New ONS data confirms £11.5 billion government overspending during first half of the year 22 October 2024 Central government spending is already £11.5 billion above the OBR’s March forecast, six months into the fiscal year, highlighting the scale of the public finances challenge facing the Chancellor ahead of her first Budget next week, the Resolution Foundation said today (Tuesday). The vast majority (£9.7 billion) of central government overspending in the current financial year comes from spending on good and services, typical higher pay and running costs. The scale of this overspend tallies with the £22 billion ‘black hole’ identified by the Treasury back in July. But while those day-to-day spending pressures continue to build, the impact on borrowing was partly offset by lower benefit payments reflecting cuts to Winter Fuel Payments which are recorded in September, when eligibility is determined, rather than in November when they’re paid. Tax receipts have also come in £4.9 billion above the OBR’s in the six months to September. Along with higher than expected debt interest, overall public sector borrowing was £6.7 billion higher than the OBR’s forecast at the time of the Budget in March. Cara Pacitti, Senior Economist at the Resolution Foundation, said: “Six months into the financial year, Britain is borrowing £6.7 billion more than expected at the time of the Budget in March. This reflects central government spending which is £11.5 billion higher than anticipated, largely due to public sector pay rises and higher running costs. “Today’s data highlights the scale of the public finances challenges facing the Chancellor as she grapples with overspending today, the need to avoid austerity in the future, and having to fund extra public service spending through tax rises.”
