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Public Sector Borrowing Requirement

Volume 24: debated on Tuesday 25 May 1982

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asked the Chancellor of the Exchequer if, pursuant to the answer on 13 May 1982 to the right hon. Member for Heywood and Royton, Official Report, c. 936, concerning the public sector borrowing requirement, he will now make a statement on the investigations into the reasons why the monitoring of public expenditure did not disclose so large a change in such a short time.

[pursuant to his reply, 24 May 1982, c. 225.]: The main areas of shortfall were in the central Government borrowing requirement and in local authorities market and overseas borrowing. In the case of the central government, the effect of the Civil Service dispute on the figures for revenue and expenditure made the information available in February much more difficult than usual to interpret. The Budget forecast outturn of local authorities' borrowing took account of a survey carried out in January in which local authorities were asked to predict their borrowing in the final quarter of the financial year; the results proved to be a considerable overstatement.

asked the Chancellor of the Exchequer whether the public sector borrowing requirement forecast for 1982–83 assumed that the contingency reserve in his public expenditure plans would be spent; whether his latest information indicates there will be a further substantial shortfall similar to that in 1981–82; if so, whether he is proposing to take action to prevent such a shortfall; and if he will make a statement.

[pursuant to his reply, 24 May 1982, c. 225]: The PSBR forecast for 1982–83 at the time of the Budget did assume that the contingency reserve would be fully spent. It is too soon yet to say whether this will prove to be correct. It is not, and never has been, an object of Government policy to spend the reserve, which is a control on fresh decisions to incur expenditure that cannot be accommodated within existing programmes. Until more is known about the reasons for the PSBR shortfall in 1981–82 it is not possible to assess the consequences for 1982–83.