1. Main points

This bulletin presents the first provisional estimate of public sector finances in the UK for the complete financial year ending March 2016 (April 2015 to March 2016); these are not final figures and may be revised over the coming months as provisional data are replaced with finalised and audited data.

Public sector net borrowing excluding public sector banks decreased by £17.7 billion to £74.0 billion in the complete financial year ending March 2016 (April 2015 to March 2016) compared with the previous financial year.

Public sector net borrowing excluding public sector banks decreased by £2.6 billion to £4.8 billion in March 2016 compared with March 2015.

Public sector net debt excluding public sector banks at the end of March 2016 was £1,594.1 billion, equivalent to 83.5% of Gross Domestic Product; an increase of £47.5 billion (or 0.2 percentage points of Gross Domestic Product) compared with March 2015.

Central government net cash requirement decreased by £26.4 billion to £58.2 billion in the complete financial year ending March 2016 (April 2015 to March 2016) compared with the previous financial year.

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2. Summary

This section provides a summary of the main messages of this statistical bulletin which some users may find helpful. Some users may also like to receive Twitter updates by following @frasermunropsf. We recently published an article titled The debt and deficit of the UK public sector explained which some users may also find useful.

Public sector borrowing (or deficit)

In March 2016, the public sector spent more money than it received in taxes and other income. This meant it had to borrow £4.8 billion to balance the books.

While it saved £1.3 billion on the cost of the “day-to-day” activities of the public sector (the current budget deficit), it spent £6.1 billion on infrastructure (net investment).

Annual borrowing has generally been falling since the peak in the financial year ending March 2010. In the first provisional estimate of the complete financial year ending March 2016 (April 2015 to March 2016), the public sector borrowed £74.0 billion. This was £17.7 billion lower than in the previous financial year.

Initial estimates suggest that borrowing in the financial year ending March 2016 is less than half of that in the financial year ending March 2010 (both in terms of £ billion and percentage of Gross Domestic Product).

The Office for Budget Responsibility, which produces economic and fiscal forecasts for government recorded that the public sector would borrow £72.2 billion during the financial year ending March 2016. So, based on the first out-turn estimate, borrowing in financial year ending March 2016 is £1.8 billion higher than OBR predicted.

Income and spending by central government

Central government’s income and spending make the largest contribution to the amount borrowed by the public sector. In the financial year ending March 2016 (April 2015 to March 2016), central government received £636.2 billion in income. This was around 4% higher than the previous financial year, largely due to receiving more income tax, national insurance contributions and taxes on production such as VAT and stamp duty, compared with the previous year.

Over the same period (April 2015 and March 2016) central government spent £686.2 billion, roughly the same as in the previous financial year. Of this amount, just below two-thirds was spent by central government departments (such as health, education and defence), around a third on social benefits (such as pensions, unemployment payments, child benefit and maternity pay) with the remaining being spent on capital investment and interest on the government’s outstanding debt.

Debt

While deficit represents the difference between income and spending at a point in time, debt represents the total amount of money owed over time. Debt has been built up by successive government administrations over many years. When the government borrows, this adds to the debt total. So reducing the deficit is not the same as reducing the debt.

The amount of money owed by the government to the private sector stood at £1.6 trillion at the end of March 2016, which equates to 84% of value of all the goods and services currently produced by the UK economy in a year (or gross domestic product - GDP).

EU government deficit and debt

On 15 April 2016, we published the latest EU Government Deficit and Debt Return which reported that:

  • general government deficit (Maastricht Borrowing) in the financial year ending 2015 (April 2014 to March 2015) was £91.1 billion, equivalent to 5.0% of GDP
  • general government gross debt (Maastricht Debt) at the end of March 2015 was £1,601.3 billion, equivalent to 87.4% of GDP

This publication reports a slightly revised Maastricht Borrowing, in the financial year ending 2015, to £90.7 billion and an unchanged Maastricht Debt at the end of March 2015 of £1,601.3 billion.

Please refer to section 7, International comparisons of borrowing and debt for further detail.

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3. Understanding this release

This statistical bulletin provides important information on the UK government financial position. It enables government, the public, economists and financial analysts 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.

We recently published an article titled The debt and deficit of the UK public sector explained which some users may also find useful.

The following tables and diagram are intended to provide users with the important terms needed to understand these data and how the statistics relate to each other.

Figure 1 illustrates how debt between periods changes as a result of transaction flows (for example expenditure and receipts) on an accrued and cash basis. The transaction flows are provided for the current financial year, (April 2015 to March 2016).

The headline measures of current budget deficit, net borrowing, net cash requirement and net debt are highlighted in the diagram as they provide the important indicators for the performance of the UK public finances.

When expenditure is greater than income, the public sector runs a deficit, known as the current budget deficit. Net borrowing is made up of the current budget deficit plus net investment (spending on capital less capital receipts). The diagram shows how net borrowing contributes to the change in net debt.

The net cash requirement is closely related to net debt (the amount owed). It is important because it represents the cash needed to be raised from the financial markets to service the government’s borrowing deficit. Changes in net debt between 2 points in time are normally similar to the net cash requirement for the intervening period, though the relationship is not an exact one.

This release presents the first estimate of March 2016 public sector finances and the first provisional estimate of the complete financial year ending April 2016 (April 2015 to March 2016); these are not final figures and may be revised as provisional data are replaced with finalised and audited data.

Table 2 summarises the latest headline public sector finances measures, comparing the latest month and cumulative totals for the financial year, with the equivalent period in the financial previous year.

Time series for each component are available in Table PSA1 in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

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4. Summary of latest public sector net borrowing position

In the UK, the public sector consists of 5 sub-sectors: central government, local government, public non-financial corporations, Bank of England and public financial corporations (that is, public sector banks).

Table 3 summarises the current monthly and full financial year borrowing position of each of these sub-sectors along with the public sector aggregates. Full time series for these data can be found in Table PSA2 in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

While public sector finance data are available on a monthly basis, due to the volatility of the monthly time series, it is often more informative to look at the financial year-to-date or complete financial year data in order to discern underlying patterns. Estimates are revised over time as additional data becomes available.

Figure 2 illustrates public sector net borrowing excluding public sector banks (PSNB ex) for the last 22 financial years. For all but 3 years in the period the public sector has been in deficit and had to borrow to fund the gap between expenditure and revenue.

PSNB ex peaked in the financial year ending 2010 (April 2009 to March 2010) as the effects of the economic downturn impacted on the public finances (reducing tax receipts while expenditure continued to increase). PSNB ex has reduced since then, although remained higher than before the financial year ending 2008 (April 2007 to March 2008) and the 2007 global financial market shock.

