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IFS - Public finance bulletin: October 2013
Yesterday the Office for National Statistics and HM Treasury published Public Sector Finances September 2013. We now have details of central government receipts, central government spending, public sector net investment, borrowing and debt for the first half of financial year 2013–14.
Rowena Crawford, a Senior Research Economist at the IFS, said:
“Today’s figures continue to suggest a relatively positive outlook for the public finances this financial year, with borrowing having grown less quickly so far this year than the Office for Budget Responsibility forecast for the year as a whole. However, in large part this is due to trends in public sector net investment and borrowing by local government and public corporations, which can be particularly volatile. Central government current receipts have grown faster over the first half of the year than forecast by the OBR for the year as a whole, and if this trend continues, receipts could come in around £9 billion higher than forecast. However, we should be cautious of reading too much into this trend, since receipts figures for early this year will have been boosted by some high income individuals pushing part of their income from last tax year into this tax year to take advantage of the reduction in the higher rate of income tax.”
Central government current receipts in September were 7.0% higher than in the same month last year. Receipts over the six months April to September were 4.6% higher than in the same months of 2012, excluding the impact of transfers related to the Asset Purchase Facility. The Office for Budget Responsibility’s (OBR’s) forecast at the time of the March 2013 Budget implied that central government current receipts for the whole of 2013–14 would be 2.8% above 2012–13 levels.
Central government current spending in September was 2.4% higher than in the same month last year. Spending over the first half of 2013–14 was 2.4% higher than over the first half of 2012–13. The OBR’s forecast at the time of the March 2013 Budget implied that central government current spending for the whole of 2013–14 would be 2.0% above 2012–13 levels.
Public sector net investment in September was £2.0 billion, £0.3 billion more than was spent in September last year. Together, public sector net investment during the first six months of 2013–14 has been £8.5 billion. This is 0.7% more than was spent during the first six months of 2012–13, excluding the impact of the transfer of assets from the Royal Mail Pension Plan to the public sector. The OBR’s forecast at the time of the March 2013 Budget predicted that net investment over the whole of 2013–14 would be £24.2 billion, which is 8.9% above last year’s level excluding the impact of Royal Mail.