Company Securities	-1.1	0.0	1.1	100.0
Net Department Outlays: Total	356.0	341.9	-14.1	-4.0
Net Department Outlays: CJRS	9.6	-0.1	-9.7	-101.0
Net Department Outlays: SEISS	7.6	0.0	-7.6	-100.0
Total Cash Outlays	367.3	354.5	-12.9	-3.5
Cash Balance
Own account Net Cash Requirement ex	82.6	27.4	-55.2	-66.8
NRAM and B&B	0.0	0.0	0.0	-
Network Rail	-0.1	-0.1	0.0	-
Own account Net Cash Requirement	82.5	27.3	-55.2	-66.9

Download this table Table 10: Central government net cash requirement on own account

7. Debt

Public sector net debt excluding public sector banks (PSND ex) was £2,427.5 billion at the end of August 2022, which was an increase of £195.2 billion compared with August last year.

The extra funding required by government over the course of the coronavirus (COVID-19) pandemic, combined with reduced cash receipts and a fall in gross domestic product (GDP), have all helped to push public sector net debt at the end of August 2022 to 96.6% of GDP.

Figure 7: Debt has reached levels last seen in the early 1960s

Public sector net debt excluding public sector banks, percentage of GDP, UK, financial year ending (FYE) 1921 to August 2022

Source: Office for Budget Responsibility and Office for National Statistics – Public sector finances

Notes:

This chart uses historical data published in the Public finances databank 2022-23.

Download this chart Figure 7: Debt has reached levels last seen in the early 1960s

Debt is largely made up of gilts (or bonds) issued to investors by central government. Of the £2,062.9 billion gilts in circulation at the end of August 2022:

£1,519.4 billion are conventional gilts that pay a fixed interest rate
£543.5 billion are index-linked gilts that pay an interest rate pegged to the Retail Prices Index (RPI) and are recorded at their redemption value

These gilts are auctioned by the Debt Management Office (DMO) in accordance with its financing remit, on behalf of central government.

The Bank of England's contribution to debt

The Bank of England's (BoE) contribution to public sector net debt is largely a result of its quantitative easing activities. These include both the gilt-purchasing activities and corporate bond holdings of the Asset Purchase Facility Fund (APF) and loans made under Term Funding Schemes (TFS).

In February 2022, the BoE announced that it will no longer be replenishing the gilt stock of the APF. Following a £3.2 billion gilt redemption in July 2022, the APF's gilt holdings currently stand at £731.7 billion (at redemption value).

It is important to understand that this £731.7 billion (conventional) gilt holding is not recorded directly as a component of public sector net debt. Instead, in August 2022, we record the £112.1 billion difference between the £843.8 billion of reserves created to purchase gilts (at market value) and the £731.7 billion redemption value of the gilts purchased.

Table PSA9A in our Public sector finances tables 1 to 10: Appendix A presents the impact of both APF and TFS as a part of the BoE's contribution to public sector net debt.

Our public sector net debt excluding the public sector banks and the Bank of England (PSND ex BoE) measure removes the debt impact of these schemes along with the other transactions relating to the normal operations of the BoE. Standing at £2,107.4 billion at the end of August 2022 (or around 83.8% of GDP), PSND ex BoE was £320.2 billion (or 12.8 percentage points of GDP) less than PSND ex.

Figure 8: The Bank of England contributed £320.2 billion to public sector net debt at the end of August 2022

Public sector net debt excluding public sector banks, UK, March 1994 to the end of August 2022

Source: Office for National Statistics – Public sector finances

Notes:

Includes Asset Purchase Facility (APF), which includes the Term Funding Scheme (TFS) and TFS incentives for small and medium-sized enterprises (TFSME).
Public sector net debt excluding public sector banks (PSND ex) is the combination of PSND ex Bank of England (BoE) plus the BoE’s contribution to PSND ex.
Public sector net debt excluding public sector banks (PSND ex) shown at the end of each financial year (March), unless otherwise stated.