PSNB ex in the financial year ending 2013 (April 2012 to March 2013) was higher than in the previous financial year largely as a result of the recording of an £8.9 billion payable capital transfer in April 2012, as recognition that the liabilities transferred from the Royal Mail Pension Plan exceeded the assets transferred.

Net borrowing for the financial year ending March 2016

This bulletin presents the first provisional estimate of the complete financial year ending March 2016 (April 2015 to March 2016); these are not final figures and may be revised as provisional data are replaced with finalised and audited data.

In the financial year ending March 2016 (April 2015 to March 2016), public sector net borrowing excluding banking groups (PSNB ex) was £74.0 billion; a decrease of £17.7 billion, or 19.3% compared with the previous financial year.

This decrease in net borrowing was predominantly due to a decrease of £20.4 billion in central government net borrowing, partially offset by an increase in local government net borrowing of £4.0 billion.

Over the same period, Bank of England (BoE) net borrowing was £1.5 billion lower than in the previous financial year, almost entirely due to Asset Purchase Facility (APF) transfers to central government. The combined net borrowing of central government and the BoE in the financial year ending March 2016 (April 2015 to March 2016) was £21.9 billion lower than in the previous financial year.

Central government receipts for the financial year ending March 2016 (April 2015 to March 2016) were £636.2 billion, an increase of £21.9 billion, or 3.6%, compared with the previous financial year. Of which:

  • income tax-related payments increased by £7.4 billion, or 4.3%, to £176.5 billion
  • VAT receipts increased by £5.5 billion, or 4.4%, to £130.3 billion
  • social (national insurance) contributions increased by £4.5 billion, or 4.1%, to £114.7 billion
  • corporation tax increased by £1.3 billion, or 3.1%, to £44.3 billion
  • interest & dividends decreased by £1.6 billion, or 8.2%, to £17.5 billion

Central government expenditure (current and capital) for the financial year ending March 2016 (April 2015 to March 2016) was £686.2 billion, an increase of £1.1 billion, or 0.2%, compared with the previous financial year. Of which:

  • net social benefits (mainly pension payments) increased by £1.7 billion, or 0.8%, to £203.4 billion; largely as a result of increases in state pension payments (within National Insurance Fund benefits) and public sector pension payments, being partially offset by a rise in public sector pension contributions
  • other current expenditure (mainly departmental spending) increased by £0.4 billion, or 0.1%, to £403.3 billion; largely as a result of increases in departmental spending on goods & services, being almost entirely offset by decreases in transfers to local government
  • debt interest decreased by £0.1 billion, or 0.3%, to £45.1 billion; of this £45.1 billion, £13.6 billion is the interest payable to the Bank of England Asset Purchase Facility on its gilt holdings (see Table PSA9 in the Public Sector Finances Tables 1 to 10: Appendix A dataset) which are PSNB ex neutral
  • central government net investment (capital expenditure) decreased by £0.9 billion, or 2.5%, to £34.5 billion; largely as a result of decreases in transfers to central government from other sectors, being partially offset by gross capital formation and transfers from central government to other sectors

Local government net borrowing (LGNB) for the financial year ending March 2016 (April 2015 to March 2016) was estimated to be £5.9 billion, an increase of £4.0 billion on the same period in the previous financial year. This increase was mainly due to decreases in grants received from central government, particularly in April, being partially offset by decreases in expenditure on goods & services.

Local government data for the current financial year are provisional estimates mainly based on budget figures received from the Department for Communities and Local Government (DCLG) and the devolved administrations, while estimates for the previous financial year-to-date are largely based on final outturn figures.

Public corporations’ net borrowing (PCNB) for the financial year ending March 2016 (April 2015 to March 2016) was estimated to be £2.9 billion, an increase of £0.2 billion on the same period in the previous financial year.

Public corporation data for the current financial year are mainly provisional estimates.

Net borrowing in March 2016

In March 2016, public sector net borrowing excluding public sector banks (PSNB ex) was £4.8 billion; a decrease of £2.6 billion, or 35.4% compared with March 2015. This decrease in borrowing was largely due to a decrease in central government borrowing of £3.4 billion being partially offset by a £0.9 billion increase in local government net borrowing.

Central government receipts in March 2016 were £55.6 billion, an increase of £2.8 billion, or 5.4% compared with March 2015. Of this:

  • income tax-related payments increased by £0.8 billion, or 5.3%, to £16.3 billion
  • social (national insurance) contributions increased by £0.7 billion, or 5.6%, to £12.2 billion
  • VAT receipts increased by £0.5 billion, or 5.2%, to £10.7 billion
  • corporation tax decreased by £0.1 billion, or 5.3%, to £1.9 billion

Central government expenditure (current and capital) in March 2016 was £58.1 billion, a decrease of £0.6 billion, or 1.0%, compared with March 2015. Of this:

  • other current expenditure (mainly departmental spending) increased by £0.3 billion, or 0.9%, to £35.2 billion; largely as a result of a increases in departmental spending on goods & services, being partially offset by a decrease in current grants to local government
  • debt interest increased by £0.2 billion, or 17.6%, to £1.0 billion; of this £1.0 billion, £1.0 billion is the net interest paid to the Asset Purchase Facility Fund (APF) on its gilt holdings (see Table PSA9 in the Public Sector Finances Tables 1 to 10: Appendix A dataset) which are PSNB ex neutral
  • net social benefits (mainly pension payments) decreased by £0.1 billion, or 0.5%, to £16.5 billion; largely as a result of increases in public sector pension contributions (treated as negative expenditure in public sector finances) and a decrease in social assistance payments, largely offset by increases in state pension payments (within National Insurance Fund benefits) and public sector pension payments
  • central government net investment (capital expenditure) decreased by £1.0 billion, or 15.5%, to £5.3 billion; largely as a result of decreases in gross capital formation and capital transfers from central government to other sectors

Detailed time series for each of the expenditure and revenue component series of central government net borrowing are presented in Tables PSA6B to 6F in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

In March 2016, local government net borrowing (LGNB) was estimated at £1.7 billion; an increase of £0.9 billion compared with March 2015, mainly due to a decrease in current grants from central government.

Local government data for March 2016 are provisional estimates mainly based on budget figures received from the Department for Communities and Local Government (DCLG) and the devolved administrations, while estimates for March 2015 are largely based on final outturn figures.

Detailed time series for each of the expenditure and revenue component series of local government net borrowing are presented in Tables PSA6G to 6K in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

In March 2016, it was estimated that public corporations’ net borrowing (PCNB) was negligible, a decrease of £0.2 billion compared with March 2015.

