General government deficit (net borrowing) was £91.9 billion in the financial year ending March 2015 (5.0% of Gross Domestic Product (GDP)), a decrease of £12.2 billion compared with the financial year ending March 2014
General government gross debt was £1,601.3 billion at the end of the financial year ending March 2015 (87.5% of GDP), an increase of £79.9 billion compared with the end of the financial year ending March 2014
This release is fully consistent with the latest data transmission on UK government deficit (or net borrowing) and debt that the UK and other European Union (EU) member states are required to report quarterly to the European Commission
The figures for 1997 onwards in this statistical bulletin are fully consistent with the data published in the Public Sector Finances statistical bulletin of 22 December 2015
The EU Government Deficit and Debt statistical bulletin is published quarterly in January, April, July and October each year, to coincide with when the UK and other European Union (EU) member states are required to report on their deficit (or net borrowing) and debt to the European Commission.
Article 126 of the Treaty on the Functioning of the European Union (EU) obliges member states to avoid excessive budgetary deficits. The Protocol on the Excessive Deficit Procedure, annexed to the Maastricht Treaty, defines 2 criteria and reference values with which member states’ governments should comply. These are:
a deficit (net borrowing) to Gross Domestic Product (GDP) ratio of 3%
a debt to GDP ratio of 60%
The deficit is a measure of how much the government has to borrow to cover its expenditure once revenue has been netted off, for this reason it is also known as net borrowing. The monetary values quoted are in current prices, that is, they represent the price of borrowing in the year to which they relate without any adjustments for inflation. Thus for comparisons over time the figures as a percentage of GDP (also measured in current prices) are used to provide a comparable time series.
The source data, and therefore the debt and deficit figures published in this bulletin (for the time period 1997 onwards), are the same as those published in the Public Sector Finances, November 2015 statistical bulletin published on 22 December 2015. There are 2 main differences between the main borrowing and debt measures published in the Public Sector Finances and the deficit and debt figures published in this bulletin:
this bulletin includes only debt and deficit recorded to central and local government, whereas the UK Public Sector Finances’ measures also include the debt and deficit of other public sector bodies
this bulletin reports gross debt, that is, the financial liabilities of central and local government, whereas the Public Sector Finances’ headline measure is net debt, calculated as financial liabilities less liquid assets (that is, official reserve assets and other cash or cash-like assets)
This section provides the latest headline data for deficit (net borrowing) and debt, and supporting information.
The Public Sector Finances, November 2015 statistical bulletin published estimates for the headline measures of general government net borrowing and general government gross debt on 22 December 2015. This bulletin provides further information of these estimates and presents them in the context of the European Union (EU) requirements.
Table 1 shows the headline measures on a financial year and calendar year basis both as £ billion values and as a percentage of Gross Domestic Product (GDP).
Table 1: Government Deficit and Debt
|UK, financial year ending 2008 to financial year ending 2015 and calendar years 2007 to 2014|
|as % GDP||3.0||6.8||10.8||9.1||7.7||7.5||5.9||5.0|
|as % GDP||42.7||54.8||71.4||77.0||82.6||84.6||86.6||87.5|
|as % GDP||3.0||5.1||10.8||9.7||7.7||8.3||5.7||5.7|
|as % GDP||43.5||51.7||65.7||76.6||81.8||85.3||86.2||88.2|
|Source: Office for National Statistics|
|1. 2014/15 refers to the financial year ending March 2015.|
|2. At nominal values.|
|3. Unless otherwise stated.|
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General government deficit
In the financial year ending March 2015, the UK government deficit (net borrowing) was £91.9 billion (5.0% of GDP). This represents a decrease of £12.2 billion since the financial year ending March 2014 and is the lowest value since the financial year ending March 2008 when it was £45.7 billion (3.0% of GDP).
The financial year ending 2015 is the fifth annual reduction in net borrowing as a proportion of GDP since the financial year ending March 2010 when it was 10.8%. However, the deficit remains above the Maastricht reference value of 3.0%.
In the calendar year 2014, the UK government deficit (net borrowing) was £103.0 billion (5.7% of GDP). This represents an increase of £4.6 billion since 2013. However, cash transfers from the Asset Purchase Facility reduced the deficit by £18.6 billion in 2013 and only £8.7 billion in 2014. If these cash transfers are excluded then the deficit in the calendar year 2014 was £5.4 billion lower than 2013.
The long-term general government deficit (net borrowing) as a percentage of GDP is illustrated in Figure 1.
General government gross debt
At the end of the financial year ending March 2015, UK government gross debt was £1,601.3 billion (87.5% of GDP). As a proportion of GDP, this is the 12th consecutive annual increase. The general government gross debt first exceeded the 60% Maastricht (Excessive Deficit) reference value in the financial year ending March 2010 when it was £1,074.0 billion (71.4% of GDP).
At the end of the calendar year 2014, UK government gross debt was £1,602.2 billion (88.2% of GDP). This represents an increase of £106.3 billion since the end of 2013.
The long-term general government gross debt as a percentage of GDP is illustrated in Figure 2.
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The last edition of this bulletin in October 2015, included a number of methodological changes including those made for the 2015 annual national accounts publication (Blue Book 2015). This edition includes less methodological changes, as is normal following the annual national accounts publication, but 4 changes have been incorporated, these are:
Police Service Agreement
Implementing the reclassification of these payments from fees to taxes has led to an increase in central government current expenditure and an equal increase in central government current receipts, from financial year ending March 2004 and therefore has had no impact on central government net borrowing.
Heavy Goods Vehicle Road User Levy
Implementing this change has corrected the apportionment between duty paid by businesses and duty paid by households with a downward revision to vehicle duty paid by households and a matching increase in vehicle duty paid by businesses. This change has had no impact on central government net borrowing.
