Public sector finances ‘just about managing’
The government needs to work hard to ensure that public sector finances continue to grow, ICAEW says in the wake of the latest public sector finances figures released by the Office of National Statistics.
Commenting on the public sector finances for July 2018 from the ONS, Ross Campbell, ICAEW Public Sector Director, said: “The continued growth throughout July is in line with projected forecasts for 2018. The publication of the 2018 Fiscal Sustainability Report by the Office from Budget Responsibility has made clear that the public sector finances are not sustainable over the long run and with interest rates rising the prospect for the government being able to meet its obligations does not appear promising. Alongside this, there is economic uncertainty and increasing pressure on the government to strike a deal with the EU over the ever-looming exit.”
The ONS figures revealed that so far in this financial year (April 2018 to July 2018), the public sector has borrowed £12.8bn; that is, £8.5bn less than in the same period in 2017, representing the lowest year-to-date borrowing for 16 years. Borrowing in the latest full financial year (April 2017 to March 2018) was the lowest financial year borrowing for 11 years.
Over the next 12 months (April 2018 to March 2019), the Office for Budget Responsibility, which produces the official government forecasts, expects the public sector to borrow £37.1bn; around one quarter of what it borrowed in the financial year ending March 2010 (April 2009 to March 2010), at the peak of the financial crisis.
“The UK state is like a just-about-managing household, struggling to pay the rising bills for public services and with nothing put by for emergencies,” Campbell said. “The Chancellor must start focusing more on the long term to ensure that public sector finances are put on a sustainable footing.”
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