This bulletin presents the first provisional estimates of UK public sector finances for the latest full financial year (April 2018 to March 2019); these are not final figures and will be revised over the coming months as we replace our initial estimates with provisional and then final outturn data.
Borrowing in the latest full financial year (April 2018 to March 2019) was £24.7 billion, £17.2 billion less than in the previous financial year; the lowest financial year borrowing for 17 years (April 2001 to March 2002).
Borrowing in the latest full financial year was £1.9 billion more than the £22.8 billion forecast by the Office of Budget Responsibility (OBR) in its Economic and Fiscal Outlook – March 2019.
Borrowing (public sector net borrowing excluding public sector banks) in March 2019 was £1.7 billion, £0.9 billion more than in March 2018; with March 2018 remaining the lowest March borrowing since 2006.
Debt (public sector net debt excluding public sector banks) at the end of March 2019 was £1,801.0 billion (or 83.1% of gross domestic product (GDP)); an increase of £22.1 billion (or a decrease of 1.5 percentage points of GDP) on March 2018.
Debt at the end of the latest full financial year was £2.0 billion less than the £1,803.0 billion forecast by the OBR, or lower by 0.2 percentage points of GDP.
Debt at the end of March 2019 excluding Bank of England (mainly quantitative easing) was £1,617.6 billion (or 74.6% of GDP); an increase of £28.1 billion (or a decrease of 1.0 percentage point of GDP) on March 2018.
Central government net cash requirement in the latest full financial year (April 2018 to March 2019) was £35.9 billion (£2.7 billion less than in the previous financial year) or £37.3 billion excluding both UK Asset Resolution Ltd and Network Rail (£3.4 billion less than in the previous financial year).
In the UK, the public sector consists of five sub-sectors: central government, local government, public non-financial corporations, Bank of England and public financial corporations (or public sector banks).
Unless otherwise stated, the figures quoted in this bulletin exclude public sector banks (that is, currently only Royal Bank of Scotland (RBS)), as the reported position of debt (and to a lesser extent borrowing) would be distorted by the inclusion of RBS's balance sheet (and transactions). This is because government does not need to borrow to fund the debt of RBS, nor would surpluses achieved by RBS be passed on to government, other than through any dividends paid as a result of government equity holdings.
Public sector net borrowing excluding public sector banks (PSNB ex) measures the gap between revenue raised (current receipts) and total spending (current expenditure plus net investment (capital spending less capital receipts)). Public sector net borrowing is often referred to by commentators as “the deficit”.
The public sector net cash requirement (PSNCR) represents the cash needed to be raised from the financial markets over a period of time to finance the government’s activities. This can be close to the deficit for the same period but there are some transactions, for example, loans to the private sector, which need to be financed but do not contribute to the deficit. It is also close but not identical to the changes in the level of net debt between two points in time.
Public sector net debt excluding public sector banks (PSND ex) represents the amount of money the public sector owes to private sector organisations including overseas institutions, largely as a result of issuing gilts and Treasury Bills, less the amount of cash and other short-term assets it holds. Public sector net debt is often referred to by commentators as “national debt”.
While borrowing (or the deficit) represents the difference between total spending and receipts over a period of time, debt represents the total amount of money owed at a point in time.
The debt has been built up by successive government administrations over many years. When the government borrows (that is, runs a deficit), this normally adds to the debt total. So reducing the deficit is not the same as reducing the debt.
Accounting for student loans
On 17 December 2018, we announced our decision on how we will treat student tuition fee and maintenance loans in the government’s accounts. We have published a blog explaining our role and why we have taken these decisions. We aim to implement these changes in September 2019.Back to table of contents
This section presents information on aspects of data or methodology that have been introduced or improved since the publication of the previous bulletin (21 March 2019), along with supporting information users may find useful.
Figures expressed as a ratio of gross domestic product
At the end of each financial year, while data for current budget deficit, net investment and net borrowing for the final quarter of the financial year (January to March) are available, gross domestic product (GDP) for the corresponding period is not. To enable us to publish estimates of these figures as ratios of GDP for the latest full financial year, the final quarter of the GDP denominator is estimated based on forecasts produced by the Office for Budget Responsibility (OBR).
This estimate of GDP will be used in the March, April and May publications and revised in the June publication when the published value of GDP becomes available.
