There was some good news in the September figures for public spending and borrowing. So far this financial year spending is only up 3%, a bit below the forecast. Meanwhile tax revenues are up 5%, usefully ahead of costs, even though they are down on forecast. Between April and September this year the government added £54 billion to total state borrowing, down £3.4 billion on the same period in 2010-11.
The Treasury tells us this means we are on track. The government should they say be able to limit additional borrowing to £122 billion for 2011-12, compared with £137 billion in the previous year. The government needs to redouble its efforts to explain to people that it is only trying to cut the growth rate in borrowing. It is not in the business of paying back debt. The pace of planned deficit reduction is quite slow in years one and two of the plan.
The more worrying figure was the Public Sector Net cash Requirement, which came in at £19.9 billion. The Treasury says not to worry. This was inflated apparently by interest payments on the debt. It is still cash outflow, and those interest payments are going to continue to rise, as the government continues to borrow more.
Over the year to June 2011 the number of public sector employees fell by 240,000, whilst the number of private sector employees rose by 264,000. The consolidated debt figure of £2.3 trillion which includes the state owned banks is still very high. It argues for the UK government to find ways of shedding more of its banking assets and liabilities. That is the quickest option to cut or limit the debt, and to cut the risks taxpayers are still running by owning these companies.