Public Finance Press Releases

Public finance bulletin: May 2014

Date: 22 May 2014
Authors:
Publisher: IFS

Today the Office for National Statistics and HM Treasury published Public Sector Finances April 2014. We now have details of central government receipts, central government spending, public sector net investment, borrowing and debt for the first month of financial year 2014–15 and revised outturns for the whole of financial year 2013–14.

Headline Comparisons

  • The public sector current budget in 2013–14 is now estimated to have been in deficit by £82.9bn, excluding the impact of transfers related to the Asset Purchase Facility. This is almost exactly the same as the initial estimated outturn published last month of a deficit of £82.8bn and somewhat lower than the Office for Budget Responsibility’s (OBR’s) forecast from the March 2014 Budget of a £83.7bn deficit. The OBR’s March 2014 forecast is for the public sector current budget deficit to fall to £67.6bn this financial year.
  • Public sector net borrowing in 2013–14 is now estimated to have been £107.4bn excluding the impact of transfers related to the Asset Purchase Facility, marginally lower than the initial estimated outturn published last month of £107.7bn. The OBR’s March 2014 forecast is for the public sector to borrow £95.5bn this financial year. Borrowing in April 2014 was £11.5bn, which is £1.9bn higher than in April 2013.
  • Public sector net debt at the end of 2013–14 is now estimated to have been £1,271.9bn, or 76.0% of national income. The OBR’s March 2014 forecast is that this will rise to 77.3% by the end of this financial year.
  • Central government current receipts were forecast to increase by 3.2% between 2013–14 and 2014–15 by the OBR in its March 2014 EconomicandFiscalOutlook, adjusting for the effects of the Asset Purchase Facility. This forecast growth is higher than the growth in receipts in April 2014 compared to the same month last year, which actually fell by 0.8%. This fall is largely driven by weak receipts of income and capital gains tax, most likely reflecting the fact that receipts in April 2013 were artificially boosted by individuals shifting their income to avoid the 50p tax rate that applied until the end of March 2013. With 11 months left of the financial year still to come, there is as yet little reason to think that the OBR’s forecast for the year as a whole will be incorrect.
  • Central government current spending in April was 1.0% lower than in April last year, in contrast to the 1.9% increase forecast by the OBR for the year as a whole.
  •  Public sector net investment in April was £1.3bn, the same as was spent in April 2013. The OBR’s forecast at the time of the March 2014 Budget was that net investment over the whole of 2014–15 would be £27.9bn, 13.9% above last year’s level.