This is a purely statistical note on public sector borrowing (the budget deficit), public sector debt and government debt interest payments.Jump to full report >>
The charts below show public sector net borrowing, public sector net debt and debt interest payments. Outturn figures from the Office for National Statistics (ONS) and the latest Office for Budget Responsibility (OBR) forecasts are shown.
Borrowing and debt data are available back to the 1920s the OBR’s public finances databank. The data are in the sheet called ‘Public finances since 1920’.
In September, the Office for National Statistics changed how it accounts for student loans in the official measure of government borrowing. The change – which was made so that the budget deficit better reflects the subsidy element of the loans – has added a little over £12 billion to the measure of borrowing in 2018/19. The accounting change affects the ONS’s measurement of borrowing in all years since the income contingent student loans were introduced in 1998. The impact is smaller in earlier years when fewer of the income contingent loans had been provided to students. The accounting adds around £100 million to the borrowing measure in 1999/00.
As we explained back in 2018, nothing has changed to the actual loans, nor will the underlying strength of the public finances change, but the official measure of government borrowing will increase.
The forecasts for borrowing and debt shown in this briefing are the OBR’s restated March 2019 forecasts (published on 16 December). The restated figures include ONS statistical changes from September 2019 but do not incorporate new judgements nor include an update to the economy forecast.
The ONS also made a change relating to funded public sector employment-related pension schemes and corrected corporation tax data. These changes are less significant than the student loans change: changes to pensions increase borrowing by £1.3 billion in 2018/19, while corporation tax corrections increase it by £2.6 billion. The change to pensions also reduces government debt by £28.6 billion in 2018/19.
Commons Briefing papers SN05745
Author: Matthew Keep