Community Infrastructure Levy
Community Infrastructure Levy is a planning charge, introduced by the Planning Act 2008 as a tool for local authorities in England and Wales to help deliver infrastructure to support the development of their area. The Community Infrastructure Levy has not previously been included and so its inclusion has reduced local government net borrowing from financial year ending March 2013 onwards. In the financial year ending March 2015, borrowing was reduced by £0.1 billion.
These charges are levied on ships for the maintenance of lighthouses and other aids to navigation. The inclusion of these receipts have led to a decrease in central government net borrowing of approximately £0.1 billion a financial year, from financial year ending March 1998 to date.
In addition to these methodological changes, some of the more significant recent events which impact on the reported government deficit and debt are summarised below. For more information on the methodlogical changes and events impacting these statistics please see the relevant section of the Public Sector Finances, November 2015 statistical bulletin.
Foreign exchange trading fines
In the financial year ending March 2015, central government received £1.3 billion in fines from the Financial Conduct Authority (FCA). Of this, in November 2014, a number of UK banks were fined a total of £1.1 billion for failures in their foreign currency operations.
More recently, in Quarter 2 (April to June) 2015, central government received has £0.7 billion in fines from the FCA.
Such fines are recorded as central government receipts and so reduce the deficit (net borrowing).
Bank of England Asset Purchase Facility Fund
The Chancellor announced on 9 November 2012 that it had been agreed with the Bank of England to transfer to the Exchequer the excess cash in the Asset Purchase Facility Fund. In line with European guidance (from Eurostat) the amount of cash that reduces net borrowing is limited by the entrepreneurial income earned by the Bank of England in the previous year.
In the financial year ending March 2015, there was a £10.7 billion transfer from the Asset Purchase Facility to HM Treasury, all of which affected (reduced) net borrowing.
In the financial year ending March 2014, there was a £31.1 billion transfer from the Asset Purchase Facility to HM Treasury. The Bank of England entrepreneurial income for the financial year ending 2014 was calculated as £12.8 billion, which represents the amount of Bank of England dividend payments that impacted on net borrowing (although only £12.2 billion of the dividend payments related to the Asset Purchase Facility).
Lloyds Banking Group
On 17 September 2013 the UK government began selling part of its share holding in Lloyds Banking Group. The sale of the shares does not directly impact on general government net borrowing or general government gross debt because it is purely a financial transaction exchanging equity for cash.
The cash received from the September 2013 sale of the government’s 6% stake (at 75p a share) was £3.2 billion.
A further sale was held on 23 to 24 March 2014 of a 7.5% stake, which raised £4.2 billion.
Following the March 2014 sale of shares, Lloyds Banking Group was reclassified from being a public financial corporation to a private financial corporation.
Between December 2014 and March 2015, small ongoing sales of shares have raised a further combined £1.7 billion.
Share sales in the second and third quarters of 2015
Although outside of the financial year ending March 2015, further share sales have occurred in the second (between April and June) and the third (between July and September) quarters of 2015. These are as follows:
the sale of the government’s 40% stake in the cross-Channel train operator Eurostar raised £757 million between April and June
the sale of half of the government’s retained shareholding in Royal Mail (a 15% stake) raised £750 million between April and June
the sale of 5.4% of the government’s stake in the Royal Bank of Scotland raised £2.1 billion between July and September
the ongoing sale of shares in Lloyds Banking group has raised a total of £3.4 billion between April and June 2015, and £2.7 billion between July and September
Under the Excessive Deficit Procedure all European Union (EU) member states report their latest detailed deficit and debt information to the European Commission twice a year. Supporting statistical information, including deficit and debt values, are reported quarterly. Both the biannual and quarterly returns are published by Eurostat website (the European statistical agency).
Both the debt and deficit figures in this statistical bulletin will be published by Eurostat on 22 January 2016.
The tables in this bulletin present the UK government debt and deficit position at the end of both the financial and calendar years. The UK, uniquely within the European Union, is assessed against the deficit and debt on a UK financial year basis (that is, April to March). In June 2015, the UK provided to Eurostat first estimates for the financial year ending 2015 and revised estimates for the calendar year 2014 (originally reported in March 2015); in December 2015 the UK provided revised estimates for both financial and calendar years.
The UK figures may be compared with those of other EU member states on the Government Finance Statistics section of the Eurostat website.
The latest UK government deficit and debt figures exceed the reference values set out in the Protocol on the Excessive Deficit Procedure. According to the latest deficit and debt figures published on 21 October 2015, 13 member states had a deficit exceeding the 3% of GDP reference value in 2014 and 16 member states had gross debts exceeding the 60% of GDP reference value as at the end of 2014.
While the main statistics provided to Eurostat are those of general government consolidated gross debt and general government net borrowing (or deficit), supplementary government finance statistics are also supplied by member states. A full set of government finance tables provided by the UK to Eurostat in December 2015 are included in this release.Back to table of contents
This is the third time that deficit and debt figures for the financial year ending March 2015 have been reported in this statistical bulletin series. Since the last publication of the EU Government Deficit and Debt Return in October 2015, the deficit in the financial year ending March 2015 has been revised down by £1.5 billion (1.6%) and debt as at the end of March 2015 has been revised up by £0.4 billion (0.02%).
Table M8R presents the revisions to main aggregates since the last publication of the EU Government Deficit and Debt Return in October 2015. Revisions to the data are consistent with revisions incorporated within the Public Sector Finances statistical bulletin.
Main methodological changes and recent events that affect data movements are described under “Recent events and methodological changes”.Back to table of contents
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