Public corporation data for March 2016 are mainly provisional estimates.

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5. Summary of latest public sector net debt position

Public sector net debt excluding public sector banks (PSND ex) represents the amount of money the public sector owes to UK private sector organisations and overseas institutions, largely as a result of government financial liabilities on the bonds (gilts) and Treasury bills it has issued.

While deficit represents the difference between income and spending over a period of time, debt represents the total amount of money owed at a point in time. This debt has been built up by successive government administrations over many years. When the government borrows (that is, runs a deficit), this adds to the debt total. So reducing the deficit is not the same as reducing the debt.

At the end of March 2016, PSND ex stood at £1,594.1 billion; an increase of £47.5 billion compared with March 2015. This increase in net debt is a result of:

  • £74.0 billion of public sector net borrowing
  • less £1.0 billion in timing differences between cash flows for gilt interest payments and the accrued gilt interest flows
  • less £25.5 billion in net cash transactions related to acquisition or disposal of financial assets of equivalent value (for example loans) and timing of recording

Figure 3 illustrates public sector net debt excluding banking groups (PSND ex) from the financial year ending March 1994 to date.

The increases in debt between the financial year ending 2009 (April 2008 to March 2009) and the financial year ending 2011 (April 2010 to March 2011) were larger than in the early part of the decade, as the economic downturn meant public sector net borrowing excluding public sector banks (PSNB ex) increased. Since then it has continued to increase but at a slower rate.

For the purposes of UK fiscal policy, net debt is defined as total gross financial liabilities less liquid financial assets, where liquid assets are cash and short-term assets which can be released for cash at short notice and without significant loss. These liquid assets mainly comprise foreign exchange reserves and bank deposits.

Figure 4 presents public sector debt excluding public sector banks at the end of March 2016 by sub-sector. Time series for each of these component series are presented in Tables PSA8A to D in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

Changes in net debt between 2 points in time are normally similar to the net cash requirement for the intervening period, though 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 (or face) value, but they are often issued at a different price due to premia or discounts 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.

Net cash requirement is discussed further in Section 8 of this bulletin.

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6. Net borrowing and debt statistics compared with OBR forecast

The Office for Budget Responsibility (OBR) normally produces forecasts of the public finances twice a year (normally in March and December). The latest OBR forecast was published on 16 March 2016.

Figure 5 and Table 4 enable users to compare emerging data against the OBR forecasts. Caution should be taken when comparing public finance data with OBR figures for the full financial year, as data are not finalised until after the financial year ends. Initial estimates soon after the end of the financial year can be subject to sizeable revisions in later months. In addition, in-year timing effects on spending and receipts can affect year-to-date comparisons with previous years.

There can also be some methodological differences between OBR forecasts and outturn data. In its latest publication, OBR published a table within their Economic and fiscal outlook supplementary fiscal tables – March 2016 titled “Table: 2.45 Items included in OBR forecasts that ONS have not yet included in outturn”.

Figure 5 illustrates the public sector net borrowing excluding public sector banks (PSNB ex) for the financial year ending March 2015 (April 2014 to March 2015), along with the first provisional estimate of the complete financial year ending March 2016 (April 2015 to March 2016); these are not final figures and may be revised as provisional data are replaced with finalised and audited data.

First estimates suggest that in the financial year ending March 2016 (April 2015 to March 2016), borrowing fell by £17.7 billion to £74.0 billion compared with the previous financial year. By comparison, the OBR forecast for the financial year ending 2016 (April 2015 to March 2016) is £72.2 billion which is £1.8 billion below the provisional outturn.

Table 4 presents the first provisional estimate of the main public sector fiscal aggregates for the complete financial year ending March 2016 (April 2015 to March 2016) along with the corresponding OBR forecast (published in March 2016). It is important to note that these first ONS estimates are not final figures and may be revised as provisional data are replaced with finalised and audited data.

Most of the £1.8 billion difference between the OBR public sector net borrowing forecast and the provisional outturn relates to local government net borrowing. In Table 2.38 (General government transactions by economic category) of the Economic and fiscal outlook supplementary fiscal tables - March 2016, OBR forecast that in the financial year ending March 2016 local government net borrowing will be £3.8 billion, while the latest provisional outturn puts the local government net borrowing at £5.9 billion, a difference of £2.1 billion.

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. The OBR provides this commentary to help users interpret the differences between the latest outturn data and the OBR forecasts by providing contextual information about assumptions made during the OBR’s forecasting process.

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7. International comparisons of borrowing and debt

The EU Government Deficit and Debt statistical bulletin is published quarterly (in January, April, July and November each year), to coincide with when the UK and other European Union member states are required to report on their deficit (or net borrowing) and debt to the European Commission.

On 15 April 2016, we published the latest EU Government Deficit and Debt Return. The data used to produce the 15 April 2016 publication are consistent with those used in the production of the public sector finances statistical bulletin published on 22 March 2016.

In the publication of 15 April 2016 we reported that:

  • general government deficit (Maastricht Borrowing) in the financial year ending 2015 (April 2014 to March 2015) was £91.1 billion, equivalent to 5.0% of GDP; a decrease of £12.2 billion compared with the financial year ending March 2014
  • general government gross debt (Maastricht Debt) at the end of March 2015 was £1,601.3 billion, equivalent to 87.4% of GDP; an increase of £79.9 billion compared with the end of the financial year ending March 2014

We also reported first estimates for calendar year 2015:

  • general government deficit in 2015 was estimated to be £82.2 billion
  • general government gross debt at the end of 2015 to be £1,663.0 billion

The latest public sector finances data in this bulletin report that:

  • general government net borrowing in the financial year ending 2015 (April 2014 to March 2015) was £90.7 billion, equivalent to 5.0% of GDP; a downward revision of £0.4 billion since last month’s bulletin
  • general government gross debt at the end of March 2015 was £1,601.3 billion, equivalent to 87.4% of GDP; unchanged since last month’s bulletin

Although the revisions to data for the financial year ending March 2015 are relatively small, there have been much larger revisions to the deficit estimates for calendar year 2015, which in large part reflect the provisional nature of data for the financial year ending March 2016.

The latest data in this bulletin report that the general government net borrowing (or deficit) in 2015 was £79.6 billion; a downward revision of £2.6 billion since last month’s bulletin estimate of £82.2 billion.

Of this, approximately, £1.2 billion reflects a re-profiling of expenditure within the financial year ending March 2016 and the remaining £1.4 billion reflects updated revenue and expenditure data that have been received.

The estimate for general government gross debt at the end of 2015 remains unchanged at £1,663 billion.

Eurostat published on 21 April 2016 a government debt and deficit comparison from the information collated across its 28 member states.

