Today the Office for National Statistics and HM Treasury published Public Sector Finances October 2012. We now have details of central government receipts, central government spending, public sector net investment, borrowing and debt for the first seven months of financial year 2012–13.
Rowena Crawford, a Senior Research Economist at the IFS, said:“Today’s figures will likely result in an unpleasant feeling of déjà vu for the Chancellor as he prepares for next month’s Autumn Statement. As was the case last year, a worse-than-expected decline in corporation tax receipts in October has contributed to an overall picture of lower-than-expected growth in revenues so far this year. Spending on the administration and delivery of public services has also again grown more slowly so far than forecast for the year as a whole.”
“Last year the level of underspending was sufficient to offset the lower than forecast growth in revenues at this point in the year, leaving borrowing looking broadly on course to meet the previous forecast. However, this year the potential spending undershoot looks to be able to offset only partially the weaker–than−expected receipts. If the trends in central government receipts and non-investment spending were to continue for the remainder of 2012−13, borrowing would come in £13 billion higher than forecast by the Office for Budget Responsibility in March.”
- Central government current receipts in October were 1.8% higher than in the same month last year. Receipts over the seven months April to October 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 October was 7.3% higher than in the same month last year. Spending over the first seven months of 2012−13 was 2.3% higher than over the first seven months 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 October was £1.9 billion, £0.4 billion more than was spent in October last year. Together, public sector net investment during the first seven months of 2012–13 has been £10.4 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 4.5% higher (£0.5 billion more) than was spent over the same period in 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.