By Vivienne Russell
21 May 2010
The Office for National Statistics has revised downwards its estimate of the money borrowed by the government in 2009/10.
According to the monthly Statistical Bulletin, published today, public sector net borrowing was £156.1bn compared with the initial estimates of £163.4bn.
The figures also show that public sector net debt rose to £893.4bn at the end of April 2010, up from £755.4bn at the same point last year. The current budget was in deficit by £9.3bn, £1.7bn higher than in April 2009.
Public sector net borrowing was £10bn in April compared with £8.8bn the previous year.
There was further good news for the government with tax receipts 7.2% higher than in the same month last year, although the independent Institute for Fiscal Studies cautioned that much of this increase could be ascribed to the one-off tax on bankers’ bonuses.
Gemma Tetlow, senior research economist at the IFS, said: ‘The good news in today's figures is that borrowing in 2009/10 is now thought to have been £7.5bn below last month's initial estimate.
‘This still leaves it at £156.1bn, or 11.1% of national income, and the IMF forecasts published last week suggest that, of all the advanced and emerging economies, only Ireland and Latvia will have a higher level of borrowing in 2010.’
She added that a key issue for the new coalition government would be the view of Sir Alan Budd and his colleagues at the Office for Budget Responsibility on how much permanent damage had been done to the public finances.
‘[Labour Chancellor] Alistair Darling's judgement in March was that this amounted to £69bn a year. The undershoot in borrowing last year in isolation might reduce this estimate, although many other factors, such as their assessment of the amount of spare capacity in the economy, will influence their final verdict. The government will then have to decide how fiscal policy should respond in the Budget on June 22,’ Tetlow said.