It is important to note that the GDP measure used as the denominator in the calculation of the debt ratios in the EU Government Deficit and Debt Return differs from that used within the public sector finances statistical bulletin.

An article, the use of GDP in fiscal ratio statistics, explains that for debt figures reported in the monthly public sector finances, a 12 month GDP total centred on the month is employed, while in the EU Government Deficit and Debt Return the total GDP for the preceding 12 months is used.

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8. Public sector net cash requirement

Net cash requirement is a measure of how much cash the government needs to borrow (or lend) to balance its accounts. In very broad terms, net cash requirement equates to the change in the level of debt.

Central government net cash requirement is reconciled against the change in central government net debt in Table REC3 in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

The public sector net cash requirement excluding public sector banks (PSNCR ex) follows a similar trend to that of public sector net borrowing: peaking in the financial year ending 2010, though in recent years transfers from the Asset Purchase Facility have had a substantial impact on PSNCR ex but are PSNB ex neutral.

Public sector net cash requirement excluding public sector banks (PSNCR ex) in the financial year ending March 2016 (April 2015 to March 2016) was £50.3 billion; £26.0 billion, or 34.0% lower than the previous financial year.

Figure 6 presents public sector cash requirement by sub-sector for the current financial year, (April 2015 to March 2016). Time series for each of these component series are presented in Table PSA7A in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

Central government net cash requirement (CGNCR) 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.

CGNCR was £17.6 billion in March 2016; a decrease in CGNCR of £2.7 billion, or 13.4% compared with March 2015.

In the current financial year (April 2015 to March 2016), CGNCR was £58.2 billion; a decrease of £26.4 billion, or 31.2%, compared with the previous financial year.

Cash transfers from the Asset Purchase Facility (APF) were £2.2 billion lower in the current financial year (April 2015 to March 2016), than the previous financial year. Without the impact of these transfers, CGNCR would have been £28.6 billion lower in the current financial year (April 2015 to March 2016) than the previous financial year.

Recent events impacting on CGNCR

In the financial year ending 2016 (April 2015 to March 2016) the following events reduced the CGNCR:

  • the transfers between the Bank of England Asset Purchase Facility Fund (BEAPFF) and central government
  • the sale of shares in Lloyds Banking Group
  • the sale of shares in Eurostar
  • the sale of shares in Royal Mail
  • the sale of shares in Royal Bank of Scotland
  • the sale of UKAR assets
  • the re-imbursement of support payments made to Ice Save

In the financial year ending 2015 (April 2014 to March 2015) the following events reduced the CGNCR:

  • the transfers between the BEAPFF and central government
  • the sale of shares in Lloyds Banking Group

In the financial year ending 2014 (April 2013 to March 2014) the following events reduced the CGNCR:

  • the transfers between the BEAPFF and central government
  • the sale of shares in Lloyds Banking Group
  • the sale of shares in Royal Mail

In the financial year ending 2013 (April 2012 to March 2013) the following events reduced the CGNCR:

  • the transfers between the BEAPFF and central government
  • the Royal Mail Pension Plan transfer and subsequent sale of assets
  • the transfer of the Special Liquidity Scheme final profits between BoE and central government
  • the 4G Spectrum sale

Public sector net cash requirement

Although the central government net cash requirement is the largest part of the public sector net cash requirement excluding public sector banks (PSNCR ex), 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.

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9. Central government receipts and expenditure

Current receipts

The government receives income mainly from taxes but also from national insurance contributions, interest & dividends, fines and rent.

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.

In both January and July (to a lesser extent) 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 primarily affecting January and July receipts, also tends to lead to high receipts in the following month (March and November respectively), although to a lesser degree.

Pay as you earn (PAYE) tends to vary little throughout the financial year on a monthly basis (excluding bonus months).

In recent years transfers from both the Bank of England Asset Purchase Facility Fund (BEAPFF) and the Special Liquidity Scheme (SLS) have boosted central government receipts. Though these transfers to central government have no impact on public sector borrowing due to the central government receipts being offset by the payments from the Bank of England.

Current expenditure

Current expenditure is the government’s spending on activities such as: social benefits (mainly pension payments), interest payments and other current expenditure including government departmental spending (excluding spending on capital assets).

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 movements in the Retail Prices Index. Excluding debt interest makes this statistic less volatile.

There is however one regular peak in net social benefits, which are higher in November than in other months due to the annual payment of the winter fuel allowance.

Year on year growth in net social benefits is affected by the up-rating of benefits to compensate for inflation based on the Consumer Prices Index (CPI). For recent years these are 5.2% for the financial year ending 2013, 2.2% in the financial year ending 2014, 2.7% in the financial year ending 2015 and 1.2% in the financial year ending 2016. However, for State Pensions there is a “triple guarantee” that means that they are up-rated by the highest of the CPI, increases in earnings or 2.5%. Also since the financial year ending 2014 (April 2013 to March 2014), the up-rating only applies to benefits received by disabled people and pensioners – benefits for people of working age have only been increased by 1% in these 3 years.

It can be difficult to compare the profile of monthly central government expenditure even when excluding both debt interest and net social benefits. Since the financial year ending 2014, there have been continuous changes to the profile of central government grants to local government and a number of changes to central government funding for local authorities (in particular the timing of grants).

In the latest financial year (ending 2016), the Revenue Support Grant, the main general grant paid to local authorities has been paid with a third of the total in April and the remainder in equal instalments in all the other months, whereas last year more than half of it was paid in April 2014 with the bulk of the remaining balance paid in February and March 2015. This means that for this financial year, other current expenditure growth in April 2015 and February and March 2016 will be lower while year on year growth in other months will generally be higher.

Current budget deficit

The gap between current expenditure and current receipts (having taken account of depreciation) is referred to as the current budget. When current expenditure is greater than current receipts (income), the public sector runs a current budget deficit.

In March 2016, the central government current budget deficit was in surplus by £1.3 billion, a decrease in the deficit of £2.4 billion, or 217.4% compared with March 2015.

In the current financial year (April 2015 to March 2016), the central government current budget deficit was £34.0 billion, a decrease of £19.5 billion, or 36.5% compared with the previous financial year.

Figure 7 illustrates that the central government current budget deficit (as a percentage of GDP) has reduced since the financial year ending 2010 (April 2009 to March 2010), but is still larger than before the global financial shock.

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 2 months with the highest receipts.

Net investment

Net investment represents the government’s spending on capital assets, like infrastructure projects, property and IT equipment, both as grants and by public sector bodies themselves minus capital receipts from the sale of capital assets.

