Public sector finances, UK: April 2024

• Borrowing – the difference between public sector spending and income – was £20.5 billion in April 2024, the fourth highest April borrowing since monthly records began in 1993.

• Borrowing in April 2024 was £1.5 billion more than in April 2023 and £1.2 billion more than the £19.3 billion forecast by the Office for Budget Responsibility (OBR).

• Public sector receipts grew by £1.6 billion compared with April 2023, however, this growth was outstripped by a £3.1 billion increase in spending over the same period.

• Since our March 2024 publication, we have increased our initial estimate of borrowing in the financial year ending March 2024 by £0.8 billion to £121.4 billion, now £7.3 billion more than the £114.1 billion forecast by the OBR.

• Public sector net debt excluding public sector banks (debt) at the end of April 2024 was provisionally estimated at 97.9% of gross domestic product (GDP); this was 2.5 percentage points more than at the end of April 2023, and remains at levels last seen in the early 1960s.

• Excluding the Bank of England, debt was 89.9% of GDP, 8.0 percentage points lower than the wider debt measure.

• Public sector net worth excluding public sector banks was in deficit by £703.4 billion at the end of April 2024, a £93.5 billion larger deficit than at the end of April 2023.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £18.3 billion in April 2024, £0.5 billion less than in April 2023.

The public sector spent more than it received in taxes and other income in April 2024, requiring it to borrow £20.5 billion. This was £1.5 billion more than in April 2023 and the fourth highest April borrowing since monthly records began in 1993, behind those of the coronavirus (COVID-19) pandemic in 2020 and 2021, and that of 2012 when the Royal Mail pension scheme was transferred into the public sector.

A breakdown of net borrowing by subsector and a summary of central government receipts and expenditure data are presented in Tables 1 to 3 in our Public sector finances summary tables: Appendix M dataset.

Central government borrowing

Central government forms the largest part of the public sector and includes HM Revenue and Customs, the Department of Health and Social Care, the Department for Education, and the Ministry of Defence.

The relationship between central government’s receipts and expenditure is an important determinant of public sector borrowing. In April 2024, central government borrowed £34.2 billion, £3.1 billion more than in April 2023.

Central government receipts

Central government’s receipts were £77.4 billion in April 2024, £1.2 billion more than in April 2023. Of this £1.2 billion increase in revenue:

• central government tax receipts increased by £2.2 billion to £59.4 billion, with increases in Income Tax, Corporation Tax and Value Added Tax (VAT) receipts of £0.9 billion, £0.7 billion and £0.5 billion, respectively

• compulsory social contributions (largely National Insurance contributions) decreased by £1.5 billion to £12.7 billion, largely because of the reductions in the main rates of National Insurance in 2024

A detailed breakdown of central government income is presented in our Public sector current receipts: Appendix D dataset.

Central government expenditure

Central government’s total expenditure was £111.7 billion in April 2024, £4.4 billion more than in April 2023. Of this £4.4 billion increase in spending:

• net social benefits paid by central government increased by £2.1 billion to £27.1 billion, largely because of inflation-linked benefits uprating

• central government departmental spending on goods and services increased by £2.0 billion to £33.4 billion, as inflation increased running costs

• central government net investment increased by £3.4 billion to £19.5 billion, in part because of a regular payment of £11.4 billion from HM Treasury to the Bank of England Asset Purchase Facility Fund, which are public sector net borrowing neutral; however, these central government transactions do affect our public sector net borrowing excluding the Bank of England (PSNB ex BoE) measure 

• subsidies paid by central government decreased by £1.6 billion to £2.2 billion, largely because of the closure of the energy support schemes that remained active until June 2023

• interest payable on central government debt decreased by £1.7 billion to £8.6 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index

Interest payable on central government debt

In April 2024, the interest payable on central government debt was £8.6 billion, the highest monthly payable for 10 months.

