Cynnwys
1. Main points
- General government net borrowing (or deficit) was £93.4 billion in the financial year ending March 2015 (5.2% of Gross Domestic Product (GDP)), a decrease of £8.2 billion compared with the financial year ending March 2014.
- General government gross debt was £1,600 billion at the end of the financial year ending March 2015 (88.5% of GDP), an increase of £78.9 billion compared to the end of the financial year ending March 2014.
- This release is fully consistent with the latest data transmission on UK deficit (or net borrowing) and debt that the UK and other European Union (EU) Member States are required to report quarterly to the European Commission.
- The figures for 1997 onwards in this bulletin are fully consistent with the data published in the Public Sector Finances bulletin of 19 June 2015.
2. Background
The EU Government Deficit and Debt statistical bulletin is published quarterly in January, April, July and October each year, to coincide with when the UK and other European Union (EU) Member States are required to report on their deficit (or net borrowing) and debt to the European Commission.
Article 126 of the Treaty on the Functioning of the European Union (EU) obliges member states to avoid excessive budgetary deficits. The Protocol on the Excessive Deficit Procedure, annexed to the Maastricht Treaty, defines two criteria and reference values with which Member States’ governments should comply. These are:
a deficit (net borrowing) to Gross Domestic Product (GDP) ratio of 3%
a debt to GDP ratio of 60%
The deficit is a measure of how much the government has to borrow to cover its expenditure once revenue has been netted off, for this reason it is also known as net borrowing. The monetary values quoted are in current prices, that is, they represent the price of borrowing in the year to which they relate without any adjustments for inflation. Thus for comparisons over time the figures as a percentage of GDP (also measured in current prices) are used to provide a comparable time series.
The source data, and therefore the debt and deficit figures published in this bulletin (for the time period 1997 onwards), are the same as those published in the Public Sector Finances, May 2015 statistical bulletin published on 19 June 2015. Although the Public Sector Finances bulletin now includes general government (or Maastricht) debt and deficit figures there are two key differences between the main borrowing and debt measures published in the Public Sector Finances and the deficit and debt figures published in this bulletin:
this bulletin includes only debt and deficit recorded to central and local government, whereas the UK Public Sector Finances’ measures also include the debt and deficit of other public sector bodies
this bulletin reports gross debt, that is the financial liabilities of central and local government, whereas the Public Sector Finances’ headline measure is net debt, that is the financial liabilities minus liquid assets (i.e. official reserve assets and other cash or cash-like assets)
3. Summary of general government net borrowing and gross debt
Summary of general government net borrowing and gross debt
This section provides the latest headline data for deficit (net borrowing) and debt, and supporting information.
The Public Sector Finances, May 2015 statistical bulletin published estimates for the headline measures of general government net borrowing and general government gross debt on 19 June 2015. This bulletin provides further information of these estimates and presents them in the context of the European Union (EU) requirements.
Table 1 shows the headline measures on a financial year and calendar year basis both as £ billion values and as a percentage of Gross Domestic Product (GDP).
Table 1: Government Deficit and Debt
| Financial years | 2007/08 | 2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 | 2013/14 | 2014/151 |
| General government deficit £bn | 45.8 | 103.1 | 163.3 | 144.0 | 124.7 | 126.0 | 101.6 | 93.4 |
| as a percentage of GDP | 3.1 | 6.9 | 10.9 | 9.1 | 7.7 | 7.6 | 5.9 | 5.2 |
| General government debt at nominal values £bn | 640.7 | 823.3 | 1073.8 | 1212.1 | 1345.2 | 1420.6 | 1521.2 | 1600.0 |
| as a percentage of GDP | 42.8 | 54.8 | 71.5 | 76.9 | 82.6 | 85.4 | 87.8 | 88.5 |
| Calendar years | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| General government deficit £bn | 44.5 | 77.6 | 160.4 | 150.8 | 123.5 | 137.6 | 98.3 | 103.2 |
| as a percentage of GDP | 3.0 | 5.1 | 10.8 | 9.7 | 7.6 | 8.3 | 5.7 | 5.8 |
| General government debt at nominal values £bn | 646.2 | 786.3 | 975.3 | 1190.4 | 1323.7 | 1420.6 | 1495.7 | 1600.9 |
| as a percentage of GDP | 43.6 | 51.8 | 65.8 | 76.4 | 81.8 | 85.8 | 87.3 | 89.3 |
| Source: Office for National Statistics | ||||||||
| Notes: | ||||||||
| 1. 2014/15 refers to the financial year ending March 2015. | ||||||||
Download this table Table 1: Government Deficit and Debt
.xls (26.1 kB)General government net borrowing
In the financial year ending 2015, the UK government deficit (net borrowing) was £93.4 billion (5.2% of GDP). This represents a decrease of £8.2 billion since the financial year ending 2014, and is the lowest value since the financial year ending 2008 when it was £45.8 billion (3.1% of GDP).
Although deficit has been above the Maastricht reference value (of 3.0%) since 2008, the financial year ending 2015 is the fifth annual reduction in net borrowing as a proportion of GDP since the financial year ending 2010 when it was 10.9%.
In the calendar year 2014, the UK government deficit (net borrowing) was £103.2 billion (5.8% of GDP). This represents an increase of £4.9 billion since 2013. However, cash transfers from the Asset Purchase Facility reduced the deficit by £18.6 billion in 2013 and only £8.7 billion in 2014. If these cash transfers are excluded then the deficit in the calendar year 2014 was £5.0 billion lower than 2013.
The long term general government net borrowing as a percentage of GDP is illustrated in Figure 1.
