|Date:||19 July 2013|
|Authors:||Rowena Crawford and Soumaya Keynes|
Today the Office for National Statistics and HM Treasury published Public Sector Finances June 2013. We now have details of central government receipts, central government spending, public sector net investment, borrowing and debt for the first three months of financial year 2013–14.
Rowena Crawford, a Senior Research Economist at the IFS, said:
“Today’s figures add to a complicated picture. Both receipts and spending by central government have grown more rapidly so far this year than was forecast by the Office for Budget Responsibility for the year as a whole, but both are affected by timing changes. Spending by central government includes transfers to local government, which have been much more frontloaded in this financial year than previously, while particularly high income tax receipts at the start of this financial year are likely to reflect some high income individuals moving part of their income from the last tax year into the current tax year so as to benefit more from the reduction in the top rate of income tax from 50p to 45p.
These timing effects illustrate the difficulties in inferring the likely outcome for borrowing in 2013–14 from only three months’ data. That said, the government is likely to take some heart from June’s figures, which show that combined receipts from income tax, national insurance and capital gains tax grew in line with the forecast for the year as a whole. Benefit spending has also grown broadly in line with that forecast for the year, while other spending by central government, excluding that on debt interest, has grown less rapidly than forecast. However, VAT receipts were weak last month.”