The large month-on-month increases in the Retail Prices Index (RPI) since early 2021 led to substantial increases in debt interest payable, with the largest three months on record occurring in 2022 and 2023. The additional interest caused by RPI inflation is described as “capital uplift” and affects the value of the gilt principal.

Capital uplift was £4.7 billion in April 2024, reflecting the 0.8% increase in the RPI between January and February 2024. This increased the capital uplift on the three-month lagged index-linked gilts (as shown on the UK Debt Management Office website), which make up around three-quarters of the index-linked gilt stock.

A monthly time series of capital uplift on the index-linked gilts in issue is available as series identifier code JNYY. This series is illustrated as the blue portion of each bar in Figure 2 and excludes the uplift payable at the time of an index-linked gilt redemption. These redemption payments are already recorded as accrued interest payable across the life of each index gilt.

For further details of our approach, see our Calculation of interest payable on government gilts methodology.

Our second provisional estimate for the total borrowed in the financial year ending (FYE) March 2024 is £121.4 billion, £0.8 billion more than our initial estimate published in the March 2024 release.

We now estimate that borrowing in the FYE March 2024 was £6.4 billion less than the £127.9 billion borrowed in the FYE March 2023 but £7.3 billion more than the £114.1 billion forecast by the Office for Budget Responsibility (OBR).

Public sector borrowing consists of two broad components: the current budget deficit (or borrowing to fund day-to-day activities) and net investment (capital expenditure).

In the FYE March 2024, the public sector current budget deficit was £51.4 billion, £30.6 billion less than in the FYE March 2023.

Compared with the annual value of the UK’s economy, the current budget deficit in the FYE March 2024 was provisionally estimated at 1.9% of the UK’s gross domestic product (GDP), 1.3 percentage points less than in the FYE March 2023.

Of the £121.4 billion borrowed by the public sector (excluding public sector banks) in the FYE 2024, central government borrowed £142.5 billion. This was partially offset by a £20.8 billion Bank of England (BoE) surplus and balanced by remaining subsectors.

The borrowing of both subsectors is affected by payments totalling £44.5 billion made by central government to the BoE over the last 12 months under its Asset Purchase Facility Fund (APF) indemnity agreement.

As with similar intra-public sector transactions, these payments are public sector borrowing neutral. They increase central government’s borrowing by £44.5 billion compared with the same period the previous year but reduce the borrowing impact of the BoE by an equal and offsetting amount.

Central government receipts

In the FYE 2024, central government’s income was £997.5 billion, an increase of £57.1 billion compared with the FYE 2023. Of this £57.1 billion increase in revenue:

• central government tax receipts increased by £51.2 billion to £755.1 billion, with Income Tax, Corporation Tax and Value Added Tax receipts increasing by £23.6 billion, £13.9 billion and £11.4 billion, respectively

• compulsory social contributions (largely National Insurance contributions) increased by £1.1 billion to £179.8 billion

A detailed breakdown of central government income is presented in our Public sector current receipts: Appendix D dataset.

Central government expenditure

This increase in income was exceeded by a £73.5 billion increase in total expenditure, which rose to £1,139.9 billion over the same 12-month period. Of this £73.5 billion increase in spending:

• net investment spending increased by £59.0 billion to £122.8 billion, largely because of a £39.5 billion increase in payments to the APF (which reduce BoE borrowing) and a £10.0 billion capital receipt from the household sector in December 2022 caused by an exceptional update to the value of the UK government’s student loans book

• net social benefits paid by central government increased by £36.7 billion to £291.3 billion, largely because of inflation-linked benefits uprating and cost-of-living payments (explained in GOV.UK guidance)

• central government departmental spending on goods and services increased by £33.3 billion to £405.9 billion, as inflation increased running costs

• subsidies paid by central government reduced by £21.0 billion to £32.3 billion, largely because of the reduction in energy support costs, the bulk of which were paid between October 2022 and June 2023

• payments recorded under central government “other current grants” reduced by £16.3 billion to £21.1 billion, partly because of a Cost-of-Living Council Tax Rebate (of £3.2 billion) paid to households during April 2022 and partly because of energy support payments made to households (of £1.9 billion a month) during the second half of the financial year ending March 2023

• interest payable on central government debt reduced by £29.3 billion to £78.3 billion, largely because of a slowing of the month-on-month growth in the Retail Prices Index

Expressing borrowing as a ratio of gross domestic product (GDP – the value of the output of the economy in a 12-month period) gives an estimate of its affordability and provides a more robust measure for comparison of the UK’s fiscal position over time.