Download this chart Figure 8: The Bank of England contributed £320.2 billion to public sector net debt at the end of August 2022

Public sector net financial liabilities

Public sector net financial liabilities excluding public sector banks (PSNFL ex) provides a more comprehensive measure of the public sector balance sheet. It captures a wider range of financial assets and liabilities than recorded in PSND ex, such as the assets held under the TFS, which fall outside the boundary of PSND ex.

PSNFL ex was £2,084.0 billion at the end of August 2022 (or around 82.9% of GDP), which was £343.6 billion (or 13.7 percentage points of GDP) less than PSND ex.

Table PSNFL 3, published as a part of our Public sector finances tables 1 to 10: Appendix A, provides a reconciliation between the latest measures of PSND ex and PSNFL ex.

8. Revisions

The data for the latest months of every release contain a degree of forecasts. Subsequently, these are replaced by improved forecasts, as further data are made available, and finally by outturn data.

Table 11: Revisions to public sector net borrowing
Revisions to borrowing since the previous public sector finances bulletin (published on 19 August 2022), UK
£ billion
	Financial year-to-July²			Financial year ending March 2022³
	Previous	Latest	Change	Previous	Latest	Change
Central Government	54.6	50.6	-3.9	157.3	154.4	-2.8
Local Government	-1.3	-4.0	-2.7	-3.5	-3.1	0.4
Public Corporations	0.0	-0.3	-0.3	-1.5	-1.4	0.1
Public Sector Pensions	0.3	-1.4	-1.6	0.8	-7.3	-8.1
Sub-total: Public Sector ex BoE and Banks	53.5	44.9	-8.6	153.1	142.7	-10.4
Bank of England	1.5	1.5	0.0	-9.0	-9.0	0.0
Sub-total: Public Sector ex ¹	55.0	46.4	-8.6	144.1	133.7	-10.4
Public Sector Banks	-3.1	-3.1	0.0	-9.2	-9.2	0.0
Total: Public Sector	51.9	43.4	-8.6	134.9	124.5	-10.4

Download this table Table 11: Revisions to public sector net borrowing

Annual data updates

Our regular annual updates of data for Network Rail, Pool Re, public sector funded pensions, student loans and capital consumption also take effect this month.

Of these, the updates for public sector funded pensions estimates have the most noticeable impact. Although the pensions figures have been revised from April 2020 to date, the impact on the financial year ending March 2022 is the most material, reducing public sector borrowing by £8.0 billion and increasing net debt at the end of March 2022 by £5.0 billion.

Revisions to net borrowing (PSNB ex) in the financial year-to-July 2022

Since our last public sector finances publication on 19 August 2022, we have reduced our estimate of borrowing in the financial year-to-July 2022 by £8.6 billion.

Central government accounts for the largest part of this revision and has been revised down by £3.9 billion over this period, driven by stronger than previously estimated receipts and by lower than previously estimated spending. Notable changes include:

an upwards revision to business rates of £1.3 billion, resulting from our review of their recording in the public sector finances introduced this month
a reduction in central government net investment of £1.1 billion, largely arising from our annual update of student loans data
an upwards revision to central government interest payable of £1.0 billion, in part arising from our new treatment of leases, as described in our Looking ahead -- developments in public sector finance statistics: 2022 article

Other, smaller updates account for the remaining impact on central government borrowing.

Local government borrowing accounts for around £2.7 billion of the fall in public sector net borrowing (PSNB ex) over this period. Previously, our local government data were based on the latest official forecasts published by the Office for Budget Responsibility (OBR) in their Economic and fiscal outlook -- March 2022. This month, we have included local authority budget data for England, Scotland and Wales that we have used to improve our initial estimates.

This month, we have also reduced the borrowing of the public sector (funded) pensions sub-sector by £1.6 billion, having revised our forecasts for the financial year-to-July based on our annual data update for the financial years ending March 2021 and March 2022.

