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

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

“While today’s figures suggest tax receipts came in relatively strongly in December, the growth in receipts over the year to date has still been disappointing relative to the Office for Budget Responsibility’s forecast for the year as a whole. This reflects, in particular, weak growth in receipts of income tax, capital gains tax and national insurance contributions so far this year. In addition, central government current spending has also grown slightly more quickly so far than was forecast for the whole year, largely due to spending on the administration and delivery of public services. If these trends were to continue for the remaining three months of the financial year then borrowing this year could slightly overshoot the OBR’s forecast, by around £3 billion.”

Headline Comparisons

• Central government current receipts in December were 3.6% higher than in the same month last year. The Office for Budget Responsibility’s (OBR) latest Economic and Fiscal Outlook, published last month, forecast an increase in receipts relative to last year’s levels of 1.2% for the year as a whole and of 2.7% for the period from November 2012 to March 2013 (excluding the impact of financial transactions relating to the Asset Purchase Facility, Bradford and Bingley, and Northern Rock Asset Management). The latest figures show an increase relative to last year’s level of 0.3% for the year to date, with an increase of 1.3% in November and December compared to the same two months in 2011.

• Central government current spending in December was 5.4% higher than in the same month last year. The OBR’s latest forecast implies an increase relative to last year’s level of 2.5% for the year as a whole and of 2.7% for the period from November 2012 to March 2013 (excluding the impact of financial transactions relating to Bradford and Bingley, and Northern Rock Asset Management). The latest figures show an increase relative to last year’s level of 2.8% for the year to date, with an increase of 4.5% in November and December compared to the same two months in 2011.

• Public sector net investment in December was £2.4bn, around the same as was spent in December 2011. Public sector net investment between April and December 2012 has been £11.6bn (excluding the impact of the transfer of assets from the Royal Mail Pension Plan to the public sector), which is 18.0% lower than in the same nine months of 2011. The OBR’s latest forecast was that net investment in 2012–13 would be £18.9bn (excluding the impact of financial transactions relating to the Asset Purchase Facility, Bradford and Bingley, Northern Rock Asset Management and Royal Mail), which is 32.5% below last year’s level.

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