Our second provisional estimate for the total borrowed in the financial year ending (FYE) March 2024 as a ratio of GDP is 4.5%, 0.1 percentage points higher than our initial estimate of 4.4% published in the March 2024 release.

This change was in part a result of a £0.8 billion increase to our estimate of borrowing in the FYE March 2024 and in part because of an update to our estimate of GDP to include the latest estimates published on 10 March 2024.

Our article, The use of gross domestic product (GDP) in public sector fiscal ratio statistics, describes the methodology used for the presentation of our GDP ratios.

The public sector balance sheet describes its financial position at a point in time. It shows its liabilities (amounts owed) and its assets (amounts owned).

There are several measures of the public sector balance sheet that we discuss in our What the UK government owns and what it owes blog.

Table 3 presents the narrowest balance sheet measure, which is the redemption value of central government gilts. It then builds upon this measure, widening coverage by both the subsector and the range of asset and liability types included to reach the far wider measure of public sector net worth, which we explain in our Wider measures of the public sector balance sheet: public sector net worth methodology.

Our Public sector balance sheet tables: Appendix N presents a detailed reconciliation between the balance sheet measures summarised in Table 2.

Public sector net debt

The most widely used balance sheet measure used to describe the UK public sector’s financial position at a point in time is public sector net debt excluding public sector banks (PSND ex). Expressing net debt as a ratio of gross domestic product (GDP) gives an estimate of its affordability and provides a more robust measure for comparison of the UK’s fiscal position over time.

The net debt-to-GDP ratio at the end of April 2024 was provisionally estimated at 97.9%, 2.5 percentage points higher than a year ago. However, this is a highly provisional estimate and is likely to be revised in future publications because it partly relies on GDP estimates based on the March 2024 Office for Budget Responsibility forecast.

Public sector net debt excluding the Bank of England (BoE) was £2,468.6 billion at the end of April 2024, or around 89.9% of GDP, £218.9 billion (or 8.0 percentage points of GDP) less than the wider measure. This difference is largely a result of the BoE’s quantitative easing activities, including the gilt-purchasing activities of the Asset Purchase Facility (APF) Fund.

The APF’s gilt holding is not recorded directly as a component of public sector net debt. Instead, in April 2024, we record the £101.5 billion difference between the £703.2 billion of reserves created to purchase its gilts (at market value at the time of purchase) and their £601.7 billion redemption value. For details of the BoE’s contribution to public sector net debt, see Table PSA9A of our Public sector finances tables 1 to 10: Appendix A dataset.

As of April 2024, the APF no longer holds any corporate bonds, and this aspect of the scheme has now closed.

Public sector net worth

Public sector net worth excluding public sector banks (PSNW ex) was in deficit by £703.4 billion at the end of April 2024. This compares with a £609.9 billion deficit at the end of April 2023.

The £93.5 billion reduction in PSNW ex over the last 12 months was largely because of a £144.8 billion increase in debt (PSND ex), partly offset by a £43.2 billion increase in public sector non-financial assets.

If we exclude the public sector’s £1,595.7 billion of non-financial assets, public sector net financial worth excluding public sector banks (PSNFW ex) deteriorated by £136.6 billion over the same period to a deficit of £2,299.1 billion.

PSNFW ex is equivalent to public sector net financial liabilities excluding public sector banks (PSNFL ex), shown in Table 2 but expressed with the reverse sign.