Revisions to net borrowing (PSNB ex) in the financial year ending (FYE) March 2022

Since our last public sector finances publication on 19 August 2022, we have reduced our estimate of public sector borrowing in the FYE March 2022 by £10.4 billion.

This month, we have reduced central government borrowing by £2.8 billion.

We have increased our previous estimates of central government interest payable by £2.6 billion, of which £1.1 billion was because of our annual update of Network Rail data and £1.6 billion was because of our new treatment of central government leases introduced for the first time this month.

As well as increasing debt interest payable, the change to our recording of leases reduced our previous estimate of expenditure on goods and services by £1.9 billion over the same twelve-month period.

We have reduced our previous estimate of central government net investment by £3.1 billion, largely because of our annual update of student loans data.

This month, we have also reduced the borrowing of the public sector (funded) pensions sub-sector by £8.0 billion. Substantial revisions to our pensions data are not uncommon as we replace our initial estimates annually.

Tables 12 and 13 show the revisions to central government receipts and expenditure in the financial year-to-July 2022 and FYE March 2022 since our last publication.

Revisions to earlier periods are a result of our annual updates introduced this month, as explained in Section 9, and their impacts on public sector net borrowing (excluding public sector banks) are summarised in Table 14.

Table 12: Revisions to central government current receipts
Revisions to central government receipts since the previous public sector finances bulletin (published on 19 August 2022), UK
£ billion
	Financial year-to-July³			Financial year ending March 2022⁴
	Previous	Latest	Change	Previous	Latest	Change
Value Added Tax	59.4	58.5	-0.9	165.0	165.0	0.0
Fuel Duty	8.6	8.6	0.0	25.9	25.9	0.0
Alcohol Duty	4.2	4.2	-0.1	13.2	13.2	0.0
Tobacco Duty	2.9	3.0	0.1	10.2	10.2	0.0
Business Rates	8.7	9.9	1.3	22.9	22.4	-0.6
Stamp Duty (L&P)¹	6.1	6.1	0.0	15.4	15.4	0.0
Customs Duties	1.7	1.7	0.0	4.9	4.9	0.0
Other Taxes on Production	14.4	14.6	0.2	37.3	36.6	-0.7
Pay As You Earn Income Tax	65.7	66.3	0.6	192.6	192.6	0.0
Self-Assessed Income Tax	10.4	10.4	0.0	37.0	37.0	0.0
Corporation Tax	21.8	21.8	0.0	67.6	68.0	0.5
Other Taxes on Income & wealth²	-1.1	-1.2	-0.1	10.8	10.9	0.1
Other Taxes	7.1	7.4	0.3	20.5	21.2	0.7
Compulsory social contributions	58.2	58.9	0.7	160.8	160.8	0.0
Interest & Dividends receipts	7.0	7.8	0.8	14.7	14.8	0.1
Other receipts	12.8	12.1	-0.7	36.5	36.6	0.1
Total Current Receipts	287.8	290.1	2.3	835.3	835.6	0.2

