Recent figures from the ONS and HM Treasury show that the current budget was in deficit by £11.5bn in December 2009, £0.4bn more than in December 2008. Government net borrowing, the total of central and local government and public corporations together, was £15.7bn, £1.9bn more than in December 2008, when it was £13.8bn. The public sector net cash requirement, again a total of central and local government and public corporations, was £23.6bn, £2bn more than the previous year and net debt was £870bn, equivalent to 61.7% of GDP compared to 60.1% for November and 51.7% for December 2008.
If the Goverment financial interventions are excluded public secor net borrowing was £50.3bn and net debt was £740.6bn from £596.9bn in 2008.
Looking at the public sector finances in terms of the current financial year which helps to smooth out any volatility in monthly data which can often mislead, the current budget deficit is £93.4bn, the public sector net borrowing was £119.9bn, £56.3bn more than the same period of 2008-9. Net borrowing excluding Goverment financial interventions was £127.9bn, £57.8bn higher than the same period 2008-9. Public sector net cash requirement was £120.5bn, compared to a cash requirement of £51.4bn in 2008-9. Public sector net investment was £4.2bn compared with £2.7bn lastb year.
During December the Government also subscribed £5.7bn to Lloyds Banking Group rights issue and £25.5bn to the Royal Bank of Scotland group, £6.4bn of which will be treated as a capital grant. These will increase the central government net cash requirement but will reduce public corporations' net cash requirement correspondingly.
The Institute of Fiscal Studies said that the Government will not have to borrow as much as expected in the Pre-Budget Report but also that next month's figures will include self-assessment returns for 2008-9, Corporation Taxes and NICs on bonuses for this month.
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