Public Expenditure

HM Treasury written question – answered on 10th July 2015.

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Photo of Paul Monaghan Paul Monaghan Scottish National Party, Caithness, Sutherland and Easter Ross

To ask Mr Chancellor of the Exchequer, pursuant to the Answer of 1 July 2015 to Question 4358, what mechanisms other than the issuance of gilts are used to finance Government borrowing; and what the gross value is of borrowing through such mechanisms.

Photo of Harriett Baldwin Harriett Baldwin The Economic Secretary to the Treasury

The majority of central government borrowing is financed through gilt issuance by the Debt Management Office (£126.4 billion in 2014-15).

Other sources of central government financing in 2014-15 were:

  • National Savings and Investments – net financing of £18.2 billion

  • Treasury bills – net financing of £8.5 billion

  • Renminbi bond – net financing of £0.3 billion

  • Sukuk – net financing of £0.2 billion

    Total financing through these sources in 2014-15 totalled £27.2 billion.

    Local authorities have flexibility to determine their sources of borrowing within the prudential code borrowing regime. Local authorities undertake the majority of their borrowing via the Public Works Loan Board (PWLB), a statutory body operating within the Debt Management Office. The PWLB’s function is to lend money from the National Loans Fund to local authorities and to collect repayments.

    From April 2015, the Scottish government has the power to borrow up to a total of £2.2 billion for capital investment by way of bond issuance as well as via the National Loans Fund and commercial loans. The coalition government announced in February 2015 that the Welsh government’s means of borrowing for capital investment from April 2018, up to a total of £500 million, will also be extended to include bond issuance.

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