Recent and upcoming changes to public sector finance statistics: September 2022

Most methodological changes to the public sector finance (PSF) statistics are prompted by the need for statistics to keep pace with the evolving economy. These changes can alter perceptions of the government's fiscal exposure, as measured by the fiscal aggregates, such as public sector net borrowing (PSNB), or public sector net debt (PSND). This article increases transparency around the methodology work, including the classification reviews that are currently underway.

In September 2022, several methodological changes were implemented in the Public sector finances (PSF). The changes included improvements to public corporations' data, the recording of central government leases, and the treatment of national non-domestic rates. More information on these changes can be in last month's Recent and Upcoming Changes to Public Sector Finances article.

Cost of energy policy announcements

In 2022, the UK Government has announced several plans to manage the cost of energy for households and business across the UK.

Energy Bills Support Scheme

The Energy Bills Support Scheme (EBSS) is a government scheme giving households in Great Britain (with a domestic electricity contract) £400 towards the cost of their energy bills.

On 31 August 2022, the Office for National Statistics (ONS) announced that the EBSS has been classified as a current transfer payment from government to households. For more information, see our Energy Bills Support Scheme classification.

This additional central government expenditure will increase public sector net borrowing over a six-month period between October 2022 and March 2023.

Energy Price Guarantee schemes and Alternative Fuel Payment Scheme

In September 2022, the UK government announced a number of new plans to manage the cost of energy for households and businesses across the UK.

For households, the UK government announced the Energy Price Guarantee. This aims to limit the amount charged per unit of gas or electricity used by households. The consumer saving will depend on usage, but on average a typical household will pay around £2,500 a year for its energy under this scheme, which is expected to be active from 1 October 2022 to April 2023. The government will compensate the energy companies for the savings delivered to households.

The equivalent support scheme for businesses and non-domestic properties was announced as the Energy Bill Relief Scheme. This scheme will provide a discount on gas and electricity unit prices and the UK government will compensate the suppliers for this reduction. This is intended to run for six months, with a review after the first three months, to consider more targeted support for vulnerable industries.

The UK government also gave details in October on the Alternative Fuel Payment scheme, which provides support to UK households and non-domestic customers not on the mains gas grid. This scheme is intended to provide a one-off £100 payment to all of these customers.

The Office for National Statistics (ONS) plans to review and classify these support measures and to publish our decisions on 31 October 2022, in the Public sector classification guide and forward work plan.

Energy Markets Financing Scheme

An Energy Markets Financing Scheme was also announced by the UK government, a joint scheme between HM Treasury and the Bank of England. The scheme opened on the 17 October 2022 and is expected to run until 27 January 2023, as reported in the Bank of England's announcement.

This scheme aims to address liquidity issues faced by energy firms operating in the UK wholesale gas and electricity markets, by providing short term financial support.

The ONS will review and classify this scheme in due course.

Energy Profits Levy 

On 26 May 2022, the UK government announced a new levy on the profits of oil and gas companies in the UK and the UK Continental Shelf, intended to help fund cost-of-living support. The ONS has classified this levy as a tax on the profits of oil and gas companies operating in the UK and the UK Continental Shelf. This was implemented in this month's Public sector finances. Energy Profits Levy receipts are recorded as a sub-component of Corporation Tax, increasing our previously published estimates by £0.7 billion each month from June to date on an accrued basis.