[ 2015-03-21 ]

ONS error costs Osborne £5.5bn
George Osborne was left embarrassed today after
official figures showed the government was £5.5
billion deeper in debt than it thought.
The Office for National Statistics (ONS) announced
it had made an error because of “erroneous
double counting” and that it had been obliged to
revise upwards total public sector net debt by
£5.5 billion from October 2014.
The mistake was made because the ONS had twice
counted the same deposits at UK Asset Resolution,
the state-owned body that owns assets from the
nationalised parts of Bradford and Bingley and
Northern Rock.
Total public sector net debt was in fact £1,468.5
billion at the end of February, equivalent to 79.6
per cent of national income.
The error comes two days after the chancellor was
able to boast that debt as a percentage of
national income would start to come down from this
year. The revision - equivalent to more than a
penny on income tax - is not thought to be enough
to alter those sums.
The discovery was made as a result of quality
assurance work by the ONS and the Treasury.
A spokesperson for the ONS said: “Quality
assurance processes discovered that ONS had been
receiving overlapping data from both Bank of
England and UK Asset Resolution Ltd for a period
from October 2014. Correcting this has resulted in
a £5.5 billion addition to public sector net
debt. Deficit and net cash requirement figures are
not affected in any way.”
The mistake overshadowed promising figures for the
public finances in February, with new net
borrowing in February coming in at £6.9 billion,
slightly below market expectations and well down
on the £10.4 billion recorded in February 2014.
It was the smallest February deficit for seven
years, according to Samuel Tombs of Capital
Economics. “This continues to run of good fiscal
numbers seen in recent months,” he said.
“With one month of this fiscal year still to go,
borrowing looks set to come in at about £89
billion, nearly £10 billion lower than last year
and a touch below the Office for Budget
Responsibility’s forecast of £90.2 billion in
the budget.”
The ONS has made a number of errors in the last
two years, including miscalculating UK exports to
the US by more than £40 billion over four years.
It had no immediate comment today beyond its
official statement.

Source - The Times(UK)

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