by Atlanta Neudorf, operations assistant
Earlier this week the Office for National Statistics (ONS) released its public sector finances report for March 2025, closing out the figures for the financial year 2024-2025.
Unsurprisingly, the report makes for grim reading, and confirms that fiscal recklessness is a permanent feature of this government’s policy. It adds insult to the injury of the brutal tax raids announced in the Autumn Budget, with public sector spending far outstripping the government’s tax receipts. Indeed, the Treasury’s books are about as far from balanced as they can possibly be.
So much for the pledges of a ‘prudent approach’ to fiscal rules and the delivery of a stable, growing economy that were trotted out before the last election!
Perhaps the most shocking revelation from the ONS data is the confirmation of government borrowing levels: with the addition of last month’s £16.4 billion, the Treasury has now reached a jaw-dropping net borrowing total of £151.9 billion for the last financial year, a figure which far overshoots the £137.3 billion estimate initially provided by the Office for Budget Responsibility (OBR). Additionally, not only did public sector borrowing in 2024-2025 exceed the previous financial year’s total by £20.7 billion, it also marks the third highest net borrowing figure since records began in 1947, coming only behind the first year of the coronavirus pandemic (2020-2021) and the after effects of the 2008 financial crisis (2009-2010).
At the same time, tax receipts have surged even before the chancellor’s jobs tax grab. Despite central government receipts increasing by a stupendous £37.7 billion, including a £24.8 billion increase from income tax alone, the current budget deficit is estimated at £74.6 billion for this year. Compared with the last financial year’s deficit,which was £12.6 billion less, and the OBR forecast for this year (£60.7 billion), this is a colossal overespend that makes a mockery of previous pledges to fiscal responsibility.
And what does all this spending add to? The debt, of course. So while the government pronounces the benefits of all their expenditure, remember, you’re paying for it in the long run with net debt at levels last seen in the early 1960s and debt interest costing £100 billion a year.
But none of this is surprising given the government has blown through a whopping extra £56.8 billion in public sector spending this year. This money has to a great extent disappeared into the black holes of bloated public sector budgets, countless unaccountable quangos, and headline-chasing pet projects like net zero.
What have taxpayers received in return for their sacrifices? A stagnating economy, as demonstrated by the IMF’s slashing of the UK’s economic growth forecast by 0.5% earlier this week, and eroded business confidence in the wake of Autumn Budget tax hikes. Indeed, the Global Chief Business Economist of the stock market index S&P suggested that business confidence levels in Britain have sunk to ‘one of the lowest levels yet recorded’ in the corporation’s latest Flash UK PMI survey.
And you can see why.
The possibility of future tax hikes and more borrowing seem increasingly likely, despite the Treasury’s hasty - and flimsy - promise to “tear out waste”. This government has shown itself to be entirely incapable of doing so, as the ONS data clearly shows. With public sector spending skyrocketing to almost £1.3 trillion - a figure massively exceeding OBR forecasts - it’s clear that the government has completely lost control of the nation’s finances, pouring ever-increasing amounts of taxpayers’ money into an inefficient bureaucracy while delivering little in return for the mounting burden it has placed on ordinary Brits.
If this is what fiscal prudence looks like, then Britain is in even deeper trouble than we thought.