How early estimates of the components of net borrowing are improved over time
This bulletin presents the first provisional estimates of UK public sector finances for the complete financial year ending March 2019 (April 2018 to March 2019); these are not final figures and will be revised over the coming months as we replace our initial estimates with provisional and then final outturn data.
For example, when we first published our estimate of public sector net borrowing (PSNB ex) for the financial year ending March 2018 (April 2017 to March 2018) in April 2018 we estimated it as £42.6 billion. Twelve months later, in April 2019 we present a revised estimate of £41.8 billion, £0.8 billion lower than our initial estimate.
Appendix F: Revisions to the first reported estimate of financial-year-end public sector net borrowing (excluding public sector banks) by sub-sector; summarises revisions to the first estimate of public sector borrowing (excluding public sector banks) by sub-sector for the last six financial years. Revisions are shown at 6 and 12 months after year end.
We have published an article, Public Sector Finances – Sources summary and their timing (PDF, 22.8KB), which provides a brief summary of the different sources used and the implications of using those data in the monthly Public sector finances (PSF) statistical bulletin.Back to table of contents
In March 2019, the public sector spent more money than it received in taxes and other income, meaning it had to borrow £1.7 billion.
Figure 1 summarises public sector borrowing by sub-sector in March 2019 and compares this with the equivalent measures in the same month a year earlier (March 2018). This presentation splits public sector net borrowing excluding public sector banks (PSNB ex) into each of its four sub-sectors: central government, local government, public corporations and Bank of England.
Central government receipts in March 2019 increased by 3.1 billion (or 5%) compared with March 2018, to £65.1 billion, while total central government expenditure increased by 5.7% (or £3.5 billion) to £65.7 billion.
Much of this annual growth in central government receipts in March 2019 came from Income Tax-related revenue, with Pay As You Earn (PAYE) and National Insurance contributions increasing by £0.8 billion and £1.1 billion respectively.
This month, accrued receipts of Value Added Tax (VAT) increased by £0.4 billion compared with March 2018, however, accrued Corporation Tax (CT) receipts decreased by £0.1 billion over the same period. It is important to note that both of these taxes contain forecast cash receipts data and are liable to revision as actual cash receipts data are received.
Over the same period, there were notable increases in expenditure on goods and services, net social benefits, gross capital formation and capital transfers to the private sector of £1.9 billion, £0.6 billion, £0.6 billion and £0.8 billion respectively.
Unusually in March 2019, accrued interest on central government’s outstanding debt was recorded as a negative component of net borrowing. This was due to downward movements (between December 2018 and January 2019) in the Retail Prices Index (RPI) to which index-linked bonds are pegged.
The valuation of index-linked gilts is based on the value at issuance uplifted by the RPI. When RPI increases, this increases the value of the gilts stock and when it decreases, it decreases the value of the gilts stock. This movement in the stock of index-linked gilts is captured as accrued interest, which was negative this month due to a drop in the RPI. The negative figure does not reflect an actual flow of money into central government; in March 2019 central government’s cash outlay on interest (including gilt coupon payments) was £7.6 billion.
As explained, this fall in RPI reduces not only the accrued interest but also the stock of index-linked gilts and therefore contributes to a reduction in public sector net debt (PSND) of around £3 billion, although this is offset by other impacts on PSND.
Local government data for March 2019 are based on budget forecasts for England, Wales and Scotland, while public corporations data remain initial estimates, with most components calculated by the Office for National Statistics (ONS) based on the Office for Budget Responsibility (OBR) forecasts. In both cases, additional administrative source data are used to estimate transfers to each of these sectors from central government.
Due to the volatility of the monthly data, the cumulative financial year-to-date (or full financial year as reported this month) borrowing figures often provide a better indication of the position of the public finances than the individual months.
In the latest full financial year (April 2018 to March 2019), public sector spending exceeded the money received in taxes and other income. This meant the public sector had to borrow £24.7 billion; that is, £17.2 billion less than the previous full financial year. Borrowing in this financial year is the lowest for any April to March period for 17 years.
The public sector spent £43.7 billion on capital items (or net investment), such as infrastructure, while the “day-to-day” activities of the public sector (current budget) were in surplus by £19.0 billion. Therefore the public sector borrowed £24.7 billion.
Figure 2 presents both monthly and cumulative public sector net borrowing (excluding public sector banks) in the latest full financial year (April 2018 to March 2019) and compares these with the previous financial year.
Figure 3 summarises the contributions of each sub-sector to public sector net borrowing (excluding public sector banks) in the latest full financial year (April 2018 to March 2019) and compares these with the previous financial year.
