Public sector finances, UK: June 2016

Public sector net borrowing (excluding public sector banks) decreased by £2.3 billion to £25.6 billion in the current financial year-to-date (April to June 2016), compared with the same period in 2015.

Public sector net borrowing (excluding public sector banks) decreased by £2.2 billion to £7.8 billion in June 2016, compared with June 2015.

Public sector net debt (excluding public sector banks) at the end of June 2016 was £1,620.7 billion, equivalent to 84.0% of gross domestic product (GDP); an increase of £47.6 billion compared with June 2015.

Central government net cash requirement decreased by £0.9 billion to £24.8 billion in the current financial year-to-date (April to June 2016), compared with the same period in 2015.

Due to the volatility of the monthly data, the cumulative financial year-to-date borrowing figures provide a better indication of the progress of the public finances than the individual months.

The data presented in this bulletin presents the latest fiscal position of the public sector as at 30 June 2016 and does not reflect any significant impact of the EU Referendum result announced on 24 June 2016. Estimates for the latest period always contain a substantial element of forecast information which currently reflect pre-referendum assumptions.

EU government debt and deficit

On 15 July 2016, we published the latest UK Government Debt and Deficit for Eurostat statistical bulletin which reported that:

• general government deficit (Maastricht borrowing) in the financial year ending March 2016 (April 2015 to March 2016) was £74.5 billion, equivalent to 4.0% of GDP
• general government gross debt (Maastricht debt) at the end of March 2016 was £1,649.2 billion, equivalent to 87.7% of GDP

Please refer to section 7, International comparisons of borrowing and debt for further detail.

Impact of foreign exchange rate movements on public sector net debt

As announced on 14 July 2016, this bulletin introduces a change to the PSND methodology in relation to the valuation of foreign currency denominated liquid assets which are “hedged” against exchange rate and price movements. In recent periods the value of these assets changed with movements in foreign currency exchange rates but the new methodology guidance states that the assets are to be valued at the sterling value ‘fixed’ through the hedging instrument.

This change in methodology follows a recommendation of the Public Sector Finances Technical Advisory Group (PSFTAG) which met to consider the issue on 6 July 2016. In light of the PSFTAG decision and given the large fall in the value of sterling in June it was decided to implement the methodology change in this month’s bulletin. More background information on the methodology change can be found in our announcement on 14 July 2016.

The change impacts equally on both public sector net debt including public sector banks (PSND) and public sector net debt excluding public sector banks (PSND ex), increasing both measures by:

• £2.7 billion at the end of March 2016
• £2.2 billion at the end of April 2016
• £1.5 billion at the end of May 2016

If hedged assets in the official reserves had continued to be valued at their sterling value based on the exchange rates at the end of June then it is estimated that both PSND and PSND ex at the end of June 2016 would have been approximately £6.5 billion lower than the figures reported in this bulletin.

This section provides a summary of the main messages of this statistical bulletin which you may find helpful. You may also like to receive Twitter updates by following @frasermunropsf. We recently published an article titled The debt and deficit of the UK public sector explained which you may also find useful.

Figure 1: The amount borrowed by the public sector has been falling since the peak in the financial year¹ ending March 2010

UK public sector borrowing, April 1993 to June 2016

Source: Office for National Statistics

Notes:

1. Financial year 2016/17 represents financial year ending 2017 (April 2016 to March 2017.
2. OBR full financial year forecast for public sector net borrowing excluding public sector banks from March 2016 Economic and Fiscal Outlook (EFO).

Download this image Figure 1: The amount borrowed by the public sector has been falling since the peak in the financial year^1^ ending March 2010

.png (35.0 kB) .xls (60.4 kB)

Public sector borrowing (or deficit)

In June 2016, the public sector spent more money than it received in taxes and other income. This meant it had to borrow £7.8 billion to balance the books.

Of this £7.8 billion, £5.4 billion related to the cost of the “day-to-day” activities of the public sector (the current budget deficit), while £2.5 billion related to the spending on infrastructure (net investment).

Annual borrowing has generally been falling since the peak in the financial year ending March 2010 (April 2009 to March 2010).

In the financial year ending March 2016 (April 2015 to March 2016), the public sector borrowed £75.3 billion. This was £16.3 billion lower than in the previous financial year. These are not final figures and may be revised over the coming months as provisional data are replaced with finalised and audited data.

Provisional estimates suggests that borrowing in the financial year ending March 2016 is less than half of that in the financial year ending March 2010 (both in terms of £ billion and percentage of GDP).

The Office for Budget Responsibility (OBR), which produces economic and fiscal forecasts for government, recorded that the public sector would borrow £72.2 billion during the financial year ending March 2016. So, based on the provisional estimate, borrowing in financial year ending March 2016 is £3.1 billion higher than OBR predicted.

OBR have estimated that the public sector will borrow £55.5 billion during the financial year ending March 2017; a reduction of £19.8 billion on the financial year ending March 2016.

Income and spending by central government

Central government’s income and spending make the largest contribution to the amount borrowed by the public sector. In the financial year ending March 2016 (April 2015 to March 2016), central government received £634.1 billion in income. This was around 3% higher than in the previous financial year, largely due to receiving more Income Tax, and National Insurance contributions, along with taxes on production such as VAT and Stamp Duty, compared with the previous year.

Over the same period (April 2015 and March 2016) central government spent £686.1 billion; roughly the same as in the previous financial year. Of this amount, just below two-thirds was spent by central government departments (such as health, education and defence), around a third on social benefits (such as pensions, unemployment payments, Child Benefit and Maternity Pay) with the remaining being spent on capital investment and interest on the government’s outstanding debt.

Debt

While deficit represents the difference between income and spending over a period of time, debt represents the total amount of money owed at a point in time. Debt has been built up by successive government administrations over many years. When the government borrows, this adds to the debt total. So reducing the deficit is not the same as reducing the debt.

The amount of money owed by the government to the private sector stood at £1.6 trillion at the end of June 2016, which equates to 84% of the value of all the goods and services currently produced by the UK economy in a year (or GDP).

