Public Finance Press Releases

Public finance bulletin: September 2012

Date: 21 September 2012
Authors: Rowena Crawford , Carl Emmerson and Gemma Tetlow

Today the Office for National Statistics and HM Treasury published Public Sector Finances August 2012. We now have details of central government receipts, central government spending, public sector net investment, borrowing and debt for the first five months of financial year 2012-13.

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

"Today's figures persist in painting a gloomy picture with weaker-than-expected growth in receipts from taxes on income, spending and profits. In contrast spending by central government is growing broadly in line with the forecast for the year as a whole.

If the disappointing trend in central government receipts continues they would undershoot the official forecast for this year by £18 billion. If spending and other receipts turn out in line with the March forecast, this would bring public sector net borrowing in 2012-13, after excluding the one-off impact of specific transactions, up to £140 billion; this is more than was borrowed last year and around the same amount as was borrowed in 2010-11."

Headline Comparisons

  • Central government current receipts in August were 1.8% higher than in the same month last year. Receipts over the five months April to August were 0.4% higher than in the same months of 2011. The Office for Budget Responsibility's (OBR's) forecast at the time of the March 2012 Budget implied that central government current receipts for the whole of 2012-13 would be 3.7% above 2011-12 levels.

  • Central government current spending in August was 2.6% higher than in the same month last year. Spending over the five months April to August was 3.0% higher than in the same months of 2011. The OBR's forecast at the time of the March 2012 Budget implied that central government current spending for the whole of 2012-13 would be 3.0% above 2011-12 levels.

  • Public sector net investment in August was £1.2bn, £0.4 billion less than was spent in August last year. Together, public sector net investment during the first five months of 2012-13 has been £6.2bn (excluding the impact of the transfer of assets from the Royal Mail Pension Plan to the public sector and the closure of the Special Liquidity Scheme (SLS)). This is the same as was spent between April and August in 2011. The OBR's forecast at the time of the March 2012 Budget predicted that net investment over the whole of 2012-13 would be £26.9 billion (excluding the impact of Royal Mail and the SLS), which is 10.5% above last year's level.