Government borrowing below forecast

Government borrowing fell to £7.4bn in March, figures show, taking the total for the financial year to £87.3bn.

That is below the £90.2bn figure estimated in March by the independent Office for Budget Responsibility, and £11.1bn lower than last year's total.

March's borrowing figure was down £400m from a year earlier, the Office for National Statistics figures showed.

Finances in the month were helped by increased revenues from income tax and national insurance.

The ONS said taxpayers paid a record £15.5bn in income tax last month.

In the aftermath of the financial crisis, borrowing peaked at £153bn in 2009-10, the year before the Coalition government took power.

As a percentage of gross domestic product (GDP), the deficit has more than halved since then from 10% to 4.8%.

Total Public Sector Net Debt (PSND), which excludes help for state-controlled banks, stood at £1.484 trillion in March, equivalent to 80.4% of GDP.

The figure is £500bn higher than it was the year before the Coalition government took charge.

The independent Institute for Fiscal Studies has completed an analysis of the main parties' plans for public finances.

It says: "None of these parties has provided anything like full details of their fiscal plans for each year of the coming parliament, leaving the electorate somewhat in the dark as to both the scale and composition of likely spending cuts and tax increases."

Challenge

Vicky Redwood, chief UK economist at Capital Economics, said: "March's public finance figures bring some good news for the coalition parties in the run-up to the general election."

But Sumita Shah from the Institute of Chartered Accounts in England and Wales (ICAEW), said the figures meant the next government would still face a major challenge: "Whoever forms the next government will have to face up to the stark reality of the UK's fiscal position."

The Institute of Directors (IoD) said none of the contenders for the next government had been clear about how they would deal with the issue.

"All the major political parties have talked about the importance of fiscal responsibility. However, they are reluctant to give even the broadest of details about how they are proposing to eliminate the deficit."

The IoD called for a "mature debate" on what constitutes a sustainable level of public finances.