Figure 2 : Public sector debt increased rapidly following the banking crisis in the financial year¹ ending March 2008

UK public sector debt, March 1994 to June 2016

Source: Office for National Statistics

Notes:

1. Financial year 2016/17 represents financial year ending 2017 (April 2016 to March 2017).

Download this image Figure 2 : Public sector debt increased rapidly following the banking crisis in the financial year^1^ ending March 2008

.png (31.2 kB) .xls (39.9 kB)

This statistical bulletin provides important information on the UK government financial position. It enables government, the public, economists and financial analysts to monitor public sector expenditure, receipts, investments, borrowing and debt. By comparing these data with forecasts from The Office for Budget Responsibility (OBR) the current UK fiscal position can be evaluated.

Table 7: Terms to help you understand this release, located in the background notes of this bulletin, is intended to provide users with the important terms needed to understand the data within this bulletin. We recently published an article titled The debt and deficit of the UK public sector explained which you may also find useful.

Headline public sector finances data

This release presents the first estimate of June 2016 public sector finances, along with the financial year-to-date, April to June 2016. While public sector finance data are available on a monthly basis, due to the volatility of the monthly time series, it is often more informative to look at the financial year-to-date or complete financial year data in order to discern underlying patterns. Estimates are revised over time as additional data becomes available.

Table 1 summarises the latest headline public sector finances measures, comparing the latest month and cumulative totals for the financial year-to-date, with the equivalent period in the previous financial year.

Time series for each component are available in Table PSA1 in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

How the public sector finances fit together

Figure 3 illustrates how the difference in income (often referred to as current receipts) and spending (often referred to as current expenditure) lead to the accumulation of debt.

The headline measures of current budget deficit, net borrowing, net cash requirement and net debt are highlighted in the diagram as they provide the important indicators for the performance of the UK public finances.

When expenditure is greater than income, the public sector runs a deficit, known as the current budget deficit. Net borrowing is made up of the current budget deficit plus net investment (spending on capital less capital receipts). The diagram shows how net borrowing contributes to the change in net debt.

The net cash requirement is closely related to net debt (the amount owed). It is important because it represents the cash needed to be raised from the financial markets to service the government’s borrowing deficit. Changes in net debt between 2 points in time are normally similar to the net cash requirement for the intervening period, though the relationship is not an exact one.

Figure 3: Changes in public sector finances (excluding public sector banks) financial year–to-date ending 2017 UK, (£ billion)

Source: Office for National Statistics

Notes:

1. Cash transactions in (non-financing) financial assets which do not impact on net borrowing.
2. Timing differences between cash and accrued data.
3. Revaluation of foreign currency debt (for example foreign currency) Debt issuances or redemptions above/below debt valuation (for example Bond premia/discounts and capital uplifts). Changes in volume of debt not due to transactions (for example Sector reclassification).

Download this image Figure 3: Changes in public sector finances (excluding public sector banks) financial year–to-date ending 2017 UK, (£ billion)

.png (116.5 kB) .xls (40.4 kB)

In the UK, the public sector consists of 5 sub-sectors: central government, local government, public non-financial corporations, Bank of England and public financial corporations (that is, public sector banks).

Table 2 summarises the current monthly and financial year-to-date borrowing position of each of these sub-sectors along with the public sector aggregates.

Full time series for these data can be found in Table PSA2 in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

Figure 4 illustrates public sector net borrowing excluding public sector banks (PSNB ex) for the last 23 financial years. For all but 3 years in the period the public sector has been in deficit and had to borrow to fund the gap between expenditure and revenue.

Figure 4: Public sector net borrowing excluding public sector banks; the financial year ending 1994 to the financial year ending 2017¹

UK, all data excluding public sector banks

Source: Office for National Statistics

Notes:

1. Financial year 2016/17 represents financial year ending 2017 (April 2016 to March 2017).
2. OBR full financial year forecast for public sector net borrowing excluding public sector banks from March 2016 Economic and Fiscal Outlook (EFO).

Download this image Figure 4: Public sector net borrowing excluding public sector banks; the financial year ending 1994 to the financial year ending 2017^1^

.png (37.0 kB) .xls (62.5 kB)

PSNB ex peaked in the financial year ending March 2010 (April 2009 to March 2010) as the effects of the economic downturn impacted on the public finances (reducing tax receipts while expenditure continued to increase).

In the financial year ending March 2016 (April 2015 to March 2016), the public sector borrowed £75.3 billion. This was £16.3 billion lower than in the previous financial year. These are not final figures and may be revised over the coming months as provisional data are replaced with finalised and audited data.

This provisional estimate suggests that borrowing in the financial year ending March 2016 is less than half of that in the financial year ending March 2010; both in terms of £ billion (Table PSA2) and percentage of GDP (Table PSA5A).

PSNB ex has reduced since financial year ending March 2010, although remained higher than before the financial year ending March 2008 (April 2007 to March 2008) and the 2007 global financial market shock.

PSNB ex in the financial year ending March 2013 (April 2012 to March 2013) was higher than in the previous financial year largely as a result of the recording of an £8.9 billion payable capital transfer in April 2012, as recognition that the liabilities transferred from the Royal Mail Pension Plan exceeded the assets transferred.

Net borrowing for the financial year-to-date (April to June 2016)

Due to the volatility of the monthly data, the cumulative financial year-to-date borrowing figures provide a better indication of the progress of the public finances than the individual months.

In the financial year-to-date (April to June 2016), public sector net borrowing excluding public sector banks (PSNB ex) was £25.6 billion; an decrease of £2.3 billion, or 8.3% compared with the same period in 2015.

In this period, there was a £2.3 billion decrease in central government net borrowing, along with a £0.2 billion decrease in the net borrowing of public corporations and a £0.2 billion increase (or decrease in surplus) in local government net borrowing.

