GOVERNMENT debt will be officially listed as totalling trillions rather than billions of pounds by the Treasury this week.
Future liabilities from public sector pensions and projects agreed under private finance initiatives (PFI) will be included in the UK’s debt figures, released by the department.
The government has been under pressure to produce a comprehensive set of accounts that reveal future liabilities, including unfunded commitments on pensions. Last year the Institute for Economic Affairs (IEA) claimed that public sector liabilities totalled £1.2 trillion while state pension liabilities would equal an eye-watering £2.7 trillion – pushing government debts to the equivalent of 333 per cent of GDP.
Government debts excluding these future liabilities was measured at £920.9bn in May, equivalent to 60.6 per cent of the country’s GDP.
Publishing the figures will increase transparency and help improve management of the public finances, the government hopes.
The Treasury will publish an unaudited summary of finances for the fiscal year 2009-10 on Wednesday, designed to coincide with a report on the sustainability of the UK’s public accounts from the Office for Budget Responsibility – the government’s fiscal watchdog, launched last year.
The Treasury will publish an audited account of the last fiscal year later in the year.
“This is long overdue,” Ruth Porter of the IEA told City A.M., “but publishing proper debt figures is only the first step. The government must announce further savings in government spending if future generations aren’t to be left paying off our soaring debt.”