Public finance bulletin: October 2012

Today the Office for National Statistics and HM Treasury published Public Sector Finances September 2012. 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 2012-13.

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

"Figures published today by the Office for National Statistics contain a significant, £6.7 billion, downward revision to estimated borrowing over the first five months of this financial year. While this improves the outlook for borrowing this year, growth in central government tax receipts is still running well below the forecast for the year as a whole and, while spending on public services by central government departments is also growing less quickly than forecast, it is too early to conclude that these departments will underspend their allocations. If the disappointing trend in central government receipts were to continue, but spending and other revenues turn out as forecast, borrowing would still overshoot the official forecast for this year by £15 billion."

Headline Comparisons

• Central government current receipts in September were 3.7% higher than in the same month last year. Receipts over the six months April to September were 0.8% 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 September was 3.8% higher than in the same month last year. Spending over the first half of 2012-13 was 2.1% higher than over the first half of 2011-12. 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 September was £1.6 billion, £0.3 billion less than was spent in September last year. Together, public sector net investment during the first six months of 2012-13 has been £7.8 billion (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 £0.6 billion less than was spent in the first half of 2011-12. 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 0.8% above last year's level.