ONS Chief Economist Comments on UK Public Sector Finances Figures

Grant Fitzner has summarised the latest monthly public sector finances data, pointing to borrowing that remains historically high in cash terms despite year-on-year improvements in some months.

The Office for National Statistics has published its latest monthly public sector finances bulletin, with ONS Chief Economist Grant Fitzner noting that monthly public sector net borrowing — while down on the same month a year earlier — remains among the highest for that specific calendar month since comparable records began. The figures, published jointly with HM Treasury, cover public sector net borrowing, net debt, and the current budget position across the whole public sector, excluding public sector banks.

The picture isn’t uniform month to month. In some periods, the figures show that rises in central government tax and National Insurance receipts have been more than offset by higher spending on public services, benefits and debt interest, pushing borrowing up year-on-year. But in others — above all January, when self-assessed income tax payments fall due — the public sector has recorded its strongest monthly surplus since monthly records began, with spending broadly flat as lower debt interest partly offset higher costs elsewhere.

Across the first ten months of one recent financial year, cumulative borrowing came in lower than in the same period a year earlier, according to Fitzner’s commentary, even as individual months showed elevated figures. The OBR publishes its own monthly assessment of whether these outturns are broadly in line with its fiscal forecasts, and changes in the ONS data can affect judgements about whether the government’s fiscal rules are on track.

For Kent, the numbers matter indirectly but concretely. National borrowing levels shape the funding environment for Kent County Council, Medway Council and the NHS Kent and Medway Integrated Care Board through central government grant settlements and departmental spending decisions. Higher debt interest costs — driven by inflation and gilt yields — can crowd out other public spending, leaving less room for increases in local government grants, transport funding, education budgets and health allocations to the county. Equally, months where tax receipts outperform and borrowing undershoots can ease that pressure, at least at the margin.

The ONS public sector finances statistics are compiled on a national accounts basis using accruals accounting. They do not provide county-level figures, so Kent residents and councils cannot read their own position directly from the data — but the national fiscal conditions these figures describe set the ceiling on what local services can expect.