There was a marked rise in public sector borrowing in October, official figures have revealed.
The Office for National Statistics today published its last public finance bulletin before the Autumn Statement on December 5. This showed that the government borrowed £8.6bn in October, up dramatically from £5.9bn in the same month last year.From April to October this year, public sector net borrowing totalled £73.3bn, £5bn higher than in the same period for 2011.
The current budget deficit also rose, hitting £6.7bn in October compared with £4.4bn the previous year.
The amount of revenue collected increased. A total of £47.5bn came into the Treasury, up almost £1bn on last October. Over the year to date, £300.1bn of revenue has been collected, a rise of £1.2bn or 0.4% on last year. However, corporation tax receipts were down on last year by almost 10%.
A Treasury spokesman said: ‘The economy is healing, but it still faces many challenges.
‘These numbers illustrate that, but also show the government's plans to bring spending under control are on track for the year.’
Rowena Crawford, senior research economist at the Institute for Fiscal Studies said the figures were likely to ‘result in an unpleasant feeling of déjà vu for the chancellor' as he prepares for next month's Autumn Statement.‘As was the case last year, a worse-than-expected decline in corporation tax receipts in October has contributed to an overall picture of lower-than-expected growth in revenues so far this year,’ she said.
Crawford added that, unlike last year, this year’s level of underspending was insufficient to offset weaker-than-expected growth in revenue.
‘If the trends in central government receipts and non-investment spending were to continue for the remainder of 2012-13, borrowing would come in £13bn higher than forecast by the Office for Budget Responsibility in March.’
But Unison general secretary Dave Prentis said the rise in borrowing proved that the government’s austerity programme was not working.
‘It is madness that we are borrowing to keep people on the dole rather than investing to create jobs,’ he said.
‘It is time for the government to ditch austerity and give our economy the shot in the arm it so desperately needs. A stimulus package that would protect jobs and end the public sector pay freeze would help to boost much-needed spending.’