In the current financial year (April 2015 to March 2016), central government’s net investment was £34.5 billion, this represents a decrease of £0.9 billion, or 2.5%, on the same period in the previous year and is largely due to a fall in capital transfers to the private sector.

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 3 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 (that is conceding a debt will not be repaid).

The sum of net investment (spending on capital less capital receipts) and the current budget deficit constitute net borrowing.

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10. Recent events and methodological changes

`###Classification decisions

Each quarter we publish a Forward Workplan outlining the classification assessments we expect to undertake over the coming 12 months. To supplement this, each month a Classifications Update is published which announces classification decisions made and includes expected implementation points (for different statistics) where possible.

Classification decisions are reflected in the public sector finances at the first available opportunity and where necessary outlined in this section of the statistical bulletin.

Housing associations

The reclassification of English private registered providers of social housing (referred to in this bulletin as housing associations) from the private to the public corporation sector was reflected in public sector finances for the first time in the January 2016 statistical bulletin. This reclassification, announced on 30 October 2015, affects over 1,500 bodies providing social housing and applies back to July 2008 when the controls in the Housing and Regeneration Act 2008 came into force.

It is important to realise that current estimates of the impact of the reclassification of housing associations are preliminary estimates which may be updated when new data become available or methodological improvements are made. At present, we are actively seeking alternative data sources to investigate the impact of smaller providers on net borrowing, net cash requirement and net debt.

We are also doing further work to test the assumptions that have been made in compiling the estimates. These were:

  • all housing association debt is assumed to be held by the private sector - the Quarterly Survey of Private Registered Providers for March 2015 showed that banks, building societies and capital markets contributed 99% to agreed sources of funding
  • the Global Accounts are collected for the entire financial year - monthly transactions were estimated by dividing the financial year figure by 12
  • providers which own less than 250 properties (less than 2% of the total stock) are assumed to have no net debt and not be investing in new properties
  • providers owning or managing between 250 and 1,000 properties are assumed to have the same gross debt per 1,000 properties as those owning or managing between 1,000 and 2,500 homes
  • the relative impact of small providers on the accounts is assumed to be constant between financial year ending 2009 and financial year ending 2015

Please note that the reclassification is being introduced in Public Sector Finances before implementation in the Quarterly National Accounts and Blue Book publications. Any work to improve the methods and data sources used in these estimates will be reflected in the National Accounts publications at the time the reclassification is implemented.

March 2016 Budget

The UK government published its latest fiscal plans on 16 March 2016 and alongside this the Office for Budget Responsibility (OBR) published its economic and fiscal outlook. We will consider the impact on public sector finances of any future policy changes announced in the Budget and report on these in due course.

Bank Corporation Tax surcharge

In July 2015, HM Revenue and Customs (HMRC) published details of a surcharge to be levied on profits of banking companies in accounting periods beginning on or after 1 January 2016.

The measure imposes a surcharge of 8% on the profits of banking companies. The profits will be calculated and reported on the same basis as for corporation tax, but with some reliefs added back.

Share sales

In recent years the government has entered a program of selling shares in publicly owned organisations. For most share sales, the proceeds will 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.

This section outlines the recent central government share sale programme.

Lloyds Banking Group

On 17 September 2013, the UK government began selling part of its share holdings in Lloyds Banking Group (LBG). A further share sale on 23 and 24 March 2014 meant that the UK government surrendered in total a 13.5% stake in the institution, a quantity sufficient to lead to LBG being re-classified from a public sector body to a private sector body.

Based on the currently available information, we have recorded no LBG share sales in March 2016, though this may be revised at a later date.

Since December 2014, the government has continued reducing its shareholding in LBG via a pre-arranged trading plan, raising an estimated total of £16.2 billion to date.

In January 2016, the government announced that it would extend Lloyds’ trading plan for a further 6 months (ending no later than 30 June 2016). It stated that the current trading plan has reduced the government’s remaining stake in Lloyds to around 9%.

Royal Bank of Scotland

In August 2015, the government announced the sale of approximately 5.4% of its shareholding in Royal Bank of Scotland. The £2.1 billion raised from this sale reduced central government net cash requirement and net debt in August 2015 by a corresponding amount.

Royal Mail

In June 2015, the government announced the sale of half of its retained shareholding in Royal Mail. The £750 million raised from this sale of a 15% stake reduced central government net cash requirement and net debt in June 2015 by a corresponding amount.

Eurostar

In March 2015, the government announced the sale of its 40% stake in the cross-Channel train operator Eurostar. The £757 million raised from this sale reduced central government net cash requirement and net debt in May 2015 by a corresponding amount.

Bank of England Asset Purchase Facility Fund (APF)

The APF currently holds government securities (gilts) on which it earns interest and it pays interest on the reserves created by the Bank of England to finance it. These flows are reflected in PSNB ex as they enter and leave the APF. The net liabilities of the APF increase PSND ex.

On 9 November 2012, the Chancellor announced an agreement with the Bank of England to transfer the excess cash in the APF to the Exchequer. These flows are internal to the public sector and so do not affect PSNB ex.

Note this treatment follows the conclusion of the 2013 PSF Review consultation.

In March 2016, there were no transfers from the Bank of England Asset Purchase Facility Fund (BEAPFF) to HM Treasury. The amount transferred in the current financial year (April 2015 to March 2016) was £8.5 billion; £2.2 billion less than the previous financial year (April 2014 to March 2015).

The next expected APF transfer will occur in April 2016.

The Bank of England entrepreneurial income for the financial year ending 2015 (April 2014 to March 2015) was calculated as £12.5 billion. This is the total amount of dividend transfers that can impact on central government net borrowing in the financial year ending 2016 (April 2015 to March 2016).

Between April 2012 and March 2013, there were £11.3 billion of transfers from the BEAPFF to HM Treasury, while in the same period in financial year ending 2014 and 2015 the transfers were £31.1 billion and £10.7 billion respectively.

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 Table PSA9 in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

Grants to local government

The Revenue Support Grant (RSG) is the main revenue funding grant paid by central government to local government in England.

In the financial year ending 2015 (April 2014 to March 2015), more than half of the RSG was paid in April, with the remaining balance paid in February and March 2015. The payment profile has changed for the financial year ending 2016 (April 2015 to March 2016), with one-third of the grant paid in April 2016 and the rest expected to be paid evenly through the year.

This change in profile explains almost all of the fall in central government current transfers to local government and central government other current spending in April 2015 compared with April last year. The impact of this change is offset in local government net borrowing.

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11. How early estimates of the components of net borrowing are improved over time

This bulletin contains the first estimate of public sector borrowing for the financial year ending 2016 (April 2015 to March 2016). This is likely to be revised in later months as more data become available.