Central government receipts for the financial year-to-date (April to June 2016) were £152.2 billion, an increase of £4.9 billion, or 3.3%, compared with the same period in the previous financial year. Of which:

• Social (National Insurance) Contributions increased by £2.4 billion, or 8.6%, to £30.3 billion
• Income Tax-related payments increased by £1.0 billion, or 2.9%, to £35.7 billion
• VAT receipts increased by £0.4 billion, or 1.3%, to £32.1 billion
• Stamp Duty on land & property increased by £0.4 billion, or 15.0%, to £3.0 billion
• Corporation Tax increased by £0.2 billion, or 1.6%, to £9.6 billion

Central government expenditure (current and capital) for the financial year-to-date (April to June 2016) was £177.2 billion, an increase of £2.2 billion, or 1.3%, compared with the same period in the previous financial year. Of which:

• central government net investment (capital expenditure) increased by £2.3 billion, or 32.3%, to £9.4 billion; largely as a result of an increase in gross capital formation and transfers between central government and other sectors
• net social benefits (mainly pension payments) increased by £0.4 billion, or 0.9%, to £51.0 billion; largely as a result of increases in state pension payments (within National Insurance Fund benefits)
• debt interest decreased by £0.1 billion, or 0.5%, to £13.3 billion; of this £13.3 billion, £3.5 billion is the interest payable to the Bank of England Asset Purchase Facility on its gilt holdings (see Table PSA9 in Table PSA1 in the Public Sector Finances Tables 1 to 10: Appendix A dataset) which are PSNB ex neutral
• other current expenditure (mainly departmental spending) decreased by £0.5 billion, or 0.5%, to £103.4 billion; largely as a result of increases in departmental spending on goods & services, being offset by decreases in transfers to local government and contributions to the EU

Local government net borrowing (LGNB) for the financial year-to-date (April to June 2016) was estimated to be in surplus of £5.7 billion, a £0.2 billion decrease in surplus on the same period in the previous financial year. This decrease in surplus was largely due to decreases in grants received from central government, particularly in April, being partially offset by decreases in expenditure on goods & services.

Local government data for April to June 2016 are initial estimates. Most of the components are calculated by the Office for National Statistics (ONS) based on Office for Budget responsibility (OBR) forecasts. Administrative source data are used for central government to local government transfers.

Detailed time series for each of the expenditure and revenue component series of local government net borrowing are presented in Tables PSA6G to 6K in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

Public corporations’ net borrowing (PCNB) for the financial year-to-date (April to June 2016) was estimated to be £0.6 billion, a decrease of £0.2 billion on the same period in the previous financial year.

Public corporations data for April to June 2016 are provisional estimates calculated by ONS based on OBR forecasts.

Net borrowing in June 2016

In June 2016, public sector net borrowing excluding public sector banks (PSNB ex) was £7.8 billion; a decrease of £2.2 billion, or 21.8% compared with June 2015.

This decrease in borrowing was largely due to a decrease (or increase in the surplus) both in central and local government net borrowing of £1.1 billion and £1.0 billion respectively.

The data for the latest month of every release contains some forecast data. The initial outturn estimates for the early months of the financial year contain more forecast data than other months, as profiles of tax receipts and departmental spending on OSCAR and local government spending are provisional. This means that the data for these months are typically more prone to revision than other months and can be subject to sizeable revisions in later months.

Central government receipts in June 2016 were £49.0 billion, an increase of £2.0 billion, or 4.2%, compared with June 2015. Of this:

• Social (National Insurance) Contributions increased by £1.0 billion, or 11.1%, to £10.4 billion
• Income Tax-related payments increased by £0.7 billion, or 6.3%, to £12.2 billion
• VAT receipts increased by £0.2 billion, or 1.8%, to £10.8 billion
• Corporation Tax increased by £0.1 billion, or 4.6%, to £1.9 billion

Central government expenditure (current and capital) in June 2016 was £58.5 billion, an increase of £0.7 billion, or 1.3%, compared with June 2015. Of this:

• other current expenditure (mainly departmental spending) increased by £1.2 billion, or 3.5%, to £35.2 billion; largely as a result of an increase in departmental spending on goods & services, current transfers to local government and transfers paid abroad
• central government net investment (capital expenditure) increased by £0.4 billion, or 13.6%, to £2.9 billion; largely as a result of increases in gross capital formation and capital transfers from central government to other sectors
• net social benefits (mainly pension payments) was £16.7 billion, equivalent to that paid in June 2015
• debt interest in June 2016 decreased by £0.8 billion, or 19.0%, to £3.6 billion; of this £3.6 billion, £1.2 billion is the net interest paid to the Asset Purchase Facility Fund (APF) on its gilt holdings (see Table PSA9 in the Public Sector Finances Tables 1 to 10: Appendix A dataset) which are PSNB ex neutral

Detailed time series for each of the expenditure and revenue component series of central government net borrowing are presented in Tables PSA6B to 6F in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

In June 2016, local government net borrowing (LGNB) was estimated to be in surplus by £2.5 billion; an increase in surplus of £1.0 billion compared with June 2015.

Local government data for June 2016 are initial estimates. Most of the components are calculated by ONS based on OBR forecasts. Administrative source data are used for central government to local government transfers.

Detailed time series for each of the expenditure and revenue component series of local government net borrowing are presented in Tables PSA6G to 6K in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

In June 2016, it was estimated that public corporations’ net borrowing (PCNB) was £0.2 billion, a decrease of £0.1 billion compared with June 2015.

Public corporations data for June 2016 are provisional estimates calculated by ONS based on OBR forecasts.

Public sector net debt excluding public sector banks (PSND ex) represents the amount of money the public sector owes to UK private sector organisations and overseas institutions, largely as a result of government financial liabilities on the bonds (gilts) and Treasury bills it has issued.

While deficit represents the difference between income and spending over a period of time, debt represents the total amount of money owed at a point in time. This debt has been built up by successive government administrations over many years. When the government borrows (that is, runs a deficit), this adds to the debt total. So reducing the deficit is not the same as reducing the debt.

At the end of June 2016, PSND ex stood at £1,620.7 billion; an increase of £47.6 billion compared with June 2015. This increase in net debt is a result of:

• £73.0 billion of public sector net borrowing
• less £0.3 billion in timing differences between cash flows for gilt interest payments and the accrued gilt interest flows
• less £25.1 billion in net cash transactions related to acquisition or disposal of financial assets of equivalent value (for example loans) and timing of recording

At the end of June 2016, the provisional estimate of PSND ex as a percentage of GDP stood at 84.0%; a decrease of 0.1 percentage points compared with June 2015. This fall indicates that GDP is currently increasing (year-on-year) faster than net debt excluding public sector banks. However, care should be taken when inferring trends from only one month's data, especially given the provisional nature of centred GDP estimates for the latest month.

The methodology that underpins our presentation of fiscal aggregates as GDP ratios can be found in The use of GDP in public sector fiscal ratio statistics. Earlier this year we sought user feedback on these methods and as a result we will be making, in the September Public Sector Finances bulletin, a minor methodology change to the way that we estimate GDP for periods where GDP has not yet been published. More information is available in Section 10, Recent events and methodological changes.

All else being equal, it is estimated that the impact of this methodology change would be to revise the PSND ex at the end of June 2016 from 84.0% of GDP to 84.1% of GDP.