The difference between central government's income and spending makes the largest contribution to the amount borrowed by the public sector. In the latest full financial year (April 2018 to March 2019), of the £24.7 billion borrowed by the public sector, £20.7 billion was borrowed by central government and £7.8 billion was borrowed by local government, while the borrowing of the Bank of England and public corporations was in surplus by £3.3 billion and £0.6 billion respectively.
In the latest full financial year (April 2018 to March 2019), central government received £739.4 billion in income, including £558.6 billion in taxes. This was 5% more than in the previous financial year.
Over the same period, central government spent £741.5 billion, an increase of around 3%. Of this amount, just below two-thirds was spent by central government departments (Education, Defence, Health and Social Care), around one-third was spent on social benefits (such as pensions, unemployment payments, Child Benefit and Maternity Pay), with the remainder being spent on capital investment and interest on government’s outstanding debt.
Figure 4 illustrates that annual borrowing has been generally falling since the peak in the financial year ending (FYE) March 2010 (April 2009 to March 2010).
In the latest full financial year (April 2018 to March 2019), the £24.7 billion (or 1.2% of gross domestic product (GDP)) borrowed by the public sector was less than one-fifth (16.1%) of the amount seen in the FYE March 2010, when borrowing was £153.1 billion (or 9.9% of GDP).Back to table of contents
Public sector net debt (PSND ex) represents the amount of money the public sector owes to private sector organisations (including overseas institutions), that has built up by successive government administrations over many years.
When the government borrows, this normally adds to the debt total, but it is important to remember that reducing the deficit is not the same as reducing the debt.
At the end of March 2019, the amount of money owed by the public sector to the private sector stood at around £1.8 trillion (Figure 5), which equates to 83.1% of the value of all the goods and services currently produced by the UK economy in a year (or gross domestic product (GDP)).
The Bank of England’s (BoE) contribution to net debt is largely a product of their quantitative easing measures, namely the Bank of England Asset Purchase Facility Fund (APF) and the Term Funding Scheme (TFS). If we were to exclude BoE from our calculation of public sector net debt (excluding public sector banks), it would reduce by £183.4 billion, from £1,801.0 billion to £1,617.6 billion, or from 83.1% of GDP to 74.6%.
Figure 6 breaks down outstanding public sector net debt at the end of March 2019 into the sub-sectors of the public sector. In addition to public sector net debt excluding public sector banks (PSND ex), this presentation includes the effect of public sector banks on debt.
Figure 7 incorporates the borrowing components detailed in Figure 2 to illustrate how the differences between income and spending (both current and capital) have led to the accumulation of debt in the latest full financial year (April 2018 to March 2019).
The reconciliation between public sector net borrowing and net cash requirement is presented in more detail in Table REC1 in the Public sector finances Tables 1 to 10: Appendix A dataset.Back to table of contents
Revisions can be the result of both updated data sources and methodology changes. This month, revisions to public sector net borrowing are a result of updated data.
Table 1 presents the revisions to the headline statistics presented in this bulletin compared with those presented in the previous publication (published on 21 March 2019).
|£ billion¹ (not seasonally adjusted)|
|2016 to 2017||0.0||0.0||0.0||0.0||0.0||0.0||0.0||0.0|
|2017 to 2018||0.0||0.0||0.0||0.0||0.0||0.0||-0.2||0.0|
|2018 to 2019 YTD||0.1||0.4||-0.6||0.0||-0.1||0.1||-0.2||0.0|
Download this table Table 1: Revisions to main aggregates.xls .csv
Revisions to public sector net borrowing (excluding public sector banks) in the financial year-to-date (April 2018 to February 2019)
The data for the latest month of every release contain some forecast data. The initial outturn estimates for the early months of the financial year, particularly April, contain more forecast data than other months, as profiles of tax receipts, along with departmental and local government spending are still provisional. This means that the data for these months are typically more prone to revision than other months and can be subject to sizeable revisions in later months.
Public sector net borrowing excluding public sector banks (PSNB ex) in the period April 2018 to February 2019 has been revised down by £0.1 billion compared with figures presented in the previous bulletin (published on 21 March 2019). Over this period a decrease of £0.6 billion to the previous estimate of public corporations’ net borrowing was largely offset by increases in the estimates of the net borrowing of local and central governments of £0.4 billion and £0.1 billion respectively.
