Today the Office for National Statistics and HM Treasury published Public Sector Finances September 2011. We now have details of central government receipts, central government spending, public sector net investment, borrowing and debt for the first half of financial year 2011-12.

Rowena Crawford, a Research Economist at the IFS, said:

"Today's figures suggest that, if trends for the year to date were to continue, borrowing this year would come in around the official forecast of £122 billion. This is a somewhat rosier picture than was painted by last month's figures, largely due to a downwards revision of £2.2bn to estimated borrowing in August.

"This relatively positive picture overall masks two trends. The bad news is that tax receipts are down compared to forecasts, likely reflecting underlying economic weakness. On the other hand spending is also coming in below forecast - which is perhaps surprising given the scale of cuts to departmental budgets already factored into the forecast. The risk of course is that spending will recover as departments spend up to their budgeted limits. If that were to happen, and tax revenues didn't bounce back, then borrowing targets would be missed."

Headline Comparisons

• Central government current receipts in September were 4.2% higher than in the same month last year. Receipts over the six months April to September 2011 were 4.9% higher than in the same months of 2010. The OBR forecast at the time of the March 2011 Budget implied that central government current receipts would grow by 6.9% over the whole of 2011-12. The growth in receipts so far this year looks artificially weak because of the different timing of two bank taxes - the temporary Bank Payroll Tax generated receipts in April 2010 while receipts from the new Bank Levy only started to come in from July 2011. Although taking these into account improves the picture somewhat, underlying growth in receipts so far this year is still below what the OBR's forecast suggests for the year as a whole.
• Central government current spending in September was 0.6% higher than in the same month last year. Spending between April and September was 2.9% higher than in the same months of 2010. The OBR's forecast at the time of the March 2011 Budget implied that central government current spending for the whole of 2011-12 would be 3.6% above 2010-11 levels.
• Public sector net investment in September was £2.2bn, £0.4bn lower than in September 2010. Together, public sector net investment between April and September 2011 has been £9.4bn, which is 30% lower than in the same six months of 2010. The OBR's forecast at the time of the March 2011 Budget predicted that net investment in 2011-12 would be £31.8bn, which is 18% below last year's level.

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