The initial full-year estimate of government borrowing in 2021-22 is £151.8 billion, less than half the 2020-21 figure but £24.0 billion above our March forecast (and £16.7 billion above it on a like-for-like basis). This surprise relative to forecast is largely due to higherthan-expected central government spending, which outweighed stronger-than-expected receipts. The like-for-like surprise could narrow as accrued spending figures are revised over the next six months. That said, central government cash borrowing also exceeded our forecast by £20.0 billion.
Public sector net borrowing (PSNB) was £18.1 billion in March, down £8.8 billion on the previous year. PSNB was £151.8 billion in 2021-22 as a whole – less than half its 2020-21 level of £317.6 billion but £24.0 billion (18.8 per cent) higher than our latest forecast. This is the first estimate from the ONS and can be expected to be revised over the coming months.
Central government accrued receipts (excluding PSNB-neutral transfers related to quantitative easing) raised £822.6 billion in 2021-22, up £109.2 billion (15.3 per cent) on 2020-21 and £6.5 billion (0.8 per cent) higher than our March forecast. This reflects strength across most taxes, thanks to strong growth in the cash size of the economy.
Central government spending (excluding PSNB-neutral local authority grants) was £847.1 billion in 2021-22, down £43.0 billion (4.8 per cent) on 2020-21 but £29.2 billion (3.6 per cent) higher than forecast. This surprise reflects higher-than-expected central government consumption and net investment, but £7.3 billion of the investment surprise relates to anticipated future revisions. • The central government net cash requirement for 2021-22 was £129.2 billion, £205.3 billion lower than 2020-21 but £20.0 billion higher than our March forecast.
Public sector net debt (PSND) stood at 96.2 per cent of GDP in 2021-22, 0.6 percentage points higher than our March forecast thanks to the higher cash requirement, partially offset by upward revisions to the nominal GDP denominator.
Revisions: Borrowing in the first eleven months of 2021-22 was revised down by £4.7 billion thanks largely to lower spending on government consumption and net social benefits.
(Office for Budget Responsibility)