While updated estimates of transfers from central government have led to small increases in local government net borrowing across the financial year-to-date, forecasts based largely on the Office for Budget Responsibility’s (OBR) Economic and Fiscal Outlook – March 2019 have led to further revisions to local government net borrowing in the final quarter of the current financial year.
Public corporations data for the current financial year-to-date are based on estimates, with most components calculated by the Office for National Statistics (ONS) based on OBR forecasts. This latest set of forecasts has further informed our estimates, leading to revisions to public corporations’ net borrowing across the whole period.
Since the previously published estimate, while central government net borrowing remains largely unchanged across the financial year-to-date, there was a noticeable profile change between December 2018 and January 2019. This change was largely relating to the unwinding of regular quarterly temporary profile adjustments used to align our monthly public finances data and our quarterly government finance statistics (GFS) reported to the European Commission. In this case, these adjustments mainly affected the capital transfers from central government to the private sector. This is a regular quarterly phenomenon that was discussed in last month’s bulletin, published 21 March 2019.
Revisions to public sector net debt excluding public sector banks
Though our estimate of public sector net debt excluding public sector banks (PSND ex) at the end of February 2019 remains largely unchanged compared with that presented in the previous bulletin (published on 21 March 2019), the ratio of PSND ex compared with gross domestic product (GDP) has been revised back to October 2018 due to the inclusion of the most up-to-date estimates of GDP published on 29 March 2019.Back to table of contents
The independent Office for Budget Responsibility (OBR) is responsible for the production of official forecasts for government. These forecasts are usually produced twice a year, in spring and autumn.
The OBR forecasts used in this bulletin are based on those published in its Economic and Fiscal Outlook – March 2019. In this publication OBR expects public sector net borrowing (excluding public sector banks) to be £22.8 billion in the financial year ending March 2019, increasing to £29.3 billion in the financial year ending March 2020.
Table 2 compares the current outturn estimates for each of our main public sector (excluding public sector banks) aggregates for the latest full financial year with corresponding OBR forecasts for the following financial year. Further, it compares the latest full financial year (April 2018 to March 2019) outturn estimates with those of the previous financial year.
Caution should be taken when comparing public sector finances data with OBR figures for the full financial year. Data are not finalised until some time after the financial year ends, with initial estimates made soon after the end of the financial year often subject to sizeable revisions in later months as forecasts are replaced with audited outturn data.
There may also be known methodological differences between OBR forecasts and outturn data.
|Excluding public sector banks||£ billion¹ (not seasonally adjusted)|
|Full financial year||Full financial year⁷|
|% change||2018 to|
|2018 to 2019|
|Current budget deficit²||-0.8||-19.0||-2,180.2||-19.0||-20.4||-6.9|
|Net borrowing ⁴||41.8||24.7||-41.0||24.7||22.8||8.2|
|Net debt ⁵||1,778.9||1,801.0||1.2||1,801.0||1,803.4||-0.1|
|Net debt as a percentage of GDP⁶||84.6||83.1||NA||83.1||83.3||NA|
Download this table Table 2: Latest outturn estimates compared with Office for Budget Responsibility forecasts.xls .csv
The UK government debt and deficit statistical bulletin is published quarterly (in January, April, July and December each year), to coincide with when the UK and other EU member states are required to report on their deficit (or net borrowing) and debt to the European Commission.
On 17 April 2019, we published UK government debt and deficit: December 2018, consistent with Public sector finances, UK: February 2019 (published on 21 March 2019). In this publication we stated that:
general government gross debt was £1,837.5 billion at the end of December 2018, equivalent to 86.7% of gross domestic product (GDP); 26.7 percentage points above the Maastricht reference value of 60%
general government deficit (or net borrowing) was £32.3 billion in the calendar year ending December 2018, equivalent to 1.5% of GDP; 1.5 percentage points below the Maastricht reference value of 3%
It is important to note that the GDP measure used as the denominator in the calculation of the debt ratios in the UK government debt and deficit statistical bulletin, differs from that used within the Public sector finances statistical bulletin.Back to table of contents
The public sector finances Quality and Methodology Information report contains important information on:
- the strengths and limitations of the data and how it compares with related data
- uses and users of the data
- how the output was created
- the quality of the output including the accuracy of the data
The Public sector finances methodological guide provides comprehensive contextual and methodological information concerning the monthly Public sector finances statistical bulletin.
