Public sector finances, UK: September 2024

• Borrowing – the difference between public sector spending and income – was £16.6 billion in September 2024, £2.1 billion more than in September 2023 and the third highest September borrowing since monthly records began in January 1993.

• The interest payable on central government debt was £5.6 billion in September 2024, £4.6 billion more than in September 2023; this was owing to the interest payable in September 2023 being exceptionally low at £0.9 billion because of movements in the Retail Price Index around that time, rather than September 2024’s interest being unusually high.

• Borrowing in the financial year to September 2024 was £79.6 billion, £1.2 billion more than at the same point in the last financial year and the third highest year-to-September borrowing since monthly records began in January 1993.

• Public sector net debt excluding public sector banks was provisionally estimated at 98.5% of gross domestic product (GDP) at the end of September 2024; this was 4.0 percentage points more than at the end of September 2023, and remains at levels last seen in the early 1960s.

• Excluding the Bank of England, debt was 91.2% of GDP, 5.0 percentage points more than at the end of September 2023 but 7.3 percentage points lower than the wider debt measure.

• Public sector net worth excluding public sector banks was in deficit by £731.3 billion at the end of September 2024, a £128.4 billion larger deficit than at the end of September 2023.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £13.2 billion in September 2024, £1.9 billion less than in September 2023.

The public sector spent more than it received in taxes and other income in September 2024, requiring it to borrow £16.6 billion, the highest September borrowing since 2021.

Initial estimates for September 2024 suggest that borrowing was £2.1 billion higher than September last year, and £1.5 billion higher than the £15.1 billion forecast by the Office for Budget Responsibility (OBR). This is the third highest September borrowing since monthly records began in January 1993.

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 September 2024, central government borrowed £13.0 billion, £2.2 billion more than in September 2023.

Central government receipts

Central government's receipts were £80.7 billion in September 2024, £3.3 billion more than in September 2023. Of this £3.3 billion increase in revenue:

• central government tax receipts increased by £3.9 billion to £60.5 billion, with increases in Income Tax, Corporation Tax and Value Added Tax (VAT) receipts of £1.8 billion, £0.8 billion and £0.6 billion, respectively

• compulsory social contributions decreased by £0.9 billion to £13.9 billion, largely because of the reductions in the main rates of National Insurance in early 2024

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

Central government expenditure

Central government spending data for September 2024 are provisional. There is uncertainty around these estimates until more detailed departmental information becomes available later in the year.

Central government's total expenditure was £93.7 billion in September 2024, £5.5 billion more than in September 2023. Of this overall £5.5 billion increase in spending:

• interest payable on central government debt increased by £4.6 billion to £5.6 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

• central government departmental spending on goods and services increased by £2.6 billion to £35.9 billion, as pay rises and inflation increased running costs

• payments to support the day-to-day running of local government increased by £0.5 billion to £10.6 billion; being both central government spending and a local government receipt, these intra-government transfers have no impact on overall public sector borrowing

• current grants abroad decreased by £0.9 billion to £0.4 billion, largely because there were no payments due to the European Union this month; payments are scheduled to resume in October 2024

• Net social benefits paid by central government decreased by £2.0 billion to £25.7 billion, where the usual increase caused by the annual uprating of inflation-linked benefits was more than offset by reduced spending on Winter Fuel Payments, partly because of the absence of one-off cost-of-living payments, which were included in September 2023 and partly because of the change in eligibility.

Winter Fuel Payments are recorded (on an accruals basis) each September when the eligibility of claimants is determined, although the cash will not be paid until November.

Interest payable on central government debt

In September 2024, the interest payable on central government debt was £5.6 billion, an increase of £4.6 billion compared with September 2023. This was because the interest payable in September 2023 was exceptionally low at £0.9 billion, rather than that of September 2024 being unusually high.

The large monthly changes in the Retail Price Index (RPI) since early 2021 have led to considerable volatility 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 £0.2 billion in September 2024, largely reflecting the 0.1% increase in the RPI between June and July 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 95% of the index-linked gilt stock.

Between June and July 2023, the RPI decreased by 0.6% causing the inflationary impact on index linked gilts in September 2023 to be negative and so reducing the impact of the underlying interest by £3.2 billion, rather than adding to it as is usual when prices are rising.

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.

The £16.6 billion borrowed in September 2024, combined with a downward revision of £1.1 billion to our previously published financial year-to-August 2024 borrowing estimate, brings our provisional estimate for the total borrowed in the financial year to September 2024 to £79.6 billion.

This was £1.2 billion more than was borrowed in the same six months last year, and £6.7 billion more than the £73.0 billion forecast by the Office for Budget Responsibility for this period. It is the third highest year-to-September borrowing since monthly records began in January 1993.

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.

