Public sector finances, UK: November 2023

• Public sector net borrowing excluding public sector banks (borrowing) in November 2023 was £14.3 billion, £0.9 billion less than in November 2022 and the fourth highest November borrowing since monthly records began in 1993.

• Borrowing in the financial year-to-November 2023 was £116.4 billion, £24.4 billion more than in the same eight-month period last year and the second highest financial year-to-November borrowing on record.

• Public sector net debt excluding public sector banks (debt) was £2,671.4 billion at the end of November 2023 and was provisionally estimated at around 97.5% of the UK's annual gross domestic product (GDP); this is 1.8 percentage points higher than in November 2022 and remains at levels last seen in the early 1960s.

• Excluding the Bank of England, debt was £2,418.6 billion, or around 88.3% of GDP, £252.8 billion (or 9.2 percentage points) lower than the wider measure.

• Public sector net worth excluding public sector banks was in deficit by £714.6 billion at the end of November 2023; this compares with a £561.0 billion deficit at the end of November 2022.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £17.4 billion in November 2023, £8.1 billion less than in November 2022.

In November 2023, the public sector spent more than it received in taxes and other income, requiring it to borrow £14.3 billion. This was £0.9 billion less than was borrowed in November 2022 and is the fourth highest November borrowing since monthly records began in 1993, behind those of the 2020 coronavirus (COVID-19) pandemic period, the energy support schemes period of 2022, and in 2010 following the global financial crisis.

A breakdown of net borrowing by sub-sector 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 the main determinant of public sector borrowing. In November 2023, central government borrowed £10.1 billion, £3.0 billion less than in November 2022 and the seventh highest November borrowing since monthly records began in 1993.

Central government receipts

Central government's receipts were £77.6 billion, £3.6 billion more than in November 2022 and the highest November since monthly records began in 1993.

Of this £77.6 billion, tax receipts were £58.2 billion, £2.7 billion more than in November 2022, with Value Added Tax (VAT) receipts and income tax receipts both increasing by £1.4 billion.

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

Central government expenditure

In November 2023, central government's total expenditure was £87.6 billion, £0.7 billion more than in November 2022 and the highest November total since monthly records began in 1993.

Spending on goods and services

Central government departmental spending on goods and services was £33.6 billion in November 2023, £2.9 billion more than in November 2022, as inflation increased running costs. Of this, staff costs increased by £1.3 billion, and the procurement of goods and services increased by £1.5 billion.

Net social benefits

Net social benefits paid by central government were £24.2 billion in November 2023, £1.2 billion more than in November 2022. In recent months we have seen large increases in benefit payments largely because of inflation-linked benefits uprating and cost-of-living payments.

For more information on these benefit payments, see UK Parliament's Benefit uprating 2023 to 2024 report and GOV.UK's Cost of Living Payments 2023 to 2024 guidance.

Subsidies

Subsidies paid by central government were £2.2 billion in November 2023, £3.1 billion less than in November 2022. This is largely because of the cost of the Energy Price Guarantee (for households) and Energy Bill Relief Scheme (for businesses) affecting this month last year.

Other current grants

Payments recorded under central government "other current grants" were £1.7 billion in November 2023, £2.0 billion less than in November 2022, largely because of the cost of last year's Energy Bills Support Scheme.

Interest payable on central government debt

In November 2023, the interest payable on central government debt was £7.7 billion, £0.1 billion more than in November 2022 and the highest November total since monthly records began in April 1997.

The large month-on-month increases in the Retail Prices Index (RPI) observed since early 2021 have 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.

In November 2023, capital uplift was £3.0 billion and was largely determined by the 0.5% increase in the RPI between August and September 2023. This increased the capital uplift on the three-month lagged index-linked gilts which make up around three-quarters of the index-linked gilt stock.

Conversely, the low amount of central government interest payable in September 2023 was largely because of a 0.6% decrease in the RPI between June and July 2023, which resulted in a negative capital uplift of £3.2 billion on index-linked gilts.

A monthly time series of the total capital uplift on the index-linked gilts in issue is available on our website as series identifier code MW7L.

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

The £14.3 billion borrowed in November 2023, combined with an upward revision of £3.8 billion to our previously published financial year-to-October 2023 borrowing estimate, brings our provisional estimate for the total borrowed in the financial year-to-November 2023 to £116.4 billion.

The principal determinant of the £116.4 billion borrowed by the public sector in the first eight months of the current financial year was the £136.9 billion borrowed by central government, which was partially offset by a £17.3 billion Bank of England (BoE) surplus.

The borrowing of both of these subsectors is affected by payments totalling £33.2 billion made by central government to the BoE over the last eight months under the Asset Purchase Facility Fund (APF) indemnity agreement. This was £32.4 billion more than the £0.8 billion paid in the same period last year.

As with similar intra-public sector transactions, these payments are public sector borrowing neutral. They increase central government's borrowing by £32.4 billion compared with the same period last year but reduce the borrowing impact of the BoE by an equal and offsetting amount.

