Borrowing in November was £18.1bn

By Richard Johnstone | 21 December 2011

Government borrowing in November was lower than expected at £18.1bn, the Office for National Statistics revealed today.

The jump in borrowing between the months is due to the peak in the benefits bill, the ONS said. November is the month when winter fuel payments to older people, worth £200–£300, are made. Net expenditure on social benefits in November was £16.8bn, compared with £14.7bn in October.

Borrowing for the financial year so far stands at £88.3bn. This is down more than £10bn from £98.7bn for the same eight months in 2010/11. The Office for Budget Responsibility said that the government was on track to meet the latest 2011/12 borrowing projection of £127.1bn.

In its analysis of the figures, the OBR said that borrowing for November was expected to be around £19.7bn, but was lower thanks to strong growth in tax receipts. Tax income was 7.1% higher than a year earlier.

The nation’s debt has risen to £977.1bn, equivalent to 62.8% of gross domestic product.

The ONS also said today that it will make a decision ‘in due course’ on how to classify council borrowing as part of the reforms to the Housing Revenue Account system.

Local authorities are set to become self-financing for council housing, retaining their own locally raised rents and taking on a proportion of the housing debt. Around 138 authorities are expected to make a payment to government to ‘buy out’ the current system, totalling about £13.7bn.

The ONS states that the transactions will involve large cash transfers, but these will not affect the overall borrowing figures, as they are all within the public sector.

However, there are likely to be significant effects in some areas of public spending, with local authorities likely to use the Public Works Loans Board to borrow for the buy-out. If all £13.7bn were borrowed from the PWLB then central government might need to find an extra £5.2bn in cash, the ONS said.