The data for the latest months of every release contain a degree of forecasts. Subsequently, these are replaced by improved estimates, as further data are made available, and finally by outturn data.

Tables 4 to 6 of our Public sector finances summary tables: Appendix M dataset compare our latest public sector finances data with those in our Public sector finances, UK: March 2024 release, published on 23 April 2024, and highlight the revisions to borrowing by subsector, with additional detail for central government receipts and expenditure.

Our Public sector finance revisions analysis: Appendix P dataset records monthly borrowing data as at first and at subsequent publications, graphically illustrating any potential bias to our early estimates.

Revisions to public sector net borrowing (PSNB ex) in the financial year ending March 2024

This release presents the second provisional estimate of UK public sector finances for the financial year ending (FYE) March 2024; these are not final figures, and they will be revised over the coming months as we replace our initial estimates with provisional and then final outturn data.

Since publishing our Public sector finances, UK: March 2024 release, we have increased our estimate of borrowing in the FYE March 2024 by £0.8 billion to £121.4 billion. This change was largely the result of updated central government data replacing our previous estimates.

Our estimate of central government receipts remains largely unchanged from that published last month, reducing by only £0.2 billion. Though we have reduced our previous estimate of total central government tax receipts for the last 12 months by £1.6 billion, this decrease was largely offset by increases in other income, including an update to our estimate of dividend receipts from the NatWest Group of £0.6 billion.

This month we have increased our estimate of total central government spending in the FYE March 2024 by £1.7 billion. This change is spread across several spending categories, including an increase of £0.5 billion to our estimate of current grants paid to local authorities. This update reduced our estimate of local government borrowing by an equal and offsetting amount.

Revisions to public sector net debt (PSND ex) at the end of March 2024

Since publishing our Public sector finances, UK: March 2024 release, our estimate of debt at the end of March 2024 remains largely unchanged, increasing by £0.1 billion to £2,694.3 billion. This change was largely because of regular updates to our local government data.

Revisions to gross domestic product

We have updated our previous estimate of gross domestic product (GDP) for the final quarter of the FYE March 2024 with that published in our GDP first quarterly estimate, UK: January to March 2024 release (10 May 2024). This replaces our previous estimate, which was based on the Office for Budget Responsibility’s forecast growth of GDP and used as the denominator in our presentation of debt (along with net borrowing, current budget deficit and net investment) as a proportion of GDP.

Given that the published GDP figure for the final quarter of the FYE 2024 was marginally more than our initial estimate, this month our headline ratios remain largely unchanged.

Revisions to public sector net debt including public sector banks’

Estimates of the public sector banks’ impact on the public sector finances are supplied to us by the Bank of England twice annually.

This month we have received balance sheet data covering the period July to December 2023 for the first time, enabling us to update previous estimates of the inclusive measure of public sector net cash requirement (PSNCR) and debt (PSND). Further, our own estimates covering the period January 2024 to date have been updated to reflect this new information. As a result of receiving these data, our estimate of PSND at the end of March 2024 has increased by £13.4 billion to £3.1 trillion.

Public sector

In the UK, the public sector consists of six subsectors: central government, local government, public non-financial corporations, public sector funded pensions, the Bank of England (BoE), and public financial corporations (or public sector banks). The figures presented in this release exclude public financial corporations unless otherwise noted.

Public sector current budget deficit

Public sector current budget deficit (PSCB) is the gap between current expenditure and current receipts on an accruals basis, having taken account of depreciation. The current budget is in surplus when receipts are greater than expenditure and is indicated with a negative sign.

Public sector net borrowing

Public sector net borrowing (PSNB) is the gap between total expenditure and current receipts on an accruals basis. If receipts exceed expenditure, this is referred to as a surplus and is indicated with a negative sign. Borrowing is often referred to by commentators as “the deficit”.

Public sector current budget deficit and net borrowing are measured on an accruals basis, where transactions for revenue are recorded when earned and expenses are recorded when incurred, rather than when the bills are paid (on a cash basis).

