Public Sector Finances, UK - August 2023 - Highest August Borrowing Since Monthly Records Began In 1993

22nd September 2023

Public sector net borrowing excluding public sector banks (PSNB ex) in August 2023 was £11.6 billion, £3.5 billion more than in August 2022 and the fourth highest August borrowing since monthly records began in 1993.

PSNB ex in the financial year to August 2023 was £69.6 billion, £19.3 billion more than in the same five-month period last year but £11.4 billion less than the £81.0 billion forecast by the Office for Budget Responsibility (OBR).

Public sector net debt (PSND ex) was £2,594.1 billion at the end of August 2023 and was provisionally estimated at around 98.8% of the UK's annual gross domestic product (GDP); this is 2.3 percentage points higher than in August 2022 and continuing at levels last seen in the early 1960s.

Excluding the Bank of England, public sector net debt was £2,358.7 billion or around 89.8% of GDP, £235.4 billion (or 9.0 percentage points) lower than the wider measure.

Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £5.9 billion in August 2023; this brings the financial year to August 2023 to £71.8 billion, £12.7 billion below the £84.5 billion forecast by the OBR.

Public sector net worth (PSNW ex) was in deficit by £617.8 billion at the end of August 2023; this compares with a £486.6 billion deficit at the end of August 2022.

Borrowing in August 2023
In August 2023, the public sector spent more than it received in taxes and other income, requiring it to borrow £11.6 billion. This was £3.5 billion more than was borrowed in August 2022 and is the fourth-highest August borrowing since monthly records began in 1993, behind those of August of 2020 and 2021, during the coronavirus (COVID-19) pandemic, and August 2009 following the global economic downturn.

Central government borrowing
Central government forms the largest part of the public sector and includes HM Revenue and Customs, the Department of Health and Social Care, the Department for Education, and the Ministry of Defence.

The relationship between central government's receipts and expenditure is the main determinant of public sector borrowing.

In August 2023, central government borrowed £8.3 billion, £1.2 billion more than in August 2022 but £1.1 billion less than the £9.4 billion forecast by the Office for Budget Responsibility (OBR) in their Economic and fiscal outlook - March 2023 report.

Central government receipts
Central government's receipts were £76.6 billion, £3.1 billion more than in August 2022 and £1.2 billion more than the £75.4 billion forecast by the OBR. Of this £76.6 billion, tax receipts were £57.6 billion, £2.7 billion more than in August 2022, with income taxes and Value Added Tax (VAT) both increasing by £1.2 billion.

A detailed breakdown of central government income is presented in our Public sector current receipts: Appendix D dataset.

Self-assessed income tax
In August, accrued receipts are usually high because of receipts from self-assessed income tax (SA) payments received after the July deadline. This month, SA receipts were £1.5 billion, £0.8 billion less than in August 2022.

This brings the total SA receipts for July and August 2023 combined to £13.3 billion, £1.7 billion more than in the same two months in 2022 and £0.9 billion more than the £12.4 billion forecast by the OBR.

Central government expenditure
In August 2023, central government's total expenditure was £84.9 billion, £4.3 billion more than in August 2022 and £0.1 billion more than the £84.8 billion forecast by the OBR.

Net social benefits
Net social benefits paid by central government in August 2023 were £23.5 billion, £2.7 billion more than in August 2022. In recent months we have seen large increases in benefit payments largely because of inflation-linked benefits uprating and cost-of-living payments.

For more information on these benefit payments, see UK Parliament's Benefit uprating 2023 to 2024 report and GOV.UK's Cost of Living Payments 2023 to 2024 guidance.

Interest payable on central government debt
In August 2023, the interest payable on central government debt was £5.6 billion, £3.1 billion less than in August 2022, and £2.2 billion below the OBR's forecast of £7.8 billion. This was the third highest interest payable in any August since monthly records began in April 1997, behind those of August of 2021 and 2022.

Read the full report HERE