- The public sector surplus on current budget was£13.2bn
- Public sector net borrowing was minus£12.2bn
- At the end of January public sector net debt outstanding was£336.2bn, equivalent to 37.4 per cent of gross domestic product
January's tax receipts include annual mainstream corporation tax
payments from companies with accounting years to end-March, plus
quarterly instalment payments of tax from large companies.
Income tax and capital gains tax receipts in January include
half-yearly payment of tax under self-assessment.
February may include some income tax and capital gains tax receipts
under self-assessment that were due in January but have not been
recorded until February.
LIST OF TABLES
1. Public sector: Surplus on current budget, net investment, net
borrowing, net debt£bn and per cent GDP.
2. Net borrowing by sector.
3. Central government accrued determinants.
4. Net cash requirement by sector.
5. Reconciliation of public sector net borrowing and net cash
6. Central government net cash requirement determinants.
7. Net borrowing, net cash requirement, net debt year to date and net
debt as a percentage of GDP.
1. On 19 January 1999 the ONS published a guide to monthly public
sector finance statistics. It explains the concepts and measurement
of the monthly data previously published, and gives some long runs of
historical data. It is number 12 in the GSS methodological guide
series, ISBN 1 85774 296 6, and is available from the ONS Direct,
Room D140, Government Buildings, Cardiff Road, Newport, NP9 lXG
telephone 01633 812078. These background notes explain the new
2. The surplus on current budget is defined as net saving, plus
receipts of capital taxes, from national accounts under the European
System of Accounts 1995 (ESA95). It is the key measure for assessing
progress against the golden rule, one of the government's two strict
fiscal rules. This states that, on average over the economic cycle,
the goveernment should borrow only to invest and not to fund current
expenditure. So to accord with the rule, the average surplus on
current budget over the cycle should be positive.
3. Net investment minus the surplus on current budget gives net
borrowing. Procedures for calculating net borrowing are discussed in
the methodological guide. The surplus on current budget is obtained
by subtracting net borrowing from an estimate of net investment. For
central govemment this is checked against some monthly data for some
current and capital transactions.
4. Net investment is defined as investment less depreciation.
Investment is capital formation (acquisition of fixed assets, stocks
and valuables net of any sales) plus payments of capital grants less
receipts of capital grants. Data sources are: Capital expenditure:
for central government new procedures have been established to
collect capital expenditure monthly from departments within a
timetable needed for publication in this First Release. For local
government, monthly capital expenditure data are not available, so
estimates are made based on local government's view of its expected
capital expenditure for the year, updated by actual quarterly outturn
data, and monthly information on asset sales. For public corporations
there is a mixture of reported monthly capital expenditure figures
and estimates. Depreciation: depreciation is derived from a model
that uses assumptions about asset lives and a rolling estimate of the
public sector's stock of capital assets derived from capital
expenditure data. The figures are reasonably stable through time so
adequate monthly figures can be estimated consistent with the model's
expected quarterly outputs.
5. Public sector net debt consists of the public sector's financial
liabilities at face value minus its liquid assets - mainly foreign
exchange reserves and bank deposits. Net debt in this First Release
is calculated from the latest available measurement of the stock of
public sector financial liabilities and liquid assets, and then adds
the change in total net debt since then implied by the public sector
net cash requirement. This method is refined by taking account of
some other adjustments such as revaluations of the foreign exchange
reserves due to currency exchange rate movements, and
discounts/premia on the nominal price of debt
6. Public sector net debt is the key measure for assessing progress
against the Government's other strict fiscal rule, the sustainable
investment rule. This requires that public sector net debt, as a
proportion of GDP will be held over the economic cycle at a stable
and prudent level. The GDP figure used here is GDP for the 12 months
centred on when the debt is measured. Hence this requires an estimate
of GDP to be available covering the period from six months before to
six months after. An entirely mechanical procedure is used to derive
GDP figures for those periods where national accounts outturn data
are not available, and to produce monthly GDP figures. The procedure
computes the quarterly growth rate implied by Treasury's last
published forecasts of financial year money GDP, and applies those
growth rates to the latest quarterly GDP figure published by ONS.
Monthly figures are derived by dividing the quarters by three.
7. Net borrowing is consistent with the definitions in (ESA95).
Public sector net borrowing (PSNB) is the Government's preferred
measure of the short term impact of fiscal policy on the economy
8. From March 2000, general government net borrowing on an (ESA95)
basis, as shown in this First Release basis will be reported to the
European Commission under the requirements of the Maastricht Treaty.
(It was previously reported on an ESA79 basis).
9. The Current and capital accounts for each of the three sectors
shown here are available quarterly. These appear in Public Sector
Accounts which is published with national accounts about 12 weeks
after the end of the latest quarter reported and Provisional Public
Sector Accounts which is published about 8 weeks after the end of the
latest quarter reported. Presentations of public sector finances
also appear in Financial Statistics.
10. The Pre-Budget Report, (published by HM Treasury 9 November 1999)
gave the following forecasts for the financial year 1999-2000:
- public sector surplus on current budget: #8.5 billion (#9.5 billion
excluding windfall tax receipts and associated spending)
- public sector net borrowing: minus #2.1 billion, (minus #3.5
billion excluding windfall tax receipts and associated spending);
- public sector net debt: 38.2 per cent of GDP;
These forecasts will be updated on 21 March 2000 in the Budget
Table B16 in the Pre-Budget Report gives a forecast of the components
of net borrowing and the surplus on current budget, using the same
ESA95 concepts and definitions as in this First Release.
11. Figures in this First Release are not seasonally adjusted.
12. Data underlying the graphs in the first release are available on
request from the ONS.
13. The data in this First Release may be obtained in computer
readable form via the ONS Databank service, which provides
macro-economic time series data on magnetic tape or disk. Details of
the service offered and the Schedule of Charges may be obtained from:
The ONS Sales Office, Office for National Statistics, B 1/06,1
Drummond Gate, London SWlV 2QQ (telephone 020-7533 5675).