Yesterday, I did a post on monthly UK government borrowing. Rather naively, I claimed that HMG had a good month. The slapdown came quickly. I received the following comment from someone who called themselves "It doesn't add up":
The OBR made the following comments:
Public sector net borrowing (PSNB) recorded its largest ever monthly surplus in April, although at £16.5 billion it was smaller than the £20.0 billion outside economists had on average expected.
The record surplus reflects:
a one-off reduction in PSNB of £28 billion related to the transfer of the Royal Mail’s historical pension deficit, plus a share of its pension fund’s assets into the public sector at the start of April; and
a one-off reduction in PSNB resulting from a £2.3 billion capital receipt following the closure of the Special Liquidity Scheme (SLS). This relates to fees received by the Bank of England that are being transferred to central government.
Abstracting from these two factors, PSNB in April would have been around £4.7 billion higher than a year ago. In part this reflects predictable weakness in onshore corporation tax receipts, as many firms paid the final instalment payment on their 2011 profits. It also reflects a £2.1 billion rise in central government spending, which in percentage terms is slightly bigger than the increase we forecast for the year as a whole in our March 2012 Economic and Fiscal Outlook (EFO). The other major factor was a £2.0 billion fall in the local authority surplus since last April.
At this stage of the year central government spending has to be estimated without the benefit of outturn data from departments. Local authority borrowing figures are also volatile and prone to revisions. So, notwithstanding the size of the aggregate underlying deterioration since last April, it is far too soon to conclude whether the pattern will persist over the rest of the financial year.
The comment finished off with a condemnation:
Unlike you to miss these accounting tricks.
Why did I miss it? I fear that I came down with a case of confirmation bias. I really want to believe that we are making progress towards reducing the deficit. So, when I saw the recent data, I was happy to post it. There was no need to go any further. It told me what I wanted to hear.