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IFS analysis of today’s public finance figures

Carl Emmerson and Thomas Pope
Press release

Today the Office for National Statistics and HM Treasury published Public Sector Finances January 2018. We now have details of central government receipts, central government spending, public sector net investment, borrowing and debt for the first ten months of financial year 2017−18.

Tom Pope quote

Thomas Pope, a Research Economist at the IFS, said: 

“The Chancellor will doubtless be pleased that the Spring Statement in three weeks’ time can be expected to contain a downwards revision to the forecast for government borrowing this year. Indeed, rather than rising slightly between 2016–17 and 2017–18 – as forecast in the November Budget – it now appears more likely than not that the deficit this year will be lower than it was last year.

An upwards revision to estimated receipts of corporation tax, PAYE and National Insurance over the first nine months of this financial year have contributed to borrowing being over £2 billion lower than thought a month ago. While self-assessment revenues in January 2018 were lower than in January 2017 this was to be expected as last year’s revenues were flattered by some individuals responding to a rise in tax on dividend income. Even with just two months of data to come considerable uncertainty remains. Self-assessment revenues that are due in January leak into February and estimates of local government spending are typically revised for several months.

The deficit is now running at the same cash level – around £40 billion over twelve months – as it was prior to the financial crisis. As a share of national income it is smaller. But delivering and maintaining the budget surplus that the Government wants will not be easy.”

Further analysis

Taking an extrapolation of public sector net borrowing over the first ten months of the financial year, compared with the same ten months last year, borrowing would be on course to be below £40 billion in 2017–18. This compares with the OBR’s forecast in November of almost £50 billion. There are still two months of the year to go, and the data are subject to revision, but as things stand it appears more likely than not that borrowing will be lower than in 2016–17 (£46.0 billion).

Table: Growth in receipts, spending and borrowing over the year to date


% Growth


Jan 18 on Jan 17

Financial year-to-date

OBR full-year forecast

Central government tax and NICs receipts




Of which




Self-assessment income tax




Total central government receipts (ex. APF)




Total central government current spending





14% smaller surplus

16% lower borrowing

9.0% higher borrowing

Notes: NICs refers to National Insurance Contributions; PSNB refers to public sector net borrowing. Central government current spending includes depreciation

Receipts data this month revised upwards the performance of receipts over the first nine months of the year. Part of this was driven by PAYE and NICs revenues, while a large part was a result of revisions to corporation tax receipts. While receipts are scored on an accruals basis (as profits are earned), corporation tax receipts are received in a lumpy fashion. January is one month in which companies make large corporation tax payments. These were stronger than forecasts implied, and resulted in higher revenues being recorded in previous months.

Self-assessment income tax receipts this month were 3.5% down on January 2017. Given that the OBR forecast an 11% decline for these receipts over the year as a whole, this was a relatively modest fall. While the majority of these receipts are scored in January, however, a substantial amount is also usually recorded in February, so we will have to wait until next month’s figures before we can be sure that the forecast for this year was too pessimistic. 

Further information and contacts

For further information on today’s public finance release please contact: Carl Emmerson or Thomas Pope on 020 7291 4800, or email or

The Chancellor’s first Spring Statement is set for Tuesday 13th March 2018. Next month’s public finances release is due to be published on Wednesday 21st March 2018.

Relevant links:

More research on public spending finances can be found here.

Office for National Statistics & HM Treasury, Public Sector Finances, January 2018:

Office for Budget Responsibility analysis of monthly Public Sector Finances, January 2018:  

Office for Budget Responsibility, Economic and Fiscal Outlook, November 2017:   

HM Treasury Autumn Budget 2017: