Budget 2013: How has borrowing not risen this year?

A money lending shop in Brixton
Image caption The government is pushing some of its spending into next year to cut this year's borrowing

It may not sound like a big shock but it was: the government announced it would borrow about the same amount in this financial year as it did last year.

Economists and politicians were already surprised that it was forecast not to rise last December, and things have got worse since then.

At the time, the independent Office for Budget Responsibility (OBR) predicted that the auction of fourth generation mobile phone licences would raise £3.5bn. In the event, the auction only raised £2.3bn.

Also, experts were expecting more borrowing because of the lack of economic growth in the UK.

Less growth usually leads to a fall in the amount the government takes in tax.

But in the Budget, it turned out that the amount of borrowing for the year to the beginning of April 2013, excluding certain one-off factors such as the transfer of the Royal Mail pension scheme to the Treasury, was unchanged from last year at £121bn.

Actually, Robert Chote, head of the OBR, said the relevant figures suggested a fall from £121bn last year to £120.9bn this year.

But he added that the £100m fall was "fiscally and statistically insignificant" and the Treasury figures did not even give the decimal place, rounding both figures instead to £121bn.

Not easy

So how has the government managed to keep borrowing stable?

It hasn't been easy.

The main part of it has been that the government expects Whitehall departments to underspend by a whopping £11bn, which is £3.4bn more than they expected to underspend in December.

That's a big number - £11bn is about the amount spent in a year by the entire Home Office. The OBR itself said it was very unusual for government departments to underspend by so much compared with plans made a year ago.

Indeed, the OBR was so worried about this underspend that it asked the government for more details of where it came from.

Clearly, some of the money was a genuine underspend: money that departments were not spending in the current year and would not spend in the future. This always happens because there are big penalties for departments that exceed their budgets, so they usually leave a buffer.

A big component was £3.9bn that departments decided to return to the Treasury because they wanted to spend it next year or the year after instead, which they are allowed to do under the relatively new Budget Exchange scheme.

Cheques in the post

At least another £1.6bn is a result of the government pushing forward some spending it was planning to make this year into next year instead.

That included things like regular payments to international organisations such as the World Bank, which were due to be made in the last few weeks of this financial year, but the government has decided to make them at the start of the next one instead.

However, the OBR warns there is some risk that these payments could still be made when they were originally planned.

The whole thing is reminiscent of the time on the Simpsons when, in a future world, Lisa is US President and needs Bart to help her through a debt crisis by assuring debtor nations that the cheques are in the post.

As BBC economics editor Stephanie Flanders says: "You have to wonder whether Mr Osborne will continue to talk quite so much about the fiscal fiddles that went on in the Gordon Brown era."

But it is also storing up problems for next year.

The OBR is currently forecasting about £120bn of borrowing for next year. Could pushing spending into next year just be delaying the chancellor's problems?

And anyway, the chancellor is supposed to be trying to cut the deficit, not just prevent it from rising.

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