What to expect from record year of privatisations

It was always going to be a big year for privatisations, with assets such as bits of Lloyds, RBS and Royal Mail being sold.

But analysis of House of Commons Library figures last week by the Press Association suggests it could be the biggest 12-month period we've had.

In the financial year 2015-16, the Office for Budget Responsibility (OBR) reckons the government could raise about £32bn from selling public assets, the biggest chunk of which would be about £13bn from the sale of the government's stake in Lloyds Banking Group, followed closely by about £12bn from the sale of UK Asset Resolution, which owns the remaining bits of Northern Rock and Bradford and Bingley.

Other big price-tag sales include more of the government's stake in RBS, Royal Mail and the Student Loan book.

PA adjusted previous years of privatisations to current money and found that 2015-16 would be the biggest year for privatisations by far.

The previous high-water marks had been 1987 when chunks of BA, BAA, BP and Rolls-Royce raised about £22.7bn in today's money, and 1991 when the sale of parts of BT, National Power, PowerGen and regional electricity companies in Scotland raised about £22.6bn.

Now, these figures are not perfect - for starters we are comparing a financial year, 2015-16, with previous calendar years.

Also, IFS director Paul Johnson's recent review of inflation statistics warned against the use of RPI for anything whatsoever as a result of its statistical flaws. Even so, the difference between 2015-16 and any year since the start of the Thatcher era in 1979 is startling.

The OBR suggests that we won't be seeing another year like it any time soon, predicting total proceeds of £32bn from the rest of the remaining four years of the parliament put together.

But that figure is only made up of continuing sales of the RBS stake and the Student Loans book.

The government has started selling off shares in RBS but still holds a 73% stake in the bank

The Conservatives' manifesto this year was very clear that the party planned to continue selling stakes in bailed-out banks and building societies and also that it would continue to sell unneeded government property.

But there was no mention of any of the other rumoured sales such as the Royal Mint or the Met Office.

The sale of the government's stake in Eurostar has been announced, but there are still difficulties in the sale of the stake in Urenco, which is a supplier of nuclear fuel.

It's important to remember what the sale of public assets does for the public finances. It does not reduce the deficit, which is the amount the government needs to borrow in a year.

It does reduce the country's overall debt, which also reduces the amount of interest that has to be paid each year.

On the other hand, while the government gets cash upfront when it privatises something, it loses its share of any profits that might have been made in the future.