Download this table Table 12: Revisions to central government current receipts

Table 13: Revisions to central government expenditure
Revisions to central government expenditure since the previous public sector finances bulletin (published on 19 August 2022), UK
£ billion
	Financial year-to-July⁹			Financial year ending March 2022¹⁰
	Previous	Latest	Change	Previous	Latest	Change
Interest payments¹	39.8	40.8	1.0	69.9	72.5	2.6
National Insurance Fund Benefits	39.4	39.2	-0.1	114.5	114.5	0.0
Social Assistance	42.6	43.0	0.4	119.6	119.6	0.0
Other Net social Benefits	1.4	1.4	0.0	1.0	1.0	0.0
Procurement² ³	62.8	62.2	-0.6	200.8	198.4	-2.4
Pay	56.0	56.4	0.5	166.1	166.1	0.1
Transfers to Local Government⁴	45.2	45.2	-0.1	132.6	132.6	0.0
Contributions to EU⁵	0.0	0.0	0.0	0.0	0.0	0.0
Current transfers paid abroad - UK payments to EU⁶	3.2	3.2	0.0	8.4	8.4	0.0
Current transfers paid abroad - Other	1.7	1.7	0.0	5.5	5.5	0.0
Subsidies - CJRS⁷	0.0	0.0	0.0	8.5	8.5	0.0
Subsidies - SEISS⁸	0.0	0.0	0.0	8.3	8.3	0.0
Subsidies - Other	8.5	8.4	-0.1	31.7	31.6	-0.1
Other Expenditure	12.7	11.9	-0.8	26.7	27.0	0.3
Total Current Expenditure	313.3	313.4	0.2	893.5	894.0	0.4
Depreciation	11.7	10.9	-0.7	31.8	31.9	0.1
Net Investment	17.4	16.3	-1.1	67.3	64.1	-3.1
Total Expenditure	342.4	340.7	-1.7	992.6	990.0	-2.6

Download this table Table 13: Revisions to central government expenditure

Revisions to public sector net debt excluding public sector banks (PSND ex)

This month, we have increased our previous estimate of the level of public sector net debt excluding public sector banks at the end of July 2022 by £28.7 billion from that published on 19 August 2022. This increase was largely the result of the new treatment of central government leases introduced for the first time this month, which added £20.7 billion to government gross debt.

The remaining £8.0 billion increase is a combination of improvements to our recording of public corporations' data, as described in Recent and upcoming changes to public sector finance statistics: August 2022,and our annual update to public sector pensions data.

Table 15 summarises the impact on public sector net debt (excluding public sector banks) of both the leases and public corporations changes introduced this month.

9. Changes to public sector finance statistics planned for September 2022

In accordance with our transparency strategy and to provide predictability to users, where possible, we aim to package together methodological changes at a single point in the year.

This section presents information on the changes outlined in our Looking ahead – developments in public sector finance statistics: 2022 article, which were implemented this month. These include improvements in the recording of:

public corporations' data
central government leases
national non-domestic rates

Our article, Recent and upcoming changes to public sector finance statistics: August 2022,explains these changes in some detail.

These methodology changes were accompanied by our regular annual data updates, including improvements to our previously published capital consumption, public sector pensions, Pool Re and student loans data.

Estimates of how our developments have affected the fiscal aggregates are presented in Tables 14 and 15, for financial years. Changes to public sector finance statistics: Appendix L provides a more detailed assessment of these impacts.

Table 14: Impact of the methodology and data changes introduced in September 2022 on the latest estimates of public sector net borrowing (excluding public sector banks), UK
£ billion (unless otherwise stated)
	New basis						Old basis
	PSNB ex¹	PSNB ex as a % of GDP²	NNDR³	CG⁴ Leases	Improvements to public corporations' data	Other data changes⁵	PSNB ex¹	PSNB ex as a % of GDP²
2011/12	121.3	7.2	0.2	-1.0	0.6	0.0	121.5	7.2
2012/13	123.9	7.1	0.6	-1.7	0.3	0.0	124.7	7.2
2013/14	102.5	5.6	0.1	-2.8	0.3	0.0	104.9	5.8
2014/15	96.9	5.1	0.4	-0.1	0.3	0.0	96.3	5.1
2015/16	81.5	4.2	0.6	0.2	0.3	0.0	80.4	4.1
2016/17	54.8	2.7	0.5	-1.6	0.2	0.0	55.7	2.7
2017/18	58.9	2.8	0.8	3.2	-0.1	0.0	55.0	2.6
2018/19	44.4	2.0	0.8	0.4	0.0	0.1	43.1	2.0
2019/20	64.3	2.8	0.6	0.1	-0.1	4.4	59.3	2.6
2020/21	314.3	14.7	1.4	-0.4	0.0	-1.8	315.1	14.7
2021/22	133.7	5.6	-0.5	-0.4	-0.1	-11.1	145.8	6.1