The guide sets out the conceptual and fiscal policy context for the bulletin, identifies the main fiscal measures and explains how these are derived and inter-related. Additionally, it details the data sources used to compile the monthly estimates of the fiscal position.
Local government forecasts
In recent years, planned expenditure initially reported in local authority budgets has systematically been higher than the final outturn expenditure reported in the audited accounts. We therefore include adjustments to reduce the amounts reported at the budget stage.
Further information on these and additional adjustments can be found in the public sector finances Quality and Methodology Information report.Back to table of contents
This section presents information on aspects of data or methodology that are planned but not yet included in the public sector finances.
Further, in our article Looking ahead: developments in public sector finance statistics, we provide users with early sight of those areas where the fiscal statistics may be significantly impacted upon by methodological or classification changes during the coming 24 months.
EU withdrawal agreement
Although the Office for Budget Responsibility (OBR) discusses the EU settlement in their Economic and Fiscal Outlook – March 2019, the details in the report are still subject to negotiation.
There is insufficient certainty at this stage for us to complete a formal assessment of impact on the UK public sector finances.
On 28 January 2019, National Statistician John Pullinger released a statement outlining our legislative preparations for a possible no-deal EU exit.
Accounting for student loans: how we are improving the recording of student loans in government accounts
On 17 December 2018, we announced our decision on how we will treat student tuition fee and maintenance loans in the government’s accounts. We have published a blog explaining our role and why we have taken this decision.
In addition, we have published a technical note, giving further information about how we came to our decision.
It is anticipated that implementation of this decision into our headline statistics will take some time and that any change will be reflected in the public sector finances in September 2019.
East Coast Mainline
On 16 May 2018, the government announced that from 24 June 2018, London North Eastern Railway (LNER) will take over the running of East Coast Mainline services. On 31 August 2018, we announced that LNER would be classified to the public non-financial corporations sub-sector, effective from 14 February 2018. We are currently investigating the implications of this decision and our conclusions will be announced in due course.
Following Carillion Plc declaring insolvency on 15 January 2018, the UK government announced that it would provide the necessary funding required by the Official Receiver, to ensure continuity of public services through an orderly liquidation. The Official Receiver has been appointed by the court as liquidator, along with partners at PwC that have been appointed Special Managers. The defined benefit pension schemes of former Carillion employees are currently being assessed by the Pension Protection Fund (PPF) prior to any transition into the PPF scheme.
We are currently investigating the various impacts of the liquidation of Carillion on the public sector finances, including in relation to the public-private partnership projects in which Carillion was involved and the additional funding that the government has provided to maintain public services. We will announce our findings in due course.
Prior to liquidation, Carillion held approximately 450 contracts with government, representing 38% of Carillion’s 2016 reported revenue.
Company tax credits
In conjunction with HM Revenue and Customs (HMRC), we are currently reviewing our recording of company tax credits. We will announce the findings of this review and introduce any data revisions at the earliest opportunity.
UK Asset Resolution Ltd (UKAR) asset sale
On 2 April 2019, the government announced the £4.9 billion sale of Bradford and Bingley (B&B) mortgages to Citi, enabling the government to recover the full amount of the loan to Northern Rock (NRAM) and Bradford and Bingley.
B&B’s and NRAM’s closed loan books are managed by UK Asset Resolution Limited (UKAR) on behalf of the government. Following this transaction, UKAR now owns £8 billion worth of assets, down from £14 billion in September 2018 and from £116 billion in 2010.
This sale will be recorded within the public sector finances in the April 2019 dataset (to be published on 22 May 2019). The proceeds of such sales reduce the central government net cash requirement (CGNCR) and public sector net debt (PSND) by an amount corresponding to the cash raised from the sale, but have no impact on public sector net borrowing.
Clinical Negligence Indemnity Cover
On 1 April 2019, the government announced the Clinical Negligence Scheme for General Practice (CNSGP), operated by NHS Resolution on behalf of the Secretary of State for Health and Social Care.
The scheme provides comprehensive cover to all GPs and their wider practice team for clinical negligence relating to NHS services occurring from 1 April 2019. In parallel, the government have agreed commercial terms with the Medical Protection Society covering claims for historic NHS clinical negligence incidents of their GP members occurring at any time before 1 April 2019.
We are currently assessing the implications of this scheme on the public sector finances and will announce our findings at the earliest opportunity.Back to table of contents
Contact details for this Statistical bulletin
Telephone: +44 (0)1633 456402