In publishing monthly estimates, it is necessary that a range of different types of data sources are used. This section describes the regular timetable for updating initial estimates of public sector net borrowing to incorporate provisional and then final outturn data and the implications that has for data revisions.

Latest month

Central government

Departmental expenditure data are in-year outturns for the most recent month and in some cases data are based on budget estimates (forecasts). Adjustments are made to these forecasts for some departments to account for likely under or over spending. The income data are again a mixture of in-year outturn data and forecasts.

Local government

While some income data are available monthly, the majority of expenditure and income data are based on previously forecasted levels from the most recent quarter.

Local authorities publish their budget data towards the beginning of each financial year. The first estimates for the latest financial year are based on these budget data (divided by 12 to convert to months). There are adjustments in main categories of spending to account for likely under-or over-spending. The adjustments are based on what happened in previous years.

Public corporations

All data for public corporations for the latest month are based on our forecasts.

Earlier months

Central government

For the 2 to 3 months prior to latest month a mixture of in-year outturn data and budget estimates (forecasts) are used.

Local government

Quarterly local government data are available for England for some areas of spending, namely capital payments and receipts, and revenue expenditure. These data are taken into account in the public sector finance statistics around 3 to 4 months after the end of the quarter. Where quarterly data are not available, the budget data continue to be used.

Local authorities in Scotland and England provide provisional outturn data in the spring/summer for the preceding full financial year. These data will be reflected in the public sector finances in either the June or September statistical bulletin (depending on exactly when the provisional outturn data are published).

After this, we receive final outturn data for Welsh local authorities in October and English local authorities in November, covering the preceding full financial year. These data will be reflected in the public sector finances in the December statistical bulletin.

We retain our estimates of local authority spending in Northern Ireland until being supplied with final outturn data, usually in January, for the preceding full financial year.

Public corporations

We conduct a quarterly survey of the 4 largest public corporations. These figures are used around 3 to 4 months after the end of the quarter. Data for the remaining public corporations are based on our estimates until we receive provisional unaudited data from the HMT Whole of Government Accounts. These data tend to be reflected in the public sector finances in the December statistical bulletin.

English private registered providers of social housing (referred to in this bulletin as housing associations) are public corporations. Data used to estimate their net borrowing and net debt are based on the OBR forecast until outturn data are published around a year after the end of the preceding financial year.

Every local authority in England, Scotland, and Wales that still owns and manages council houses is required to keep a ring-fenced account for housing services. This is called its Housing Revenue Account (HRA). All Housing Revenue Accounts are treated as a single public corporation, but the source data are supplied according to the local government data timetable.

Audited accounts

Each government department, local authority and public corporation produces a set of final, audited accounts that have been officially examined to check that they are accurate.

The publication of these accounts broadly follows the timetable outlined in Table 5.

Even after all audited data for the public sector are available; there may still be revisions to reflect, for example, the implementation of classification decisions and other methodological changes.

Assessing the end year position

The implication is that the earliest estimates of outturn for the financial year ending 2016 (April 2015 to March 2016) will be subject to revision as revised data are provided to us by data suppliers.

The Table 6 summaries revisions to the first estimate of PSNB ex for the last 6 financial years and shows both upwards and downwards revisions.

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12. Revisions since previous 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.

The Public Sector Finances Revision Policy provides information of when users of the statistics published in the public sector finances and Government Deficit and Debt under the Maastricht Treaty statistical bulletins should expect to see methodological and data related revisions.

More detail of the methodology and sources employed can be found in the Public Sector Finances Methodological Guide.

Revisions tend to be the result of both updated data sources and methodology changes. This month the reported revisions are solely the result of updated data sources.

Table 7 summarises revisions between the data contained in this bulletin and the previous publication.

Public sector net borrowing (excluding public sector banks)

Public sector net borrowing (excluding public sector banks) in the current financial year-to-date (April 2015 to February 2016) was revised downwards by £1.5 billion. Of this; central government net borrowing was revised downwards by £1.1 billion and local government net borrowing was revised downwards by £0.4 billion.

While revisions to central government net borrowing are limited to the current financial year, quality assurance of our estimates of capital grants to local government from the private sector has resulted in revisions to our local government borrowing estimates over the previous 5 financial years of between +£0.1 billion and -£0.4 billion.

Central government borrowing

Over the current financial year-to-date, central government net borrowing (CGNB) has been revised down by £1.1 billion.

Current receipts were revised up by £0.1 billion; taxes on production were revised up by £0.7 billion (of which VAT receipts were revised upward by £0.3 billion), while taxes on income & wealth and social (national insurance) contributions were revised downward by £0.4 billion and £0.2 billion respectively.

Current expenditure was revised down by £0.5 billion, with interest and “other current expenditure” reducing by £0.3 billion and £0.2 billion respectively.

The £0.1 billion increase in current receipts combined with the £0.5 billion reduction in the estimate of current expenditure led to a £0.7 billion decrease to the central government current budget deficit estimate.

Capital spending (net investment) was revised down by £0.4 billion, with estimates of gross capital formation and capital transfers from central government to the private sector reducing by £0.2 billion and £0.1 billion respectively.

This decrease in the current account combined with a downward revision to the estimate of capital spending has resulted in a £1.1 billion decrease to the estimate of net borrowing in the current financial year-to-date.

Local government borrowing

Over the current financial year-to-date, local government net borrowing (LGNB) has been revised down by £0.4 billion; almost entirely reflecting the quality assurance of our estimates of capital grants to local government from the private sector.

Public sector net debt (excluding public sector banks)

Public sector net debt (excluding public sector banks) (PSND ex) at the end of February 2016 has been revised down by £0.3 billion.

Updated Network Rail data increased central government gross debt by £0.7 billion, while the inclusion of the latest OBR forecast data has led to a decrease of £0.7 billion in the estimate of the gross debt of housing associations. This £0.1 billion increase to the estimation of gross debt, combined with a £0.4 billion increase to liquid assets has led to the estimate of outstanding public sector net debt at the end of February 2016 reducing by £0.3 billion.

Public sector net cash requirement (excluding public sector banks)

Public sector net cash requirement (excluding public sector banks) (PSNCR ex) has been revised downward by £1.2 billion in the financial year-to-date (April 2015 to February 2016). Of this £1.2 billion; estimates of local government net cash requirement supplied by DCLG were revised down by £0.5 billion and the inclusion of the latest OBR forecast data has led to a decrease of £0.7 billion in the estimate of the net cash requirement of housing associations.