Figure 1: General government net borrowing (‘deficit’) as a percentage of GDP
Source: Office for National Statistics
Notes:
- GDP = Gross Domestic Product
- 2014/15 refers to the financial year ending March 2015
General government gross debt
At the end of the financial year ending 2015, UK government gross debt was £1,600.0 billion (88.5% of GDP). As a proportion of GDP, this is the 12th consecutive annual increase. The general government gross debt first exceeded the 60% Maastricht (Excessive Deficit) reference value in the financial year ending 2010 when it was £1,073.8 billion (71.5% of GDP).
At the end of the calendar year 2014, UK government gross debt was £1,600.9 billion (89.3% of GDP). This represents an increase of £105.2 billion since the end of 2013.
The long term general government gross debt as a percentage of GDP is illustrated in Figure 2.
Figure 2: General government gross debt as a percentage of GDP
Source: Office for National Statistics
Notes:
- GDP = Gross Domestic Product
- 2014/15 refers to the financial year ending March 2015.
4. Recent events and methodological changes
Foreign Exchange Trading Fines
A number of UK banks were fined in November 2014 by the Financial Conduct Authority (FCA) for failures in their foreign currency operations. The fines amounted to £1.1 billion and these are included in Government receipts, and reduce the deficit (net borrowing) in the financial year ending 2015.
Multilateral Development Banks
The UK Government subscribes to international institutions that provide loans for economic and social development activities in developing countries. These institutions are referred to as multilateral development banks; examples are the International Development Agency (IDA), the European Bank for Reconstruction and Development (EBRD) and the African Development Banks (AfDB).
In this report, the treatment of UK Government subscriptions to the IDA has changed to record them as capital transfers (which impact net borrowing) instead of the previous treatment as equity injections (which don't affect net borrowing). The impact of this change is to increase net borrowing by £1.1 billion in the financial year ending 2015. All years from 1997 are affected.
Full details of the classification decision underlying this change is available on the ONS website.
Bank of England Asset Purchase Facility Fund
The Chancellor announced on 9 November 2012 that it had been agreed with the Bank of England to transfer to the Exchequer the excess cash in the Asset Purchase Facility Fund. In line with European guidance ( from Eurostat ) the amount of cash that reduces net borrowing is limited by the entrepreneurial income earned by the Bank of England in the previous year.
In the financial year ending 2015 there was a £10.7 billion transfer from the Asset Purchase Facility to HM Treasury, all of which affected net borrowing.
In the financial year ending 2014 there was a £31.1 billion transfer from the Asset Purchase Facility to HM Treasury. The Bank of England entrepreneurial income for the financial year ending 2014 was calculated as £12.8 billion, and this is the amount of Bank of England dividend payments that impacted on net borrowing (although only £12.2 billion of the dividend payments related to the Asset Purchase Facility).
Lloyds Banking Group
On 17 September 2013 the UK Government began selling part of its share holding in Lloyds Banking Group. The sale of the shares does not directly impact on general government net borrowing or general government gross debt because it is purely a financial transaction exchanging equity for cash.
The cash received from the September 2013 sale of the government’s 6% stake (at 75p a share) was £3.2 billion.
A further sale was held on the 23/24 March 2014 of a 7.5% stake which raised £4.2 billion.
Following the March 2014 sale of shares Lloyds Banking Group was reclassified from being a public financial corporation to a private financial corporation.
Between December 2014 and March 2015 small ongoing sales of shared have raised a further combined £1.7 billion.
Nôl i'r tabl cynnwys5. International comparability
Under the Excessive Deficit Procedure, all European Union (EU) Member States report their latest detailed deficit and debt information to the European Commission twice a year. Supporting statistical information, including deficit and debt values, are reported quarterly. Both the biannual and quarterly returns are published by Eurostat (the European statistical agency) on their website. The debt figures in this statistical bulletin will be published by Eurostat on 22 July 2015 and the deficit figures in this statistical bulletin will be published by Eurostat on 23 July 2015.
The tables in this bulletin present the UK Government debt and deficit position at the end of both the financial and calendar years. The United Kingdom, uniquely within the European Union, is assessed against the deficit and debt on a UK financial year basis (i.e. April to March). In June 2015, the UK provided to Eurostat first estimates for the financial year ending 2015, and revised estimates for the calendar year 2014 (originally reported in March 2015).
The UK figures may be compared with those of other EU Member States on the Government Finance Statistics section of the Eurostat website.
The latest UK government deficit and debt figures exceed the reference values set out in the Protocol on the Excessive Deficit Procedure. According to the last deficit and debt figures published on 21 April 2015, 12 Member States had a deficit exceeding the 3% of GDP reference value in 2014, and 16 Member States had gross debts exceeding the 60% of GDP reference value as at the end of 2014.
While the key statistics provided to Eurostat are those of general government consolidated gross debt and general government net borrowing (or deficit), supplementary government finance statistics are also supplied by Member States. A full set of government finance tables provided by the UK to Eurostat in June 2015 are included in this release.
Nôl i'r tabl cynnwys6. Revisions
Table M8R presents the revisions to key aggregates since the last publication of the EU Government Deficit and Debt Return in April 2015. Revisions to the data are consistent with revisions incorporated within the Public Sector Finances statistical bulletin since March 2014.
These revisions are predominantly due to updated data sources. Key methodological changes that effect data movements are described under ‘Recent events and methodological changes’.
Nôl i'r tabl cynnwys7. We value feedback
The public sector finances can be complex. In order to make sure these important statistics are accessible to all we need users to provide us with feedback on how best to explain concepts and trends in the data. Please contact us at: psa@ons.gov.uk
Nôl i'r tabl cynnwys