Financing Requirement

B62 Table B23 presents projections of the net cash requirement by sector, giving details of the various financial transactions that do not affect net borrowing (the change in the sector's net financial indebtedness) but do affect its financing requirement.

B63 Table B24 updates the financing arithmetic for 2000-01 to allow for the latest forecast of the central government net cash requirement.

B64 As a consequence of the strong state of the public finances and the receipts from the spectrum licence auction, the Government has decided to increase the planned total of debt buy-backs to £5 billion (cash). However, given the commitment to maintain gilt issuance at £10 billion (cash), net short-term debt will be reduced in total by £12.4 billion compared to the positions announced in the revision to the DMO's remit on 12 June. This is being achieved by a further reduction of £1.6 billion in the Ways and Means advance planned for end March 2001 (to £13.4 billion) and a further reduction of £4.5 billion in the planned Treasury bill stock at end March 2001 (to £3.5 billion). The residual reduction in net central government debt, which will be invested in short-term assets, is £6.3 billion. Any under or overshooting of the CGNCR forecast for 2000-01 will be accommodated by changes in short-term asset holdings or the Treasury bill stock.

B65 At the time of the June revision to the DMO's remit, it was expected that the reduction in net short-term debt would be unwound over the next two financial years. However, in the light of the continued improvement in the public finances, it is now expected that the increase in assets will be unwound over the next three financial years.

B66 The DMO will be responsible for the management of the assets as an extension to their cash management responsibilities. The DMO will publish the range of instruments in which they may invest.

B67 Tables B26 and B27 set out historical data for the main fiscal aggregates.

Internal links

Pre-Budget Report 2000 index