Of the £79.6 billion borrowed by the public sector (excluding public sector banks) in the financial year to September 2024, central government borrowed £97.7 billion. This larger central government borrowing was partially offset by a £12.1 billion Bank of England (BoE) surplus and balanced by remaining subsectors.

The borrowing of both subsectors is affected by payments totalling £23.6 billion made by central government to the BoE in this period under its Asset Purchase Facility (APF) Fund indemnity agreement.

As with similar intra-public sector transactions, these payments are public sector borrowing neutral. They increase central government's borrowing by £23.6 billion in the financial year to September 2024, but reduce the borrowing impact of the BoE by an equal and offsetting amount.

Central government receipts

Central government's receipts were £490.6 billion in the financial year to September 2024, £16.4 billion (3.5%) more than in the same period last year. Of this £16.4 billion increase in revenue:

• central government tax receipts increased by £18.9 billion to £372.6 billion, with increases in Income Tax, Corporation Tax and Value Added Tax (VAT) receipts of £9.7 billion, £5.0 billion, and £2.4 billion, respectively

• compulsory social contributions decreased by £5.2 billion to £82.1 billion, largely because of the reductions in the main rates of National Insurance in early 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 provisionally estimated as £588.3 billion in the financial year to September 2024, £18.4 billion (3.2%) more than in September 2023. Of this overall £18.4 billion increase in spending:

• central government departmental spending on goods and services increased by £10.1 billion to £209.6 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £7.7 billion to £154.2 billion, largely because of inflation-linked benefits uprating

• payments to support the day-to-day running of local government increased by £5.6 billion to £75.0 billion; these intra-government transfers have no impact on overall public sector borrowing being both central government spending and a local government receipt

• central government net investment increased by £2.7 billion to £56.8 billion, and includes the regular payments from HM Treasury to the Bank of England APF Fund, which decreased by £0.5 billion compared with a year earlier

• current grants abroad decreased £4.0 billion to £2.5 billion, largely because of the timing of payments made to the EU

• subsidies paid by central government decreased by £3.3 billion to £13.9 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 £2.9 billion to £44.2 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

Local government

Initial estimates suggest that local government was in surplus by around £3.2 billion in the six months to September 2024, a £0.5 billion larger surplus than in the same period a year earlier. Our provisional monthly estimates for the UK are currently based on published budget data for England, Scotland, and Wales, with estimates included for Northern Ireland.

The public sector borrowed £121.9 billion in the financial year ending (FYE) March 2024. This was £1.4 billion less than the £123.3 billion borrowed in the FYE March 2023, but £7.8 billion more than the £114.1 billion forecast by the Office for Budget Responsibility (OBR).

Our borrowing estimate for the FYE March 2024 remains provisional; it is likely to be revised further over the coming months as we replace our provisional estimates of both receipts and expenditure with finalised data.

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 £52.3 billion, £25.0 billion less than in the FYE March 2023, while net investment increased by £23.6 billion to £69.5 billion over the same 12-month period.

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

Our sixth provisional estimate for the total borrowed in the financial year ending (FYE) March 2024 as a ratio of GDP is 4.4%, unchanged from our initial estimate published in the March 2024 release.

Our article, The use of 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 on 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. We explain this measure 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 3.

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 thorough and reliable measure for comparison of the UK's fiscal position over time.

The net debt-to-GDP ratio at the end of September 2024 was provisionally estimated at 98.5%, 4.0 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. Our blog explains why our estimates of the Debt to GDP ratio are susceptible to revision.

Public sector net debt excluding the Bank of England (BoE) was £2,560.5 billion at the end of September 2024, or around 91.2% of GDP, which is £206.0 billion (or 7.3 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 September 2024, we recorded the £96.7 billion difference between the £659.0 billion of reserves created to purchase its gilts (at market value at the time of purchase) and their £562.3 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 £731.3 billion at the end of September 2024. This compares with a £602.9 billion deficit at the end of September 2023.

The £128.4 billion reduction in PSNW ex over the last 12 months was largely because of a £168.2 billion increase in debt (PSND ex), partly offset by a £40.7 billion increase in public sector non-financial assets. 

If we exclude the public sector's £1,631.0 billion of non-financial assets, public sector net financial worth excluding public sector banks (PSNFW ex) reduced by £169.0 billion over the same period to a deficit of £2,362.2 billion. Where PSNFW ex is equivalent to public sector net financial liabilities (PSNFL ex) with the opposite sign.

Our Public sector net worth: Appendix O dataset, released on 20 September 2024, presents the balance sheet for the public sector consistent with the 2010 European system of national accounts (ESA 2010) (PDF, 6.4MB) and Eurostat's Manual on Government Deficit and Debt (MGDD). This dataset is updated quarterly, depending on the availability of data.

