A bit more on borrowing less

George Osborne George Osborne has a busy week ahead of him

True to form, the borrowing numbers have changed again with the release of the March public finance figures - the last set of monthly numbers for the 2012-13 financial year. And this time the revision has been in a helpful direction for George Osborne.

I pointed out yesterday that revisions had already eliminated the £100m fall in the chancellor's preferred measure of borrowing between 2011-12 and 2012-13.

I also noted that the figures were likely to change again today - and though his critics would be hoping the numbers would go up, it was perfectly possible, on past experience that this year's borrowing would be revised down.

That's what has happened. The new figures show borrowing in 2012-13 (excluding transfers from the Bank of England and the Royal Mail) will be £120.6bn, slightly below the Budget forecast of £120.9bn. So borrowing last year was not £100m lower than the year before but a heady £300m lower - a difference of roughly 0.02% of Britain's GDP.

So the chancellor's fans will say: "I told you so." And most economists will say: "So what?"

Two things worth remembering: first, these figures, too, will change.

The March numbers are especially subject to revision, because most government departments and local authorities don't really know, yet, exactly how much they spent in 2012-13. There's a huge amount of guesswork involved. Which is one reason why the 2011-12 borrowing figure has fallen by more than £5bn in the past 12 months.

The borrowing figure for the last year of the Labour government, 2009-10, fell by a similar amount, just between Alistair Darling's last Budget in spring 2010 and George Osborne's first.

The other point is that even if borrowing is very slightly lower than it was in 2011-12, it is still a great deal higher than the Chancellor planned back in 2010. The 2012-13 borrowing forecast built into his first Budget was £89bn.

Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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  • rate this

    Comment number 13.

    This article omits mention of two big factors in 2012/13

    "These include the £2.3 billion transfer to Government of the final profits of the Special Liquidity Scheme (SLS) and the £2.3 billion receipt from the 4G spectrum auction."


    So a £300 million improvement suddenly looks like a £4.3 billion rise in numbers which are now a statistical version of muddied water

  • rate this

    Comment number 4.

    This figure was manipulated. In the telegraph they say this "Ministers have admitted that this year's fall in borrowing was only possible because the Treasury pushed some departmental spending into the next financial year, and delayed payments to bodies like the World Bank."

  • rate this

    Comment number 14.

    All this austerity, yet borrowing has hardly shrunk at all.

    We're all paying more tax to pay for the mistakes of bankers.

    Osborne - where has the money gone ?

  • rate this

    Comment number 8.

    Another year and result nowt.

    By delaying expend that will still need spending GO has his political victory, but the cost! Personal finances are tanking and there is no growth. there is no prospect of deficit reduction without growth and tax receipts. We have a political not economic chancellor and its causing us all pain no gain

  • rate this

    Comment number 20.

    There is no point in pursuing this subject.. We ALL know how this will
    all end.... the steady decline of the quality of life... the standard of
    living that MY generation have enjoyed.. We must move on and
    prepare future generations for the shock of not having the same
    quality and standards that their parents enjoyed... (perhaps someone
    will start to get angry enough to do something)......


Comments 5 of 148



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