Chancellor Philip Hammond has missed his full-year borrowing target despite the deficit reaching a 17-year low.
Public sector net borrowing, excluding state-owned banks, fell by £17.2 billion to £24.7 billion for the year to March, the Office for National Statistics (ONS) said.
But borrowing was still £1.9 billion higher than the £22.8 billion forecast by the Office for Budget Responsibility (OBR) last month.
The deficit fell to its lowest in 17 years, at 1.2% of gross domestic product (GDP), down from 9.9% at the height of the financial crisis a decade ago, the ONS added.
In March alone, borrowing jumped to £1.7 billion, an increase of £900 million year-on-year.
Economists had predicted net borrowing of £400 million for the month.
Borrowing rose in March after higher-than-expected government spending, largely related to the purchase of goods and services.
The budget deficit was aided by buoyant tax revenue growth.
Central government receipts rose 5% year-on-year in March following increases in income and capital gains tax receipts, up 6.4%, and VAT receipts, up 3.2%.
Central government spending rose by 3%, while overall GDP growth slowed over the year amid Brexit-related uncertainty.
Britain’s total net debt rose to £1.8 trillion, or 83.1% of GDP, an increase of £22.1 billion on the previous year, according to the ONS data.
John Hawksworth, PwC chief economist, said: “After a run of relatively good public finance data, today’s estimates were a little disappointing.
“The bigger picture is one of significant improvement in the public finances.
“While there are many political and economic uncertainties ahead, the fact that the public finances are in their best shape for 17 years should give the Chancellor some room for manoeuvre in his Autumn Budget and Spending Review.”
The Chancellor promised in his Spring Statement to spend £26 billion on public services and investment if MPs vote to leave the EU with a deal.
But the outlook for fiscal policy has been “clouded” by the extension of Brexit until October 31, according to EY Item Club chief economic adviser Howard Archer.
He said: “The Chancellor has repeatedly warned that a no-deal Brexit would inflict a significant short to medium-term hit to the economy – and he clearly wants to keep his fiscal options open should this occur.
“We suspect that if there was ultimately a no-deal Brexit, there would be some loosening of fiscal policy to support the economy.”