Though these indemnity payments reduced the BoE's contribution to net borrowing by £32.4 billion compared with the same period a year earlier, this decrease was partially offset by a £17.3 billion increase in the net interest payable by the BoE, largely on the reserves created to finance the quantitative easing activities of the APF.

In the eight months to November 2023, central government received £618.1 billion in taxes and other payments, an increase of £26.3 billion compared with the same period a year ago. However, this increase was exceeded by a £70.8 billion increase in total expenditure, which rose to £754.9 billion over the same period. This additional spending included increases in:

• net investment of £40.1 billion, of which £32.4 billion was an increase in payments to the APF (these reduce BoE borrowing)

• inflation-linked uprated benefits and cost-of-living payments of £21.6 billion

• spending on goods and services (largely pay and procurement) of £22.4 billion

• grants to local government of £5.1 billion (these reduce local government borrowing)

These increases were partially offset by a reduction in central government debt interest payable of £10.7 billion, largely because of a slowing of the month-on-month growth in the Retail Prices Index. Additionally, there was a reduction in expenditure on central government current grants and subsidies of £6.9 billion and £2.2 billion, largely because of the cost of the energy support schemes in October and November 2022.

In its Economic and fiscal outlook – November 2023, the Office for Budget Responsibility (OBR) forecast that borrowing will reach £123.9 billion in the financial year ending March 2024, £7.7 billion less than the £131.6 billion estimated in March 2023.

Since our Public sector finances, UK: March 2023 bulletin published on 25 April 2023, we have reduced our estimate of borrowing for the 12 months to March 2023 (financial year ending (FYE) 2023) by £8.7 billion, from £139.2 billion to £130.5 billion.

This was £6.1 billion more borrowing than in the previous financial year (FYE 2022). It remains the fourth highest FYE borrowing since monthly records began in FYE 1947, behind FYE 2021 (during the coronavirus (COVID-19) pandemic) and both the FYE 2010 and FYE 2011 (following the global financial crisis).

In March 2023, the Office for Budget Responsibility (OBR) forecast that borrowing would settle at £152.4 billion in the financial year ending March 2023. In its Economic and fiscal outlook – November 2023, the OBR reduced this estimate by £24.1 billion to £128.3 billion.

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

In FYE 2023, the public sector current budget deficit was £84.6 billion, £14.6 billion more than in FYE 2022. This figure includes an estimated £39.4 billion cost of the energy support schemes. Over the same period, public sector net investment decreased by £8.4 billion to £45.9 billion.

The affordability of borrowing in the financial year ending March 2023

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

The coronavirus (COVID-19) pandemic had a substantial impact on the economy as well as public sector borrowing. Expressed as a proportion of GDP, borrowing in the financial year ending (FYE) 2021 was 15.0%, the highest for 75 years.

This proportion fell by 9.7 percentage points to 5.3% of GDP in FYE 2022 as the economy recovered from the coronavirus pandemic. This was broadly in line with the borrowing ratio of 5.2% in the FYE 2015 during the economic recover following the global financial crisis of the late 2000s.

Current estimates show that for the 12 months to March 2023, the proportion remains broadly around that of FYE 2015, having reduced by only a further 0.2 percentage points to 5.1%.

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 which we discuss in our What the UK government owns and what it owes blog.

Table 2 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 sub-sector 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). Net debt is commonly expressed as a ratio of gross domestic product (GDP) – (the value of the output of the economy), which gives an indication of its affordability and helps with comparability over time.

At the end of November 2023, the net debt-to-GDP ratio was provisionally estimated at 97.5%, 1.8 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 November 2023 Office for Budget Responsibility (OBR) forecast.

Public sector net debt excluding the Bank of England (BoE) was £2,418.6 billion at the end of November 2023, or around 88.3% of GDP, £252.8 billion (or 9.2 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 November 2023, we record the £104.9 billion difference between the £747.1 billion of reserves created to purchase its gilts (at market value) and their £642.2 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.

Public sector net worth

Public sector net worth excluding public sector banks (PSNW ex) was in deficit by £714.6 billion at the end of November 2023. This compares with a £561.0 billion deficit at the end of November 2022.

The main reason for the £153.6 billion reduction in PSNW ex over the last 12 months was a £194.7 billion increase in PSND ex, partly offset by a £49.3 billion increase in public sector non-financial assets. 

If we exclude the public sector's £1,565.8 billion of non-financial assets, public sector net financial worth excluding public sector banks (PSNFW ex) deteriorated by £202.9 billion over the same period to a deficit of £2,280.4 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: October 2023 bulletin, published on 21 November 2023, and highlight the revisions to borrowing by sub-sector, 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.

Each quarter (March, June, September, and December) we update our borrowing estimates to include additional data from the national accounts. These updates can cause larger than usual revisions, often extending back further into earlier periods than those of our regular monthly updates. The larger of the updates made this month are explained in our Recent and upcoming changes to public sector finance statistics: November 2023 article.

