Government’s annual spending has exceeded its income for the last 15 years. To fund the deficit, government borrows by issuing government bonds, known as gilts, through the UK Debt Management Office (DMO) to large investors in the capital markets, or by encouraging savers to invest in National Savings & Investment (NS&I) retail products such as Premium Bonds. The Government has a significant amount of debt outstanding from financing past annual deficits and it has targets to reduce levels of borrowing and debt by 2020−21. Public sector net debt (PSND), government’s preferred measure for reporting on the public finances, was around £1.7 trillion at March 2017. By comparison, the latest Whole of Government Accounts (WGA), which provides a financial reporting view of the public finances, reports that total debt from borrowing was £1.3 trillion at March 2016: around £47,000 for each UK household. Interest on debt cost government £222 billion in the period 2009−10 to 2015−16. As government’s economic and finance ministry, HM Treasury has overall responsibility for government’s financial strategy and fiscal policy. The Treasury published WGA 2015−16 in July 2017, 16 months after the financial year end.
25 January 2018