To provide users with an insight into the drivers of the historical revisions between publications, this bulletin presents 3 revisions tables:

  • Table PSA1R complements PSA1 and provides a revisions summary (between the current and previous publication) to headline statistics in this release
  • Table PSA2R complements PSA2 and provides the revisions (between the current and previous publication) to net borrowing by sector
  • Table PSA6R complements PSA6B and provides the revisions (between the current and previous publication) to the components of central government net borrowing

Tables PSA1R and PSA6R are published in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

In addition, the Revisions analysis for Public Sector Finances: Appendix C dataset presents a statistical analysis on several main components of the central government account (current receipts, current expenditure, net borrowing and net cash requirement) to determine whether their average revisions are statistically significant.

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13. New for the bulletin

Recent public sector finance articles

We are currently in the process of updating public sector finance guidance and methodology articles published on our website. Recently we have updated articles covering:

The reconciliation of net cash requirement to debt

The issues and subsequent revisions to CGNCR reported in November 2014 were identified through work undertaken to reconcile the 3 different fiscal measures (that is, net cash requirement, net borrowing and net debt) and to reconcile the central government net cash requirement with cash reported in audited resource accounts.

We are currently building these reconciliation processes into the monthly production systems. The first of these new reconciliations, Table REC3 in the Public Sector Finances Tables 1 to 10: Appendix A dataset, attempts to reconcile central government net cash requirement and net debt.

Table REC3 is not currently designated a National Statistic and should be considered as a work-in-progress, with plans to introduce further refinements in the coming months.

UK Statistics Authority assessment of public sector finances

Alongside monitoring the production and publication of official statistics, the UK Statistics Authority's statutory function is to prepare, adopt and publish a Code of Practice for Statistics (in consultation with others as appropriate), setting out the standards that the Statistics Authority expects official statistics to meet. The Statistics Authority also determines whether official statistics comply with the Code and, if so, designates them with the quality mark “National Statistics”. The process of determining compliance with the Code and designation as National Statistics is known as “Assessment”.

On 8 November 2015, the UK Statistics Authority published its latest assessment report of public sector finances. The report confirmed the National Statistics status of the public sector finances bulletin subject to certain requirements being met.

We value your feedback

The public sector finances can be complex. To ensure these important statistics are accessible to all, we welcome your feedback on how best to explain concepts and trends in these data. Please contact us at: public.sector.accounts@ons.gsi.gov.uk

Country and regional (sub-UK) public sector finances

Our public consultation to gather your suggestions for a country and regional public sector finances publication closed on 11 April 2016.

We will publish a summary of the information gathered as a part of this exercise within the next 12 weeks and implement any recommendations thereafter.

The use of GDP in public sector fiscal ratio statistics

Our public consultation on the use of Gross Domestic Product (GDP) in our presentation of public sector finances closed on 18 March 2016. We will publish a summary of the information gathered as a part of this exercise within the next 12 weeks and implement any recommendations thereafter.

More information on the calculation of GDP ratios can be found in The Use of GDP in Public Sector Fiscal Ratio Statistics.

List of tables associated with this bulletin

  • PSA1 Public Sector Summary
  • PSA2 Public Sector Net Borrowing: by sector
  • PSA3 Public Sector Current Budget Deficit, Net Borrowing and Net Cash Requirement (excluding public sector banks)
  • PSA4 Public Sector Net Debt (excluding public sector banks)
  • PSA5A Long Run of Fiscal Indicators as a percentage of GDP on a financial year basis
  • PSA5B Long Run of Fiscal Indicators as a percentage of GDP on a quarterly basis*
  • PSA6A Net Borrowing: month and year-to-date comparisions
  • PSA6B Central Government Account: Overview
  • PSA6C Central Government Account: Total Revenue,Total Expenditure and Net Borrowing
  • PSA6D Central Government Account: Current Receipts
  • PSA6E Central Government Account: Current Expenditure
  • PSA6F Central Government Account: Net Investment
  • PSA6G Local Government Account: Overview*
  • PSA6H Local Government Account: Total Revenue, Total Expenditure and Net Borrowing*
  • PSA6I Local Government Account: Current Receipts*
  • PSA6J Local Government Account: Current Expenditure*
  • PSA6K Local Government Account: Net Investment*
  • REC1 Reconciliation of Public Sector Net Borrowing and Net Cash Requirement (excluding banking groups)
  • REC2 Reconciliation of Central Government Net Borrowing and Net Cash Requirement
  • PSA7A Public Sector Net Cash Requirement
  • PSA7B Public Sector Net Cash Requirement*
  • PSA7C Central Government Net Cash Requirement
  • PSA7D Central Government Net Cash Requirement on own account (receipts and outlays on a cash basis)
  • REC3 Reconciliation of Central Government Net Cash Requirement and Debt (Experimental Statistic)
  • PSA8A General Government Consolidated Gross Debt nominal values at end of period
  • PSA8B Public Sector Consolidated Gross Debt nominal values at end of period
  • PSA8C General Government Net Debt nominal values at end of period
  • PSA8D Public Sector Net Debt nominal values at end of period
  • PSA9 Bank of England Asset Purchase Facility Fund (APF)
  • PSA10 Public Sector transactions by sub-sector and economic category
  • PSA1R Public Sector Statistics: Revisions since last publication*
  • PSA2R Public Sector Net Borrowing: by sector; Revisions since last publication
  • PSA6R Central Government Account: overview; Revisions since last publication*
  • These tables are published in Excel format only.

Appendices – Data in this release

  • Appendix A Public Sector Finances Tables 1 to 10
  • Appendix B Large impacts on public sector fiscal measures excluding financial intervention (one off events)
  • Appendix C Revisions Analysis on several main components of the central government account (current receipts, current expenditure, net borrowing and net cash requirement)

The following guidance documents aim to help users gain a detailed understanding of the public sector finances:

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14 .Background notes

  1. Data quality

    A summary quality report for the public sector finances is available on our 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 our website on 19 October 2012.

  2. Definitions

    A methodology guide to monthly public sector finance statistics is available on our 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.

  3. 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 debt that include public sectors banks.

    Since 1997, it has been an essential feature of the UK Public Sector Finances' fiscal measures that they are based on National Accounts and European Government Finance Statistics concepts. It is important that these fiscal measures continue to be aligned with these international standards to ensure a high degree of comparability between domestic and international measures and because the government bases its fiscal policy on these aligned measures.

  4. Coherence

    EU Council Directive 2011/85/EU (part of the enhanced EU economic governance package regulations known as the "6 pack") includes statistical requirements for government finance statistics relating to the monthly publication of statistics and annual publication of specific contingent liabilities and other potential liabilities. Tables PSA6C and PSA6H were introduced in 2014 into the PSF bulletin in order to fully comply with the monthly government finance statistics requirements.