Figure 5 illustrates public sector net debt excluding banking groups (PSND ex) from the financial year ending March 1994 to date.

Figure 5: Public sector net debt excluding public sector banks; the financial year ending 1994 to financial year ending 2017¹

UK, all data excluding public sector banks

Source: Office for National Statistics

Notes:

1. Financial year 2016/17 represents financial year ending 2017 (April 2016 to March 2017).

Download this image Figure 5: Public sector net debt excluding public sector banks; the financial year ending 1994 to financial year ending 2017^1^

.png (32.1 kB) .xls (39.9 kB)

The increases in debt between the financial year ending March 2009 (April 2008 to March 2009) and the financial year ending March 2011 (April 2010 to March 2011) were larger than in the early part of the decade, as the economic downturn meant public sector net borrowing excluding public sector banks (PSNB ex) increased. Since then it has continued to increase but at a slower rate.

For the purposes of UK fiscal policy, net debt is defined as total gross financial liabilities less liquid financial assets, where liquid assets are cash and short-term assets which can be released for cash at short notice and without significant loss. These liquid assets mainly comprise foreign exchange reserves and bank deposits.

Figure 6 presents public sector debt (excluding public sector banks) at the end of June 2016 by sub-sector. Time series for each of these component series are presented in Tables PSA8A to D in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

Figure 6: Sub-sector split of public sector net debt excluding public sector banks at June 2016 UK (£ billion)

Source: Office for National Statistics

Notes:

1. Cross-holdings between sub-sectors are removed in calculating public sector net debt, gross debt and liquid assets.
2. Public corporations' debt (consolidated) = non-financial PC gross debt (EYYD) less CG/NFPCs' gross debt (KSC8) less LG/NFPCs' cross holdings of debt (KSC9).
3. APF - Bank of England Asset Purchase Facility.

Download this image Figure 6: Sub-sector split of public sector net debt excluding public sector banks at June 2016 UK (£ billion)

.png (48.9 kB) .xls (166.4 kB)

Changes in net debt between 2 points in time are normally similar to the net cash requirement for the intervening period, though the relationship is not an exact one because the net cash requirement reflects actual prices paid, while the net debt is at nominal prices. For instance, gilts are recorded in net debt at their redemption (or face) value, but they are often issued at a different price due to premia or discounts being applied. The net cash requirement will reflect the actual issuance and redemption prices, but net debt only ever records the face (or nominal) value.

Net cash requirement is discussed further in Section 8 of this bulletin.

The Office for Budget Responsibility (OBR) normally produces forecasts of the public finances twice a year (normally in March and December). The latest OBR forecast was published on 16 March 2016.

Figure 7, Table 3 and Table 4 enable users to compare emerging data against the OBR forecasts. Caution should be taken when comparing public finance data with OBR figures for the full financial year, as data are not finalised until after the financial year ends. Initial estimates soon after the end of the financial year can be subject to sizeable revisions in later months. In addition, in-year timing effects on spending and receipts can affect year-to-date comparisons with previous years.

There can also be some methodological differences between OBR forecasts and outturn data. In its latest publication, OBR published a table within their Economic and Fiscal Outlook Supplementary Fiscal Tables – March 2016 titled “Table: 2.45 Items included in OBR forecasts that ONS have not yet included in outturn”.

Figure 7 illustrates the public sector net borrowing excluding public sector banks (PSNB ex) for the fourth provisional estimate of the complete financial year ending March 2016 (April 2015 to March 2016), along with the provisional estimate of the current financial year-to-date (April to June 2016). These are not final figures and may be revised as provisional data are replaced with finalised and audited data.

The fourth provisional estimates suggest that in the financial year ending March 2016 (April 2015 to March 2016), borrowing fell by £16.3 billion to £75.3 billion, compared with the previous financial year. By comparison, the OBR forecast for the financial year ending March 2016 (April 2015 to March 2016) was £72.2 billion which is £3.1 billion below the latest outturn estimate.

In the current financial year-to-date (April to June 2016), public sector net borrowing (excluding public sector banks) decreased by £2.3 billion to £25.6 billion compared with the same period in 2015.

OBR have estimated that the public sector will borrow £55.5 billion during the financial year ending March 2017 (April 2016 to March 2017); a reduction of £19.8 billion on the provisional outturn for the financial year ending March 2016 (April 2015 to March 2016).

Table 3 compares the year-to-date (April to June 2016) estimate of the main public sector fiscal aggregates with the same period in the previous financial year. It contrasts these data with the percentage change between the latest full year outturn data for the financial year ending March 2016 (April 2015 to March 2016) and the OBR forecast for the financial year ending March 2017 (April 2016 to March 2017), as published in March 2016.

Table 4 presents the fourth provisional estimate of public sector net borrowing split by sub-sector for the complete financial year ending March 2016 (April 2015 to March 2016) along with the corresponding OBR forecast; published in Table 2.38 (General government transactions by economic category) of the Economic and Fiscal Outlook Supplementary Fiscal Tables - March 2016.

On the same day as this bulletin is released, the OBR publishes a commentary on the latest figures and how these reflect on its forecasts. The OBR provides this commentary to help users interpret the differences between the latest outturn data and the OBR forecasts by providing contextual information about assumptions made during the OBR’s forecasting process.

The UK government debt and deficit for Eurostat statistical bulletin is published quarterly (in January, April, July and November each year), to coincide with when the UK and other European Union member states are required to report on their deficit (or net borrowing) and debt to the European Commission.

On 15 July 2016, we published the latest UK Government Debt and Deficit for Eurostat statistical bulletin: The data used to produce the 15 July 2016 publication are consistent with those used in the production of the public sector finances statistical bulletin published on 21 June 2016.

In the publication of 15 July 2016 we reported that:

• general government deficit (Maastricht borrowing) in the financial year ending March 2016 (April 2015 to March 2016) was £74.5 billion, equivalent to 4.0% of GDP; a decrease of £16.2 billion compared with the financial year ending March 2015
• general government gross debt (Maastricht debt) at the end of March 2016 was £1,649.2 billion, equivalent to 87.7% of GDP; an increase of £47.5 billion compared with the end of the financial year ending March 2015

The latest public sector finances data in this bulletin report that:

• general government net borrowing in the financial year ending March 2016 (April 2015 to March 2016) was £74.9 billion, equivalent to 4.0% of GDP; an upward revision of £0.4 billion since the 15 July 2016 publication
• general government gross debt at the end of March 2016 was £1,649.2 billion, equivalent to 87.7% of GDP, unchanged since the 15 July publication

It is important to note that the GDP measure, used as the denominator in the calculation of the debt ratios in the UK government debt and deficit for Eurostat statistical bulletin, differs from that used within the public sector finances statistical bulletin.

