Money (10)

The government looks set to miss George Osborne's target for deficit reduction for this financial year, following the publication of the latest figures.

The Office for National Statistics (ONS) said government borrowing fell less than expected in February at £7.1 billion.

It means that in the the 11 months of the financial year so far, the government has borrowed £70.7bn. The Chancellor's target for the 2015/16 financial year is £72.2bn.

The news comes on a bad day for Mr Osborne, who is expected to face scrutiny in the House of Commons over his Budget, delivered last week. Some Conservative backbenchers have criticised the plans to cut £1.5bn from disability benefits, while giving tax breaks to richer members of society, which resulted in the resignation of work and pensions secretary Iain Duncan-Smith.

Ross Campbell, ICAEW Director for Public Sector Policy, said: “While progress has been made to reduce public sector borrowing, public debt has increased and is precariously high. In the wake of a Budget announcement that revealed an increase in borrowing figures by £16 billion with backtracks on savings leaving a fiscal hole in the Budget, sound management of the public finances is essential. Against a total of £756bn spent on public services, infrastructure and financial obligations by the close of 2016, achieving a £10bn surplus by 2020 can only be achieved with a government operating as a modern finance ministry. The fact that this target remains challenging highlights the need for robust systems to help the Government shape its vision for long-term sustainable finances.”