Skip to content Skip to footer
Search

Loading Results

PwC comments on ONS December public sector finances figures

25/01/22

Hoa Duong, economist at PwC, says

Today’s data shows a continued improvement in the UK’s public finances. Government borrowing in December 2021 was £0.6bn less than the previous month and net debt was 13% lower than the OBR’s expectation for December 2021.

However, more radical steps need to be taken if the Chancellor wants to improve the financial outlook by the next Budget review in March. As restriction measures are lifted across the country, Rishi Sunak is under additional pressure to tighten his public finances as justification for continuing government support diminishes, but his task is not without challenges.

"According to today’s data, only around 3% of the Government budget was spent on all subsidies in December 2021, 24% lower than a year ago. So, savings need to come from elsewhere.

Therefore, all eyes are on National Insurance Contributions. Accounting for 20% of the government receipts in December, increasing National Insurance would potentially be a quick fix. However, it would be a significant extra burden for households as it would exacerbate the current rising cost of living for many.

"Despite this, we anticipate that the question is not if but when National Insurance will rise - with the challenge being to time any increase without further squeezing household budgets and impacting economic growth."

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 156 countries with over 295,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at PwC.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see how we are structured for further details.

© 2021 PwC. All rights reserved

Contact us

David Bowden

David Bowden

Manager, Corporate Affairs, PwC United Kingdom

Tel: +44 (0)7483 365049

Follow us