An article, The use of GDP in fiscal ratio statistics, explains that for debt figures reported in the monthly public sector finances, a 12 month GDP total centred on the month is employed, while in the UK government debt and deficit for Eurostat statistical bulletin the total GDP for the preceding 12 months is used.

Net cash requirement is a measure of how much cash the government needs to borrow (or lend) to balance its accounts. In very broad terms, net cash requirement equates to the change in the level of debt.

Central government net cash requirement is reconciled against the change in central government net debt in Table REC3 in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

The public sector net cash requirement excluding public sector banks (PSNCR ex) follows a similar trend to that of public sector net borrowing by peaking in the financial year ending March 2010, though in recent years transfers from the Asset Purchase Facility have had a substantial impact on PSNCR ex but are PSNB ex neutral.

PSNCR ex in the current financial year-to-date (April to June 2016) was £19.4 billion; £1.2 billion, or 6.0% lower than in the same period in 2015.

Figure 8 presents public sector cash requirement by sub-sector for the financial year-to-date (April to June 2016). Time series for each of these component series are presented in Table PSA7A in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

Figure 8: Sub-sector split of public sector net cash requirement excluding public sector banks, financial year-to-date (April to June 2016) UK (£ billion)

Source: Office for National Statistics

Notes:

1. Effects of cash transactions between sub-sectors are removed in calculating public sector total net cash requirement (and consolidated expenditure and income totals).
2. APF - Bank of England Asset Purchase Facility.

Download this image Figure 8: Sub-sector split of public sector net cash requirement excluding public sector banks, financial year-to-date (April to June 2016) UK (£ billion)

.png (49.8 kB) .xls (152.1 kB)

Central government net cash requirement (CGNCR) is a focus for some users, as it provides an indication of how many gilts (government bonds) the Debt Management Office may issue to meet the government’s borrowing requirements.

In the current financial year-to-date (April to June 2016), CGNCR, was £24.8 billion; £0.9 billion, or 3.4% lower than in the same period in 2015.

In the financial year ending March 2016 (April 2015 to March 2016), CGNCR was £58.1 billion; a decrease of £26.5 billion, or 31.3%, compared with the previous financial year.

Cash transfers from the Asset Purchase Facility (APF) were £2.2 billion lower in the financial year ending March 2016 (April 2015 to March 2016), than the previous financial year. Without the impact of these transfers, CGNCR would have been £28.7 billion lower in the financial year ending March 2016 (April 2015 to March 2016) than the previous financial year.

Recent events impacting on CGNCR

For the current financial year, ending March 2017 (April 2016 to March 2017) the following event has reduced the CGNCR to date:

• the transfers between the Bank of England Asset Purchase Facility Fund (BEAPFF) and central government

In the financial year ending March 2016 (April 2015 to March 2016) the following events reduced the CGNCR:

• the transfers between the Bank of England Asset Purchase Facility Fund (BEAPFF) and central government
• the sale of shares in Lloyds Banking Group
• the sale of shares in Eurostar
• the sale of shares in Royal Mail
• the sale of shares in Royal Bank of Scotland
• the sale of UK Asset Resolution Limited (UKAR) assets
• the re-imbursement of support payments made to Icesave

In the financial year ending March 2015 (April 2014 to March 2015) the following events reduced the CGNCR:

• the transfers between the BEAPFF and central government
• the sale of shares in Lloyds Banking Group

In the financial year ending March 2014 (April 2013 to March 2014) the following events reduced the CGNCR:

• the transfers between the BEAPFF and central government
• the sale of shares in Lloyds Banking Group
• the sale of shares in Royal Mail

In the financial year ending March 2013 (April 2012 to March 2013) the following events reduced the CGNCR:

• the transfers between the BEAPFF and central government
• the Royal Mail Pension Plan transfer and subsequent sale of assets
• the transfer of the Special Liquidity Scheme final profits between Bank of England and central government
• the 4G Spectrum sale

Public sector net cash requirement

Although the central government net cash requirement is the largest part of the public sector net cash requirement excluding public sector banks (PSNCR ex), the total public sector net cash requirement (PSNCR) can be very different. The reason is that the PSNCR includes the net cash requirement of the public sector banking groups. In recent years, the public sector banking groups have recorded large cash surpluses which have had a substantial impact on the public sector net cash requirement.

Current receipts

The government receives income mainly from taxes but also from National Insurance contributions, interest and dividends, fines and rent.

As cash receipts are generally accrued back to earlier periods when the economic activity took place, the first monthly estimate for receipts is by nature provisional, and must include a substantial amount of forecast data.

Central government receipts follow a strong cyclical pattern over the year, with high receipts in April, July, October and January due to quarterly Corporation Tax returns being accrued to these months.

In both January and July (to a lesser extent) accrued receipts are particularly high due to receipts from quarterly Corporation Tax combining with those from Income Tax self-assessment. The revenue raised through Income Tax self-assessment, as well as primarily affecting January and July receipts, also tends to lead to high receipts in the following month (March and November respectively), although to a lesser degree.

Pay as you earn (PAYE) tends to vary little throughout the financial year on a monthly basis (excluding bonus months).

In recent years transfers from both the Bank of England Asset Purchase Facility Fund (BEAPFF) and the Special Liquidity Scheme (SLS) have boosted central government receipts. These transfers to central government have no impact on public sector borrowing due to the central government receipts being offset by the payments from the Bank of England.

Current expenditure

Current expenditure is the government’s spending on activities such as: social benefits (mainly pension payments), interest payments and other current expenditure including government departmental spending (excluding spending on capital assets).

Trends in central government current expenditure can be affected by monthly changes in debt interest payments, which can be volatile as they depend on the movements in the Retail Prices Index. Excluding debt interest makes this statistic less volatile.

There is however one regular peak in net social benefits, which are higher in November than in other months due to the annual payment of the winter fuel allowance.

Year-on-year growth in net social benefits is affected by the uprating of benefits to compensate for inflation based on the Consumer Prices Index (CPI).