Central government net cash requirement

The central government net cash requirement (CGNCR) represents the cash needed to be raised from the financial markets over a period to finance its activities. The amount of cash required will be affected by changes in the timing of payments to and from the public sector, rather than when these liabilities were incurred.

Public sector net debt

Public sector net debt (PSND) represents the amount of money the public sector owes to the private sector and overseas (in the form of loans, debt securities, deposit holdings and currency), net of liquid financial assets held.

Public sector net debt is often referred to by commentators as “the national debt”.

Public sector net financial liabilities

Public sector net financial liabilities (PSNFL) are a wider measure of the balance sheet than public sector net debt and includes all financial assets and liabilities recognised in the national accounts.

Public sector net worth

Public sector net worth (PSNW) is the widest measure of the balance sheet, broadening the PSNFL measure by considering the public sector’s non-financial assets.

Comparing our data with official forecasts

The independent Office for Budget Responsibility (OBR) is responsible for the production of official forecasts for the UK government. These forecasts are usually produced twice a year, in spring and autumn. The latest forecast was published in the OBR’s Economic and fiscal outlook – March 2024 report.

Each month on the same day as the Office for National Statistics (ONS) release, the OBR publishes a brief analysis of the latest public sector finances in its Monthly public finances release. Additionally, the OBR has published an article providing A brief guide to the public finances.

Public sector banks

Unless otherwise stated, the figures quoted in this release exclude public sector banks, currently only the NatWest Group (NWG), formerly the Royal Bank of Scotland (RBS) Group.

The reported position of debt, and to a lesser extent borrowing, would be distorted by the inclusion of NWG’s balance sheet (and transactions). This is because the government does not need to borrow to fund the debt of NWG, nor would surpluses achieved by NWG be passed on to the government, other than through any dividends paid as a result of the government equity holdings.

Methodology guides

To supplement this release, we publish an accompanying methodological guide and Quality and Methodology Information outlining the strengths, limitations, and appropriate uses of government finance statistics.

In addition, we explain the recording of interest payable to holders of UK government gilts in the UK public sector finances in our articles The calculation of interest payable on government gilts (8 July 2022) and The use of gross domestic product (GDP) in public sector fiscal ratio statistics (21 September 2016).

Tax receipts

In the most recent months, tax receipts recorded on an accrued basis are subject to some uncertainty. This is because many taxes such as Value Added Tax (VAT), Corporation Tax, and Pay As You Earn Income Tax contain some forecast cash receipts data and are liable to revision when actual cash receipts data are received.

The forecasts underlying our current tax estimates reflect the expectations published by the Office for Budget Responsibility (OBR) Economic and fiscal outlook – March 2024 report.

Local government and public corporations

Local government and public corporations’ data for the financial year ending (FYE) March 2025 are initial estimates, largely based on the OBR’s Economic and fiscal outlook – March 2024 report, with adjustments being applied as needed.

In recent years, planned local government expenditure initially reported in local authority budgets has been systematically lower than final outturn current expenditure reported in the audited accounts, and higher than that reported in final outturn capital expenditure. We therefore include adjustments to increase or decrease the amounts reported at the budget stage.

For the FYE March 2024, we include:

• a £3.0 billion upward adjustment to England’s current expenditure on goods and services

• a £0.5 billion downward adjustment to Wales’s capital expenditure

• a £0.5 billion downward adjustment to Scotland’s capital expenditure

We apply a further £1.3 billion downward adjustment to budget data for current expenditure on benefits in the FYE 2024, to reflect the most recently available data for housing benefits.

Data for public corporations in the FYE 2024 remain largely based on the OBR’s Economic and fiscal outlook – November 2023 report, although supplemented by in-year data replacing previous estimates for train operating companies, the Housing Revenue Account and surveyed public corporations.

We will update our estimates for local government and for public corporations to reflect the OBR’s Economic and fiscal outlook – March 2024 report in our next release published on 21 June 2024.