Download this table Table 14: Impact of the methodology and data changes introduced in September 2022 on the latest estimates of public sector net borrowing (excluding public sector banks), UK

Table 15: Impact of the methodology and data changes introduced in September 2022 on the latest estimates of public sector net debt (excluding public sector banks), UK
£ billion (unless otherwise stated)
	New basis					Old basis
	PSND ex¹	PSND ex as a % of GDP²	Central government Leases	Improvements to public corporations' data	Public sector pensions	PSND ex¹	PSND ex as a % of GDP²

2011/12	1,261.2	73.9	25.6	0.5	0.0	1,235.1	72.3
2012/13	1,366.2	77.1	23.8	0.9	0.0	1,341.5	75.7
2013/14	1,461.1	78.5	18.9	1.5	0.0	1,440.7	77.4
2014/15	1,554.2	81.0	18.8	2.3	0.0	1,533.1	79.9
2015/16	1,596.6	80.2	18.9	0.9	0.0	1,576.8	79.2
2016/17	1,711.9	82.4	17.1	0.5	0.0	1,694.3	81.6
2017/18	1,760.0	81.7	20.2	1.7	0.0	1,738.1	80.7
2018/19	1,779.1	79.5	20.6	2.1	0.0	1,756.4	78.5
2019/20	1,819.6	84.1	21.9	3.0	0.0	1,794.7	82.9
2020/21	2,162.2	95.2	21.4	2.5	1.7	2,136.6	94.0
2021/22	2,372.6	96.8	20.9	2.8	5.0	2,343.9	95.6

Download this table Table 15: Impact of the methodology and data changes introduced in September 2022 on the latest estimates of public sector net debt (excluding public sector banks), UK

10. Public sector finances data

Public sector finances tables 1 to 10: Appendix A
Dataset | Released 21 September 2022
The data underlying the public sector finances statistical bulletin are presented in the tables PSA 1 to 10.

Large impacts on public sector fiscal measures excluding banking groups: Appendix B
Dataset | Released 21 September 2022
Large events that affect current public sector net borrowing excluding public sector banks (PSNB ex), and public sector net debt excluding public sector banks (PSND ex) from the period May 2000 onwards. Impacts are shown for the components of public sector net borrowing, net cash requirement and net debt.

Public sector finances revisions analysis on main fiscal aggregates: Appendix C
Dataset | Released 21 September 2022
Revisions analysis for central government receipts, expenditure, net borrowing and net cash requirement statistics for the UK over the last five years.

Public sector current receipts: Appendix D
Dataset | Released 21 September 2022
A breakdown of UK public sector income by latest month, financial year-to-date and full financial year, with comparisons with the same period in the previous financial year.

International Monetary Fund's Government Finance Statistics framework in the public sector finances: Appendix E
Dataset | Released 21 September 2022
Presents the balance sheet, statement of operations and statement of other economic flows for the public sector, compliant with the Government Finance Statistics Manual 2014: GFSM 2014 presentation.

Revisions to the first reported estimate of public sector net borrowing: Appendix F
Dataset | Released 21 September 2022
Summarises revisions to the first estimate of UK public sector borrowing (excluding public sector banks) by sub-sector. Revisions are shown at 6 and 12 months after year end.

Changes to public sector finance statistics: Appendix L
Dataset | Released 21 September 2022
Presents the impact of the methodology and data changes introduced in September 2022 on our headline public sector measures.

11. Glossary

Public sector

In the UK, the public sector consists of six sub-sectors: central government, local government, public non-financial corporations, public sector pensions, the Bank of England (BoE) and public financial corporations (or public sector banks).

Public sector banks

Unless otherwise stated, the figures quoted in this bulletin exclude public sector banks, currently only the NatWest Group (formerly the Royal Bank of Scotland (RBS) Group).

Public sector current budget deficit

Public sector current budget deficit is the gap between current expenditure and current receipts on an accrued basis, having taken account of depreciation.