For recent years these are: 2.7% in the financial year ending March 2015; 1.2% in the financial year ending March 2016 and -0.1% for the financial year ending March 2017 (meaning that the rates have remained frozen). These apply to benefits for pensioners (apart from the State Pension). Most benefits for people of working age are frozen for the financial year ending March 2017.

However, for State Pensions, the largest component within net social benefits, there is a “triple guarantee” that means that they are uprated by the highest of the CPI, increases in earnings or 2.5%. For the financial year ending March 2017, they were uprated by the rise in annual earnings which was 2.9%.

It can be difficult to compare the profile of monthly central government expenditure even when excluding both debt interest and net social benefits.

For the 4 years since the financial year ending March 2014, there have been continual changes to the profile of central government grants to local government.

In the financial year ending March 2016, the Revenue Support Grant (the main general grant paid to local authorities in England) was paid with a third of the total in April and the remainder in equal instalments in all the other months, whereas, in the financial year ending March 2015, more than half of it was paid in April with the bulk of the remaining balance paid in February and March. This financial year (ending March 2017) the monthly pattern of grants has changed again and is much flatter - with 10% being paid in April and the remainder flat though the year. The overall level is also lower than last year.

Current budget deficit

The gap between current expenditure and current receipts (having taken account of depreciation) is referred to as the current budget. When current expenditure is greater than current receipts (income), the public sector runs a current budget deficit.

In June 2016, the central government current budget deficit was £8.1 billion, a decrease in the deficit of £1.5 billion, or 15.5% compared with June 2015.

The central government current budget deficit in the current financial year-to-date (April to June 2016) was £20.4 billion; £4.6 billion, or 18.5% lower than in the same period in 2015.

Figure 9 illustrates that the central government current budget deficit (as a percentage of GDP) has reduced since the financial year ending March 2010 (April 2009 to March 2010), but is still larger than before the global financial shock.

In the financial year ending March 2016 (April 2015 to March 2016), the central government current budget deficit was £36.5 billion, a decrease in the deficit of £16.9 billion, or 31.7% compared with the previous financial year.

In recent years the current budget has been in deficit in most months. January and July tend to be surplus months as these are the 2 months with the highest receipts.

Net investment

Net investment represents the government’s spending on capital assets, like infrastructure projects, property and IT equipment, both as grants and by public sector bodies themselves minus capital receipts from the sale of capital assets.

In the financial year ending March 2016 (April 2015 to March 2016), central government’s net investment was £33.9 billion. This represents a decrease of £1.4 billion, or 4.1%, on the same period in the previous year and is largely due to a fall in central government capital consumption (depreciation).

Central government net investment is difficult to predict in terms of its monthly profile as it includes some large capital grants (such as those to local authorities and education institutions) and can include some large capital acquisitions or disposals, all of which vary from year to year. Net investment in the last quarter of the financial year is usually markedly higher than that in the previous 3 quarters.

Central government net investment includes the direct acquisition minus disposal of capital assets (such as buildings, vehicles, computing infrastructure) by central government. It also includes capital grants to and from the private sector and other parts of the public sector. Capital grants are varied in nature and cover payments made to assist in the acquisition of a capital asset, payments made as a result of the disposal of a capital asset, transfers in ownership of a capital asset and the unreciprocated cancellation of a liability (that is conceding a debt will not be repaid).

The sum of net investment (spending on capital less capital receipts) and the current budget deficit constitute net borrowing.

Classification decisions

Each quarter we publish a forward workplan outlining the classification assessments we expect to undertake over the coming 12 months. To supplement this, each month a classifications update is published which announces classification decisions made, and includes expected implementation points (for different statistics) where possible. Classification decisions are reflected in the public sector finances at the first available opportunity and, where necessary outlined in this section of the statistical bulletin.

Local government cash data

We are currently working with the Department for Communities and Local Government to review the methodology used to calculate local government net cash requirement. Next month we will update you on the progress and findings of this review.

Changes to Net Debt

In December 2014, we introduced a new table (REC3), as an experimental statistic, showing the relationship between central government net cash requirement and central government net debt.

We improved the detail of this table in June 2015, but advised you that the Office for National Statistics (ONS) and HM Treasury were continuing to work together to fully understand the data sources feeding into the central government net cash requirement and net debt so as to provide you with clarity on non-cash drivers to net debt and as a quality assurance tool for the monthly production of this bulletin.

This work has now reached a conclusion and we plan to introduce the findings of this work in the August 2016 edition of the bulletin due to be published on 21 September 2016.

Implementing the findings of this investigative work will result in a number of changes to public sector net debt (both PSND and PSND ex). The major changes are:

• inclusion of bonds issued by London Continental Railways, now held by Department for Transport; currently these are missing from central government net debt but partially included (wrongly) in public corporations’ net debt
• inclusion of repurchase agreements (repos) between the official reserves and overseas institutions as well as non-bank UK institutions; currently only the liabilities relating to repos between the official reserves and UK banks are included in PSND/PSND ex
• adjustments to NS&I outstanding balances to remove any liabilities that had not crystallised at the end of the reporting period; currently some liabilities which crystallise in the days immediately following the reporting month are being included in PSND/PSND ex

At this stage of the work, it is difficult to be precise about the impact of these changes on PSND/PSND ex, but initial indications are that as a result of these methodological improvements:

• PSND/PSND ex at the end of the financial year ending March 2016 will increase by around £8.5 billion
• PSND/PSND ex at the end of the financial year ending March 2015 will increase by around £3.5 billion
• PSND/PSND ex at the end of the financial year ending March 2014 will increase by around £1.5 billion

It should be noted that central government net debt (CGND) will be revised upwards by approximately £1.5 billion more than PSND/PSND ex. This is because the changes to London Continental Railways bonds largely net out in PSND/PSND ex but not in CGND.

In addition to the above changes to net debt there may be some much smaller revisions to central government net cash requirement of no more than £100 million a year.

Additional Changes to Net Debt as % of GDP

Following our user consultation concerning the use of public sector fiscal statistics presented as ratios of gross domestic product (GDP), we will be implementing a minor methodological change to the way we estimate GDP for periods where GDP has not yet been published. This methodology change is to move from the current method of using forecasted annual growth rates published by the Office for Budget Responsibility (OBR) with OBR’s forecasted quarterly growth rates. This methodology change will be implemented in the PSF bulletin during Autumn 2016.