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: August 2024 bulletin, published on 20 September 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 in the financial year to August 2024

Since publishing our August 2024 release, we have reduced our estimate of public sector net borrowing (PSNB ex) in the first five months of the financial year by £1.1 billion to £63.0 billion. This change was because of regular updates to our central government data.

We have reduced our previous estimate of central government spending by £1.5 billion, largely because of a reduction to our previous estimate of departmental spending of goods and services.

This change was accompanied by a decrease to our estimate of total central government tax receipts by £0.2 billion, with a £0.6 billion reduction to our previous estimate of VAT receipts being largely offset by a £0.5 billion increase to our previous estimate of income tax receipts.

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

Since publishing our August 2024 release, our estimate of debt at the end of August 2024 is little changed, increasing by £0.1 billion to £2,768.1 billion.

Revisions to gross domestic product

This month, we have updated our previous estimates of nominal GDP with that published in our GDP quarterly national accounts, UK: April to June 2024 bulletin (30 September 2024).

GDP estimates in the most recent periods are higher than previously estimated, meaning that our headline ratios expressed as a ratio of GDP have reduced.

Most notably, our estimate of public sector net debt as a ratio of GDP at the end of August 2024 reduced by 1.2 percentage points from 100.0% to 98.8%.

Revisions to public sector net borrowing including public sector banks

Estimates of the net borrowing of public sector banks are derived from the profit and loss (P&L) account and balance sheet of these organisations, supplied to us by the Bank of England twice annually.

This month we have received the P&L covering the period January to June 2024 for the first time, enabling us to update previous estimates associated with public sector banks.

Following the improvements to our recording of interest receivable and payable within the public sector excluding public sector banks boundary introduced in September 2024, we have taken the opportunity to extend these improvements to our public sector banks inclusive measure of borrowing.

As a consequence of these updates, we have reduced our estimate of public sector net borrowing including public sector banks for the financial year ending March 2024 by £0.3 billion.

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), often referred to by commentators as "the national debt", 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. This is sometimes referred to as the "headline debt".

Unless otherwise noted, the debt figures quoted in this bulletin exclude public sector banks (PSND ex), while the UK government's legislated fiscal target has been based on a measure that excludes both public sector banks and the Bank of England (PSND ex BoE). This is sometimes referred to as the "underlying debt".

Public sector net financial liabilities

Public sector net financial liabilities (PSNFL) is 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.

Methodology guides

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

We also explain the recording of interest payable to holders of UK government gilts in the UK public sector finances in our Calculation of interest payable on government gilts methodology and our Use of gross domestic product (GDP) in public sector fiscal ratio statistics methodology.

Accredited official statistics

Public sector net borrowing, cash requirement and debt are accredited official statistics. These accredited official statistics were independently reviewed by the Office for Statistics Regulation in June 2017. They comply with the standards of trustworthiness, quality, and value in the Code of Practice for Statistics and should be labelled "accredited official statistics".

Official statistics

Public sector net financial worth and public sector net financial liabilities are both official statistics. These measures were introduced after June 2017, and so have not yet been reviewed by the Office for Statistics Regulation. 

Official statistics in development

Public sector net worth is labelled as "official statistics in development". Until September 2023, these were called "experimental statistics". Read more about the change in our guide to official statistics in development.

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 2024 report.

Bank of England

In September 2021, our Recent and upcoming changes to public sector finance statistics: August 2021 article explained improvements to our estimates of the Bank of England's (BoE's) contribution to our public sector measures.

In December 2024, we aim to include additional monthly data from the BoE, which will replace further instances where published annual data are used. These more frequent data will be used to provide more precise monthly estimates of the contribution of the BoE to the public sector finance aggregates.

For more information on this development, see Section 2: Short-term developments of our Looking ahead – developments in public sector finance statistics article. 

Local government and public corporations

Local government data for the financial year ending (FYE) March 2025 are provisional estimates for the UK, largely based on published budget data for England, Scotland, and Wales, and with estimates included for Northern Ireland.

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 generally higher than that reported in final outturn capital expenditure. Therefore, we 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

To reflect the most recently available data for housing benefits, we have applied further downward adjustments to budget data for current expenditure on benefits of £0.7 billion in the FYE 2024 and £1.7 billion in the FYE 2025.

Data for public corporations in the FYE 2024 are largely based on the OBR's Economic and fiscal outlook – March 2024 report, supplemented by in-year estimates for train operating companies, the Housing Revenue Account and surveyed public corporations.

Comparing our data with official forecasts

The independent 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.

On 29 August 2024, the Chancellor of the Exchequer announced that the autumn Budget will take place on 30 October 2024. The OBR will publish an updated set of forecasts on the same day.