The current budget is in surplus when receipts are greater than expenditure.

Public sector current expenditure

Current expenditure measures reflect the cost of the public sector’s day-to-day activities. For example, central government’s provision of services and grants, payment of social benefits and the payment of the interest on its outstanding debt.

Public sector debt interest to revenue ratio

The debt interest to revenue ratio (DIR) represents the proportion of net interest paid (gross interest paid less interest received) by the public sector (excluding public sector banks), compared with the non-interest receipts it receives in a given period.

Public sector net borrowing

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 minus capital receipts)). PSNB is often referred to by commentators as “the deficit”.

Public sector net cash requirement

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 its activities.

The amount of cash required will be affected by changes in the timing of payments to and from the public sector rather than when these liabilities were incurred. However, it does not depend on forecast tax receipts in the same way as our accrued (or national accounts) based measures of borrowing.

PSNCR may be similar to borrowing for the same period and close, but not identical, to the changes in the level of net debt between two points in time.

Public sector net debt

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) and is often referred to by commentators as “the national debt”.

Public sector net investment

Public sector net investment is the sum of all capital spending, mainly net acquisitions of capital assets and capital grants, less the depreciation of the stock of capital assets.

Public sector net financial liabilities

Public sector net financial liabilities excluding public sector banks (PSNFL ex) is a comprehensive measure of the public sector balance sheet, capturing a wider range of financial assets and liabilities than recorded in PSND ex.

Total managed expenditure

Total managed expenditure (TME) covers all current and capital spending carried out by the public sector, including depreciation. This is equal to public sector current expenditure, plus public sector net investment, plus deprecation.

12. Measuring the data

Comparing our data with official forecasts

The independent Office for Budget Responsibility (OBR) is responsible for the production of official forecasts for the government. These forecasts are usually produced twice a year, in spring and autumn.

Table 16: Latest public sector finances estimates compared with official Office for Budget Responsibility forecasts for the financial year ending (FYE) March 2023, UK
£ billion unless otherwise stated
	Provisional estimate August 2022	OBR forecast¹ August 2022	Difference	OBR forecast¹ FYE March 2023
Net Borrowing	11.8	6.0	5.8	99.1
Net Debt	2,427.5	2,389.3	38.2	2,453.4
Net Debt % of GDP	96.6	95.5	1.1	95.5

Download this table Table 16: Latest public sector finances estimates compared with official Office for Budget Responsibility forecasts for the financial year ending (FYE) March 2023, UK

Table 17: Latest public sector finances estimates compared with official Office for Budget Responsibility forecasts for the financial year ending (FYE) March 2022, UK
£ billion unless otherwise stated
	Provisional estimate FYE March 2022	OBR forecast¹ FYE March 2022	Difference
Net Borrowing	133.7	127.8	5.9
Current budget deficit	78.6	89.5	-10.9
Net Debt	2,372.6	2,329.7	42.9
Net Debt % of GDP	96.8	95.6	1.2
Net Debt ex BoE²	2,054.1	2,010.9	43.2
Net Debt ex BoE² % of GDP	83.8	82.5	1.3

Download this table Table 17: Latest public sector finances estimates compared with official Office for Budget Responsibility forecasts for the financial year ending (FYE) March 2022, UK

Energy Bills Support Scheme

The Energy Bills Support Scheme (EBSS) is a government scheme giving households in Great Britain (with a domestic electricity contract) £400 towards the cost of their energy bills.

On 31 August 2022, the Office for National Statistics (ONS) announced that the EBSS has been classified as a current transfer payment from government to households.

This additional central government expenditure will increase public sector net borrowing over a six-month period between October 2022 and March 2023.

Energy Price Guarantee scheme

On 8 September 2022, the UK government announced a number of new plans to help manage the cost of energy prices for households and businesses across the UK. This includes an Energy Price Guarantee scheme, which will include the temporary removal of green levies on energy bills and cap household energy bills at an average £2,500 for the next two years.