This month we have updated our estimates of capital consumption for the central government, local government and public corporations sub-sectors to include data published in the national accounts on 29 September 2023. These updates cover the period January 2022 to date and are borrowing neutral with offsetting impacts on receipts, current expenditure, current budget deficit and net investment.

Revision to public sector net borrowing (PSNB ex) in the financial year-to-October 2023

Since publishing our Public sector finances, UK: October 2023 bulletin, we have increased our estimate of borrowing in the financial year-to-October 2023 by £3.8 billion. This change was the result of new central government data replacing previous estimates.

Regular updates to tax and national insurance contributions reduced receipts by a total of £1.8 billion, with updated data replacing our initial estimates. Of these, Value Added Tax (VAT) receipts were reduced by £1.3 billion compared with our previous estimate.

Over the same period, we have increased our previous estimate of central government interest payable by £1.7 billion and pay and procurement data by a total of £0.9 billion. These increases were partially offset by a reduction to our previous estimate of subsidies paid by central government of £0.3 billion.

Revision to public sector net borrowing (PSNB ex) in earlier financial years

Since publishing our Public sector finances, UK: October 2023 bulletin, we have increased our estimate of borrowing in the financial year-to-March 2023 by £2.7 billion and in the financial year-to-March 2022 by £1.5 billion. These changes were the result of new data replacing previous estimates.

Revisions to borrowing in the financial year-to-March 2023

This month we have increased our estimate of central government borrowing in the 12 months to March 2023 by £1.2 billion. This was largely because of a £1.0 billion increase to our estimate of the expected losses on coronavirus (COVID-19) loan guarantees provided by central government.

Within our local government data, this month we have included provisional expenditure and receipts data for local authorities in England, final expenditure and receipts data for local authorities in Wales and final capital expenditure for local authorities in both England and Wales.

In replacing our previous estimates with these data, local government borrowing has been increased by £1.9 billion, with an increase in receipts of £1.5 billion offset with an increase in current spending of £2.8 billion, and a £0.5 billion increase in investment spending.

Revisions to borrowing in the financial year-to-March 2022

Though our previous estimate of central government borrowing in the 12 months to March 2022 remains largely unchanged, our estimates of the borrowing of the local government and public corporation sub-sectors have been updated with new data replacing previous forecasts.

This month we have updated our estimate of capital grants paid by local authorities between January and March 2022 with the latest national accounts data, increasing local government borrowing by £0.7 billion.

Borrowing by public corporations has been increased by £0.6 billion, largely because of a £0.5 billion increase in investment spending in the January to March 2022 period.

Revision to public sector net debt (PSND ex) at the end of October 2023

Since publishing our Public sector finances, UK: October 2023 bulletin, our estimate of debt at the end of October 2023 has been reduced by £2.3 billion to £2,641.4 billion.

This change was largely the because of routine quarterly updates to our estimates of the liquid assets held by both public corporations and local authorities, which combined, increased by £1.4 billion. Additionally, we have increased the cash holding of the Bank of England Asset Purchase Facility Fund by £1.3 billion because these data are reported one month in arrears.

Revisions to gross domestic product

Since publishing our Public sector finances, UK: October 2023 bulletin, we have reduced our estimate of debt (PSND ex) expressed as a ratio of gross domestic product (GDP) at the end of October 2023 by 1.2 percentage points, from 97.8% to 96.6% of GDP.

Though we have reduced our previous estimate of debt at the end of October 2023 by £2.3 billion, this change in the debt ratio was largely because of routine updates to our latest estimates of GDP, where forecasts were updated with data published in the Office for Budget Responsibility's (OBR's) Economic and fiscal outlook – November 2023 on 22 November 2023.

We explain how we calculate our net debt-to-GDP ratio figures in our article The use of gross domestic product (GDP) in public sector fiscal ratio statistics.

Public sector

In the UK, the public sector consists of six sub sectors: 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".

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 – November 2023 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.

Public sector banks

Unless otherwise stated, the figures quoted in this bulletin 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.

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 in the Office for Budget Responsibility's (OBR's) Economic and fiscal outlook – March 2023 report.  We will take account of the latest OBR forecast information published in their Economic and fiscal outlook – November 2023 report,in our January publication.

Local government and public corporations

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 financial year ending (FYE) 2024, we include:

• a £2.0 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 £1.6 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 2023 and FYE 2024 are 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.

Estimating the cost of the energy support schemes

Though fully reflected in our central government expenditure estimates, the costs of the individual energy support schemes are not separately identifiable in our source data on an accruals basis.

The UK government provided cash estimates on the cost of each of the energy support schemes for the financial year ending (FYE) March 2023 in its Energy Prices Act 2022 and expenditure on energy schemes – Q1 2023 statement, published on 8 July 2023.

In addition, the OBR provided estimates of the ongoing cost of the energy subsidy schemes in its March 2023 Economic and fiscal outlook monthly profiles (XLSX, 125KB).