    On 22 December 2014, we published for the first time the required information on government contingent liabilities and other potential liabilities. The latest update to these figures was published on 22 December 2015 alongside an article setting out the wider background to different debt measures used in the UK.

    The Public Sector Finances (PSF) has 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. More information can be found in the Public Sector Finances Revision Policy.

    General government net borrowing and gross consolidated debt reported in this bulletin are calculated following the rules of the European System of Accounts 2010 (ESA 2010) and are the same in definition as the General Government Debt and Deficit monitored under the Maastricht Treaty. This was most recently reported on 15 April 2016, with the next publication scheduled for 15 July 2016.

    When calculating debt as a percentage of GDP in the bulletin on EU Government Debt and Deficit the general government gross debt at the end of the year is divided by the GDP for the previous 12 months. This methodology is adopted to be consistent with Eurostat publications which report on Maastricht debt for all EU countries.

    However, when calculating public sector net debt as a percentage of GDP in the UK public sector finances the debt figure is divided by an annual GDP figure which is centred on the month to which the debt relates. To be consistent the general government gross debt as a percentage of GDP in the public sector finances is calculated using the same centred GDP figure. More information can be found in an article on the use of GDP in the fiscal ratio statistics.

    Tax receipts data published in this bulletin are presented in terms of broad tax categories (for example, Income Tax, VAT). For more detail on individual taxes users can go to the HM Revenue and 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 in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

  5. 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 financial years ending 2006 to 2010. From September 2012 onwards the data releases have been made from OSCAR, the replacement for COINS. The latest in-year quarterly data was released on 22 March 2016, and the latest annual data were released on 20 November 2015. The data are accessible from HM Treasury’s website.

  6. Accuracy

    Central government departmental expenditure data are subject to various validation processes and improve over time. They go through 4 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 March 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 up to and including the financial year ending 2013 (April 2012 to March 2013) and the financial year ending 2014 (April 2013 to March 2014) are at Stage 4, while data for the financial year ending 2015 (April 2014 to March 2015) are at Stage 2 and data for the financial year ending 2016 (April 2015 to March 2016) are at stage 1.

    The local government data for the financial year ending 2011, 2012 and 2013 for local authorities are based on final outturns for receipts and expenditure.

    Data for the financial year ending 2014 (April 2013 to March 2014) and the financial year ending 2015 (April 2014 to March 2015) are mainly based on final outturns (provisional outturns have been used for Scotland).

    Estimates for financial year ending 2016 (April 2015 to March 2016) are based on a combination of in-year returns and forecast data. These are subject to revision when outturn data become available.

  1. Revisions

    We define a revision as a scheduled change to any published ONS output which may be made in order to incorporate better source data or to reflect improved methodology.

    The Public Sector Finances Revision Policy is published on our website. It was last updated in September 2015.

    Table 6 summaries revisions to the first estimate of PSNB ex for the last 6 financial years and illustrates that revisions to PSNB ex may be both upwards or downward.

    The Revisions analysis for Public Sector Finances: Appendix C dataset to the monthly public sector finance statistical bulletin presents revisions analysis to a number of main central government measures (current receipts, current expenditure, net borrowing and net cash requirement).

    By applying a statistical significance test, this analysis investigates the size and direction of revisions from each measure’s first publication to that recorded a year later. An average of 5 years worth of such revisions is used to identify any statistical bias.

    These indicators only provide summary measures of revisions; the revised data may still be subject to measurement error.

    Currently data for the public sector banks are only available for periods up to June 2015. Values for months from July 2015 onwards are our estimates. Consequently these, and the aggregates which include the impacts of financial interventions, may be revised substantially when actual data becomes available.

  2. The alignment of public sector finance with EU Government Deficit and Debt return

    Each quarter (March, June, September and December) public sector finance (PSF) data are aligned to the data reported in the EU Government Deficit and Debt return to take advantage of the more detailed quarterly data underpinning the latter publication.

    In order for the latest month and financial year-to-date to reflect the latest available information, while ensuring coherence between the EU Government Deficit and Debt Return output and the PSF statistical bulletin:

    • the latest reported month reflects the most up-to-date PSF data available
    • the quarterly data in the periods common to both the EU Government Deficit and Debt Return and PSF are aligned
    • the estimates for the month immediately prior to the latest month (and following that aligned to the EU Government Deficit and Debt Return) are calculated by taking the latest data for the cumulative financial year-to-date and subtracting both the cumulative totals for those aligned quarters in the financial year and the latest month estimates.

    For example, in the PSF published in September:

    • the August estimates use the latest reported data
    • the PSF data in the period April to June are aligned to the EU Government Deficit and Debt Return
    • the July figures are derived from the financial year-to-date (April to August) less the sum of the aligned period (April to June) and August.

    This alignment process results in a temporary adjustment to the published monthly profiles which will unwind in the dataset reported in the bulletin published in the following month which is then de-coupled from the EU Government Deficit and Debt Return to reflect the latest available data.

    In the example above, the derived estimate to July may revise substantially to reflect the latest monthly path.

    This phenomenon is discussed further in the Public Sector Finances Revision Policy.

  3. Publication policy

    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 our website.

    A note on the main uses and users of the public sector finances statistics is available on our website.

    Recommendations for the improvement of the public sector finances statistical bulletin may be emailed to public.sector.accounts@ons.gsi.gov.uk

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

    Special arrangements apply to the public sector finances, which is produced jointly with HM Treasury. A list of ministers and officials with pre-publication access to the contents of this bulletin is available on request. In addition some members of the Treasury’s Fiscal Statistics and Policy (FSP) team will have access to them at all stages, because they are involved in the compilation or quality assurance of data, and some members of the Treasury’s Communications team will see the bulletin, but only within the 24 hour pre-release period, because they place these data on the website.

    The UK Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

    Designation can be broadly interpreted to mean that the statistics:

    • meet identified user needs
    • are well explained and readily accessible
    • are produced according to sound methods
    • are managed impartially and objectively in the public interest

    Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.

    Public sector finance data series previously published in Financial Statistics are made available for download on the public sector finance datasets page.

    Tables 1.2A, 1.3A and 1.4A which are updated monthly will continue to be available monthly, published concurrently with the PSF Supplementary data, while Tables 1.3B, 1.3C and 1.3D will be available quarterly.

  4. Feedback

    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: public.sector.accounts@ons.gsi.gov.uk

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Contact details for this Statistical bulletin

Fraser Munro
fraser.munro@ons.gsi.gov.uk
Telephone: +44 (0)1633 456402