All else being equal, it is estimated that the impact of this methodology change would be to revise the PSND ex at the end of June 2016 from 84.0% of GDP to 84.1% of GDP.

Bank of England Asset Purchase Facility Fund (APF)

The APF currently holds government securities (gilts) on which it earns interest, and pays interest on the reserves created by the Bank of England to finance it. These flows are reflected in public sector net cash requirement excluding public sector banks (PSNB ex) as they enter and leave the APF. The net liabilities of the APF increase PSND ex.

On 9 November 2012, the Chancellor announced an agreement with the Bank of England to transfer the excess cash in the APF to the Exchequer. These flows are internal to the public sector and so do not affect PSNB ex.

In June 2016, there were no transfers from the Bank of England Asset Purchase Facility Fund (BEAPFF) to HM Treasury. The next expected APF transfer will occur in July 2016.

The Bank of England entrepreneurial income for the financial year ending March 2016 (April 2015 to March 2016) was calculated as £11.9 billion. This is the total amount of dividend transfers that can impact on central government net borrowing in the financial year ending March 2017 (April 2016 to March 2017).

This treatment follows the conclusion of the 2013 PSF Review consultation.

All cash transferred from the Asset Purchase Facility to HM Treasury is fully reflected in central government net cash requirement and net debt.

For more detail of transactions relating to the Asset Purchase Facility, see Table PSA9 in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

Lloyds Banking Group share sales

In recent years the government has entered a programme of selling shares in publicly owned organisations. For most share sales, the proceeds will reduce the central government net cash requirement (CGNCR) and public sector net debt (PSND) by an amount corresponding to the cash raised from the sale but have no impact on public sector net borrowing.

On 17 September 2013, the UK government began selling part of its share holdings in Lloyds Banking Group (LBG). A further share sale on 23 and 24 March 2014 meant that the UK government surrendered, in total, a 13.5% stake in the institution, a quantity sufficient to lead to LBG being re-classified from a public sector body to a private sector body.

Based on the currently available information, we have recorded no LBG share sales in June 2016, though this may be revised at a later date.

Since December 2014, the government has continued reducing its shareholding in LBG via a pre-arranged trading plan, raising an estimated total of £16.2 billion to date.

In January 2016, the government announced that it would extend Lloyds’ trading plan for a further 6 months (ending no later than 30 June 2016). It stated that the current trading plan has reduced the government’s remaining stake in Lloyds to around 9%.

Housing associations

The reclassification of English private registered providers of social housing (referred to in this bulletin as housing associations) from the private to the public corporation sector was reflected in public sector finances for the first time in the January 2016 statistical bulletin. This reclassification, announced on 30 October 2015, affects over 1,500 bodies providing social housing and applies back to July 2008 when the controls in the Housing and Regeneration Act 2008 came into force.

It is important to realise that current estimates of the impact of the reclassification of housing associations are preliminary estimates which may be updated when new data become available or methodological improvements are made. At present, we are actively seeking alternative data sources to investigate the impact of smaller providers on net borrowing, net cash requirement and net debt.

We are also doing further work to test the assumptions that have been made in compiling the estimates. These were:

• all housing association debt is assumed to be held by the private sector – the Quarterly Survey of Private Registered Providers for March 2015 showed that banks, building societies and capital markets contributed 99% to agreed sources of funding
• the Global Accounts are collected for the entire financial year – monthly transactions were estimated by dividing the financial year figure by 12
• providers which own less than 250 properties (less than 2% of the total stock) are assumed to have no net debt and not be investing in new properties
• providers owning or managing between 250 and 1,000 properties are assumed to have the same gross debt per 1,000 properties as those owning or managing between 1,000 and 2,500 homes
• the relative impact of small providers on the accounts is assumed to be constant between financial year ending March 2009 and financial year ending March 2015

This reclassification is being introduced in public sector finances before implementation in the Quarterly National Accounts and Blue Book publications. Any work to improve the methods and data sources used in these estimates will be reflected in the National Accounts publications at the time the reclassification is implemented.

Bank surcharge

In July 2015, HM Revenue and Customs (HMRC) published details of a surcharge to be levied on profits of banking companies in accounting periods beginning on or after 1 January 2016.

The measure imposes a surcharge of 8% on the profits of banking companies. The profits will be calculated and reported on the same basis as for Corporation Tax, but with some reliefs added back.

We expect to record the first substantial payments under this scheme in the second half of 2016.

In publishing monthly estimates, it is necessary that a range of different types of data sources are used. A summary of the different sources used and the implications this has for data revisions is provided in the document Sources summary and their timing.

The Public Sector Finances Revision Policy provides information of when users of the statistics published in the public sector finances and Government Deficit and Debt under the Maastricht Treaty statistical bulletins should expect to see methodological and data related revisions.

More detail of the methodology and sources employed can be found in the Public Sector Finances Methodological Guide.

Revisions tend to be the result of both updated data sources and methodology changes. This month the reported revisions are solely the result of updated data sources.

Table 5 summarises revisions between the data contained in this bulletin and the previous publication.

Public sector net borrowing excluding public sector banks (PSNB ex)

Revisions to PSNB ex are largely limited to the current financial year-to-date (April to May 2016), along with the latest full financial year (April 2015 to March 2016).

Revisions to net borrowing in the current financial year-to-date (April to May 2016)

When considering the revisions to the current financial year-to-date we have previously noted that data for the initial outturn estimates for the early months of the financial year, particularly April, contain more forecast data than other months as profiles of tax receipts, along with departmental and local government spending, are still provisional. This means that the data for these months are typically more prone to revision than other months and can be subject to sizeable revisions in later months.

The provisional estimate PSNB ex in current financial year-to-date has been revised down by £0.1 billion as a result of a £0.3 billion decrease in central government borrowing, partially offset by a £0.2 billion increase in local government net borrowing.

The estimates of the central government current receipts (including taxes) were collectively revised down by £0.6 billion. Of these, VAT, Income Tax, Social Contributions (National Insurance) were revised downward by £0.5 billion, £0.2 billion and £0.1 billion respectively.

Over the same period, estimates of current expenditure have been revised down by £0.6 billion, largely due to decreases in the estimate of departmental spending on goods & services and staff costs.

The downward revisions to both receipts and expenditure were almost entirely offsetting in the current account, leaving the current budget deficit largely unchanged.