We will review and classify these support measures in due course.

Energy profits levy

On 26 May 2022, the UK government announced a new levy on the profits of oil and gas companies in the UK and the UK Continental Shelf, intended to help fund cost-of-living support.

We have classified this levy as a tax on the profits of oil and gas companies operating in the UK and the UK Continental Shelf. The first payment received will be accrued back to be reported as close as possible to the commencement date of 26 May 2022.

We will implement this classification as soon as is practical.

Coronavirus (COVID-19) loan guarantee schemes

In its Economic and fiscal outlook – March 2022, the OBR estimated that a reduction on calls on the government's coronavirus loan guarantee schemes would reduce net borrowing by £4.4 billion in the financial year ending (FYE) March 2022. We will include any impact arising from a change in expected calls when sufficiently reliable data become available.

13. Strengths and limitations

To supplement this release, we publish an accompanying public sector methodological guide and Public sector finances Quality and Methodology Information outlining the strengths, limitations, and appropriate uses of the public sector finances dataset.

Local government and public corporations

In recent years, planned local government expenditure initially reported in local authority budgets has been systematically lower than final outturn current expenditure reported in the audited accounts and higher than that reported in final outturn capital expenditure. We therefore include adjustments to increase or decrease the amounts reported at the budget stage.

For the financial year ending (FYE) 2022, we include:

a £0.4 billion downward adjustment to Wales’s capital expenditure
a £3.5 billion upward adjustment to England’s current expenditure on goods and services

We apply a further £2.0 billion downward adjustment to budget forecast current expenditure on benefits in the FYE 2022, to reflect the most recently available data for housing benefits.

For the FYE 2023, we include:

a £0.8 billion downward adjustment to Scotland’s capital expenditure
a £0.4 billion downward adjustment to Wales’s capital expenditure
a £4.0 billion upward adjustment to England’s current expenditure on goods and services

We apply a further £1.8 billion downward adjustment to budget forecast current expenditure on benefits in the FYE 2023, to reflect the most recently available data for housing benefits.

Public corporations' data in the most recent periods are initial estimates, largely based on the Office for Budget Responsibility (OBR)'s Economic and fiscal outlook – March 2022, with adjustments being applied as needed.

14. Related links

HMRC tax receipts and National Insurance contributions for the UK
Dataset | Updated 21 September 2022
Summary of HM Revenue and Customs (HMRC) tax receipts, National Insurance contributions (NICs), tax credit expenditure and Child Benefit for the UK on a cash basis.

The calculation of interest payable on government gilts
Methodology | Last revised 18 July 2022
Explains the recording of interest payable to holders of UK government gilts in the UK public sector finances.

Country and regional public sector finances: financial year ending 2021
Article | Released 27 May 2022
Public sector revenue, expenditure and net fiscal balance on a country and regional basis.

Looking ahead -- developments in public sector finance statistics: 2022
Article | Released 22 February 2022
What the Office for National Statistics sees as areas for future development in the public sector finance statistics.

Wider measures of the public sector balance sheet: public sector net worth
Methodology | Last revised 22 June 2021
Outlines plans to introduce an additional statistical aggregate to the public sector finance statistics and explains how it will differ from existing measures.

Public sector finances QMI
Methodology | Last revised 6 December 2021
Quality and Methodology Information for the UK public sector finances and government deficit and debt under the Maastricht Treaty, detailing the strengths and limitations of the data, methods used, and data uses and users.

Monthly statistics on the public sector finances: a methodological guide
Methodology | Last revised 25 January 2022
This methodological guide provides comprehensive contextual and methodological information on the monthly Public sector finances (PSF) statistical bulletin, which is jointly produced by the Office for National Statistics (ONS) and HM Treasury (HMT).

15. Cite this statistical bulletin

Office for National Statistics (ONS), released 21 September 2022, ONS website, statistical bulletin, Public sector finances, UK: August 2022