12. Looking ahead

This section presents information on aspects of data or methodology that are planned but not yet included in the public sector finances.

Developments in public sector finance statistics

In our 2018 article Looking ahead: developments in public sector finance statistics, we provide users with early sight of those areas where the fiscal statistics may be significantly impacted upon by methodological or classification changes during the coming 24 months.

We plan to publish an update to this article on 31 May 2019. In this article we list a number of short-term areas of work that we aim to implement in public sector finances statistics within 18 months from the date of this publication. These are:

treatment of student loans

presentation of pension data on a gross basis

International Monetary Fund’s Government Finance Statistics framework

treatment of depreciation

continuous development of public sector net financial liabilities

recording of leases

The article also provides some detail on the areas of planned medium and longer-term development.

Accounting for student loans: how we are improving the recording of student loans in government accounts

On 17 December 2018, we announced our decision on how we will treat student tuition fee and maintenance loans in the government’s accounts. We have published a blog explaining our role and why we have taken this decision.

In addition, we have published a technical note, giving further information about how we came to our decision.

It is anticipated that implementation of this decision into our headline statistics will take some time and that any change will be reflected in the public sector finances in September 2019.

Company tax credits

In conjunction with HM Revenue and Customs (HMRC), we are currently reviewing our recording of company tax credits. We will announce the findings of this review and introduce any data revisions at the earliest opportunity.

Bank of England Asset Purchase Facility Fund

In the financial year ending March 2019, £8.0 billion in dividends were transferred from the Bank of England Asset Purchase Facility Fund (BEAPFF) to HM Treasury. As with other such transfers, central government net borrowing in this period was reduced by an amount equivalent to the transfer, while the net borrowing of Bank of England was increased by an equal and offsetting amount, with no impact at a public sector borrowing level.

In conjunction with HM Treasury, we are currently reviewing our recording of these interest payments and dividends and we will announce the findings of this review at the earliest opportunity. We expect any data revisions that arise as a result of this exercise to be public sector net borrowing neutral.

Clinical Negligence Indemnity Cover

On 1 April 2019, the government announced the Clinical Negligence Scheme for General Practise (CNSGP), operated by NHS Resolution on behalf of the Secretary of State for Health and Social Care.

The scheme provides comprehensive cover to all General Practitioners (GPs) and their wider practise team for clinical negligence relating to NHS services occurring from 1 April 2019. In parallel, the government has agreed commercial terms with the Medical Protection Society covering claims for historic NHS clinical negligence incidents of their GP members occurring at any time before 1 April 2019.

We are currently assessing the implications of this scheme on the public sector finances and will announce our findings at the earliest opportunity.

EU withdrawal agreement

Although the Office for Budget Responsibility (OBR) discusses the EU settlement in their Economic and Fiscal Outlook – March 2019 report, the details in the report are still subject to negotiation.

There is insufficient certainty at this stage for us to complete a formal assessment of impact on the UK public sector finances.

On 28 January 2019, National Statistician John Pullinger released a statement outlining our legislative preparations for a possible no-deal EU exit.

East Coast Mainline

On 16 May 2018, the government announced that from 24 June 2018, London North Eastern Railway (LNER) will take over the running of East Coast Mainline services. On 31 August 2018, we announced that LNER would be classified to the public non-financial corporations sub-sector, effective from 14 February 2018. We are currently investigating the implications of this decision and our conclusions will be announced in due course.

Carillion insolvency

Following Carillion Plc declaring insolvency on 15 January 2018, the UK government announced that it would provide the necessary funding required by the Official Receiver, to ensure continuity of public services through an orderly liquidation. The Official Receiver has been appointed by the court as liquidator, along with partners at PwC that have been appointed Special Managers. The defined benefit pension schemes of former Carillion employees are currently being assessed by the Pension Protection Fund (PPF) prior to any transition into the PPF scheme.

We are currently investigating the various impacts of the liquidation of Carillion on the public sector finances, including in relation to the public-private partnership projects in which Carillion was involved and the additional funding that the government has provided to maintain public services. We will announce our findings in due course.

Prior to liquidation, Carillion held approximately 450 contracts with government, representing 38% of Carillion’s 2016 reported revenue.

The sale of railway arches

On 11 September 2018, Network Rail announced they had agreed terms for the sale of their Commercial Estate business in England and Wales. On 4 February 2019, the National Audit Office confirmed that Network Rail had completed a £1.46 billion sale of its commercial property portfolio consisting of approximately 5,200 properties across England and Wales, mainly railway arches.

Public sector net debt at the end of February 2019 and the central government net cash requirement in February 2019 were each reduced by an amount equivalent to the cash received by central government from the sale.

We are currently investigating the nature of the transaction to ensure that the effects will be fully reflected in the public sector finances. It has yet to be determined whether public sector net borrowing is affected and therefore it remains unchanged.