Downward revisions to capital transfers from central government to other sectors and gross capital formation of £0.1 billion and £0.2 billion respectively, resulted in a decrease of a £0.3 billion to both the estimate of net investment and in turn central government net borrowing.

The estimate of local government net borrowing (LGNB) in the current financial year-to-date has been revised up by £0.2 billion, due to provisional estimates of both capital and current transfers from central to local government being replaced by revised estimates.

Revisions to net borrowing in the financial year ending March 2016

In the financial year ending March 2016 (April 2015 to March 2016), the estimate PSNB ex was revised upwards by £0.4 billion.

This revision is entirely attributable to the central government current account, where current receipts (including taxes) were revised downwards by £0.4 billion, largely as a result of the inclusion of HM Revenue and Customs Trust Statement (audited accounts). Of these, a downward revision of £0.5 billion to Income Tax was partially offset by increases to both VAT and Corporation Tax-related payments of £0.1 billion each.

Public sector net debt excluding public sector banks (PSND ex)

PSND ex at the end of May 2016 was revised upward by £1.1 billion, almost entirely due to the change in the methodology applied to official reserves within central government liquid assets. This change impacts equally on both PSND ex and public sector net debt including public sector banks (PSND), increasing both measures by:

• £2.7 billion at the end of March 2016
• £2.2 billion at the end of April 2016
• £1.5 billion at the end of May 2016

The reprofiling of the level of central government bank and building society deposits in the current financial year has resulted in an increase of £1.4 billion in liquid assets recorded in April 2016 with an offsetting decrease recorded in May 2016.

The increase in deposits recorded in April 2016, partially offset the impact on debt of the changes to official reserves in that month.

PSND ex expressed as a percentage of GDP

On 30 June 2016, we published the latest estimates of GDP. These figures have been used in this publication, resulting in all figures expressed as a percentage of GDP being revised over an extended period.

To provide an insight into the drivers of the historical revisions between publications, this bulletin presents 3 revisions tables:

• Table PSA1R complements PSA1 and provides a revisions summary (between the current and previous publication) to headline statistics in this release
• Table PSA2R complements PSA2 and provides the revisions (between the current and previous publication) to net borrowing by sector
• Table PSA6R complements PSA6B and provides the revisions (between the current and previous publication) to the components of central government net borrowing

Tables PSA1R and PSA6R are published in the Public Sector Finances Tables 1 to 10: Appendix A dataset.

In addition, the Revisions analysis for Public Sector Finances: Appendix C dataset presents a statistical analysis of several main components of the central government account (current receipts, current expenditure, net borrowing and net cash requirement) to determine whether their average revisions are statistically significant.

Non-market output

As announced in the public sector finance: April 2016 bulletin, to accommodate the subdivision of non-market output dependant on whether or not a payment is made to government, we have made a small change to the presentation of data in Tables PSA6C, PSA6H and PSA6J.

In Table PSA6C, series MUT5, Representing central government market output and output for own final use is now accompanied by the footnote “Includes payments for non-market output”.

In both Tables PSA6H and PSA6J, series NMIX, Representing local government market output, has been replaced by series AE76 with the accompanying footnote “Market output, payments for non-market output, pension contributions, current grants received from central government and capital grants received from the private sector are recorded as negative expenditure.”

Social transfers in kind

As announced in the public sector finance: April 2016 bulletin, to accommodate the subdivision of social transfers in kind dependant on whether government directly provides the good or pays a third party to do so, we have made a small change to the presentation of data in Table PSA6E.

In Table PSA6E, series MF76, Representing central government purchase of goods and services is now accompanied by the footnote “Includes both non-market production and market production of social transfers in kind”.

As part of our continuous engagement strategy, we welcome your feedback on ways in which this bulletin can be improved. Please email: public.sector.accounts@ons.gov.uk

The use of GDP in public sector fiscal ratio statistics

In January 2016, we asked whether the public sector fiscal statistics presented as ratios of GDP that we publish in the public sector finances meet your needs. We asked for responses by 18 March 2016, but as a result of limited feedback we followed the issue up bilaterally with certain key users of the public sector finances. The responses we received through this process supported the current publication approach. Specifically, the responses:

• were unanimous that there was no user demand for monthly, quarterly or year-to-date statistics to be presented as ratios of GDP. The one exception to this being that debt should continue to be presented as a percentage of GDP on a monthly basis
• highlighted the importance of long time series (of at least 25 years) being available on a consistent basis
• stressed that both calendar year and financial year data should be available in an easy to access format

One respondent also suggested an alternative methodology for producing forecast estimates of GDP in periods where outturn was not yet available. The current methodology uses forecasted annual GDP growth rates from the Office for Budget Responsibility (OBR) to derive the estimates, but the OBR also publish quarterly GDP growth rates which could be used in the production of these estimates.

Following this feedback, the Public Sector Finances Technical Advisory Group (PSFTAG) met on 6 July to consider the different options available for deriving estimates of GDP. The recommendation of PSFTAG was to use the OBR quarterly GDP forecast series to produce year-on-year growth rates comparing the latest quarter with the same quarter 12 months ago. Applying these growth rates to the latest outturn data allows GDP estimates to be produced for future periods.

This methodology change will be implemented in the public sector finances bulletin during Autumn 2016. At the same time the methodology article, The use of GDP in public sector fiscal ratio statistics, will be updated to reflect the new methodology.

While considering the fiscal measures as a percentage of GDP, the PSFTAG also considered whether it was most appropriate to use a centred 12 month GDP figure when calculating net debt as a percentage of GDP or whether to use instead the GDP of the preceding 12 months. PSFTAG recognised that there were benefits in both approaches but neither was conceptually superior to the other. As a result, PSFTAG recommended no change to the current approach of calculating net debt as a percentage of GDP using a GDP measure centred on the end of the month to which the debt relates.

UK Statistics Authority assessment of public sector finances

Alongside monitoring the production and publication of official statistics, the UK Statistics Authority's statutory function is to prepare, adopt and publish a Code of Practice for Official Statistics (in consultation with others as appropriate), setting out the standards that the Statistics Authority expects official statistics to meet. The Statistics Authority also determines whether official statistics comply with the Code and, if so, designates them with the quality mark “National Statistics”. The process of determining compliance with the Code and designation as National Statistics is known as “Assessment”.

On 8 November 2015, the UK Statistics Authority published its latest assessment report of public sector finances. The report confirmed the National Statistics status of the public sector finances bulletin subject to certain requirements being met.