Public finance bulletin: December 2011

Rowena Crawford
Carl Emmerson
Gemma Tetlow

Published on 21 December 2011

Today the Office for National Statistics and HM Treasury published Public Sector Finances November 2011. We now have details of central government receipts, central government spending, public sector net investment, borrowing and debt for the first eight months of financial year 2010−11. Rowena Crawford, a Research Economist at the IFS, said:"A simple extrapolation from borrowing so far this year suggests that for the whole of 2011−12 it would come in below last month's forecast by the Office for Budget Responsibility of £127 billion. However, if central government departments were to exhaust their allocated budgets by the end of the year - as the OBR expects - then borrowing would be much more likely to come in as forecast. Furthermore, while so far overall tax receipts are in line with the OBR forecast, there are risks around this. For example, despite a large downwards revision to their expectations for corporation tax receipts this year in the Autumn forecast, meeting the OBR's projection still depends on strong growth in these receipts over the next four months, which would be a turn-around from the fall in receipts seen so far this year." <h4>Headline Comparisons</h4> <ul><li>Central government current receipts in November were 7.1% higher than in the same month last year. Receipts between April and November 2011 were 4.8% higher than in the same months of 2010. 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 4.9% for the year as a whole and of 5.3% for the period from November 2011 to March 2012. This is significantly lower than the 6.9% growth for the year as a whole previously forecast by the OBR at the time of the March 2011 Budget. </li> <li>Central government current spending in November was 0.8% higher than in the same month last year. Spending between April and November 2011 was 1.9% higher than in the same months of 2010. The OBR's latest forecast implies an increase relative to last year's level of 3.2% for the year as a whole and of 4.6% for the period from November 2011 to March 2012. This is slightly lower than the 3.6% growth for the year as a whole previously forecast by the OBR at the time of the March 2011 Budget.</li> <li>Public sector net investment in in November was £2.4bn, £0.6bn lower than was spent in November 2010. Public sector net investment between April and November 2011 has been £14.8bn, which is 23.1% lower than in the same eight months of 2010. The OBR's latest forecast was that net investment in 2011-12 would be £28.6bn, which is 25.3% below last year's level. </li></ul>