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Government spending in the United Kingdom

{{Short description|none}}

{{Use dmy dates|date=June 2024}}

{{Use British English|date=June 2024}}

{{Infobox government budget

|year=2023–24

|title=UK government spending

|date_submitted=

|submitter=

|presented=15 March 2023

|passed=11 July 2023

|party=

|Total_Revenue=£1,058 billion

|Total_Expenditures=£1,189 billion

|spending=

|deficit=£131 billion

|debt=

|gdp=£2,650 billion

|url=https://www.gov.uk/government/topical-events/spring-budget-2023

|previous_budget=

|previous_year=

|next_budget=

|next_year=}}

Government spending in the United Kingdom, also referred to as public spending, is the total spent by Central Government departments and certain other bodies as authorised by Parliament through the Estimates process.{{Cite web |date=2023-05-18 |title=HMT Main Estimates |url=https://www.gov.uk/government/collections/hmt-main-estimates |access-date=2023-10-19 |website=GOV.UK |language=en}} It includes net spending by the three devolved governments: the Scottish Government, the Welsh Government and the Northern Ireland Executive.

For the financial year 2023–24, total government spending is expected to be £1,189 billion.

The UK government has spent more than it has raised in taxation since financial year 2001–02,{{Cite web |date=2023-06-08 |title=The budget deficit: a short guide |url=https://commonslibrary.parliament.uk/research-briefings/sn06167/ |access-date=2023-10-19 |website=UK Parliament}} creating a budget deficit and leading to growing debt interest payments.

Average government spending per person is higher in Scotland, Wales and Northern Ireland than it is in England. In financial year 2021–22, spending per head in England was £15.2k, whereas in Scotland it was £17.7k, in Wales it was £16.9k and in Northern Ireland it was £17.5k.{{Cite web |title=Country and regional public sector finances, UK - Office for National Statistics |url=https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/articles/countryandregionalpublicsectorfinances/financialyearending2022 |access-date=2023-10-19 |website=www.ons.gov.uk}}

Components of government spending

File:UK Government spending for 2023-24.pngThe most significant area of government spending is welfare (£341 billion in financial year 2023-24), with the largest single element of this being for the State Pension, which totals £124 billion. Other kinds of welfare payment such as Universal Credit sum to £83 billion, while £35 billion is spent on disability benefits.{{Cite web |title=A brief guide to the public finances [2023] |url=https://obr.uk/docs/dlm_uploads/BriefGuide-M23.pdf |access-date=2024-08-03 |website=Office for Budget Responsibility |language=en-GB}}{{Cite web |title=A brief guide to the public finances |url=https://obr.uk/forecasts-in-depth/brief-guides-and-explainers/public-finances/ |access-date=2023-10-19 |website=Office for Budget Responsibility |language=en-GB}}

Elsewhere, significant public spending is dedicated to health as a result of the taxpayer-funded National Health Service. In financial year 2023–24, £177 billion is budgeted for NHS England.{{Cite web |title=DHSC Estimates memorandum 2023-24 |url=https://committees.parliament.uk/publications/40238/documents/196454/default/ |access-date=2023-10-19 |website=UK Parliament |postscript=. The sum of RDEL, CDEL and AME funding for the NHS in this document.}}{{Failed verification|date=August 2024|reason=the only £177 billion figure in the source is DHSC Spending Review settlement for 2024–25}}

Around half of the funding Local Authorities receive in England is through central government spending,{{Cite web |last=admin-account |date=2021-07-23 |title=Local Government Explained Part 3: How are councils funded? |url=https://www.newlocal.org.uk/articles/council-finance-explained/ |access-date=2023-10-19 |website=New Local |language=en-US}} principally from the Department for Levelling Up, Housing and Communities. This comes in the form of both a core grant to councils to cover operating costs, known as the Local Government Finance Settlement,{{Cite web |date=2023-02-06 |title=Final local government finance settlement: England, 2023 to 2024 |url=https://www.gov.uk/government/collections/final-local-government-finance-settlement-england-2023-to-2024 |access-date=2023-10-19 |website=GOV.UK |language=en}} and grants for specific initiatives such as the Levelling Up Fund.

Debt interest has grown as a proportion of government spending in the last few years as a result of rising interest rates, and increased debt due to primarily to the cost of the Covid pandemic.{{Cite news |date=2023-10-04 |title=Cost of national debt hits 20-year high |language=en-GB |work=BBC News |url=https://www.bbc.com/news/technology-67002195 |access-date=2023-10-19}} In financial year 2018–19, debt interest was £43 billion - around 5% of total government spending{{Cite web |title=Budget 2018 |url=https://www.gov.uk/government/publications/budget-2018-documents/budget-2018 |access-date=2023-10-19 |website=GOV.UK |language=en}} compared to around 10% in 2023–24.

HM Treasury controls the overall budget for administration{{Cite web |author-link=HM Treasury |title=Finance glossary |url=https://www.parliament.uk/globalassets/documents/commons/Scrutiny/finance-glossary-0717.pdf |access-date=2023-10-19 |at=Administration budget definition at the bottom of first page.}} in central government, which largely comprises staff costs. In 2023–24, this totalled £14 billion.

Capital spending

Central government spending can be broken down into capital and revenue (also known in government as 'resource') spending.{{Cite web |title=How to understand public sector spending |url=https://www.gov.uk/government/publications/how-to-understand-public-sector-spending/how-to-understand-public-sector-spending |access-date=2023-10-19 |website=GOV.UK |language=en}} Capital is often scrutinised as a measure of government investment in public services, such as on buildings, equipment and IT.

Government capital spending in 2023-24 totals £134 billion, with the biggest spending departments being the Department for Transport, the Ministry of Defence and the Department for Science, Innovation and Technology, which together comprise around half of all capital spending.{{Cite web |title=Main Supply Estimates 2023 to 24 |url=https://www.gov.uk/government/publications/main-supply-estimates-2023-to-24 |access-date=2023-10-19 |website=GOV.UK |language=en}}

Some of the largest capital projects being run by central government at the moment include HS2 and the Dreadnought programme.{{Cite web |title=Infrastructure and Projects Authority Annual Report 2022-23 |url=https://www.gov.uk/government/publications/infrastructure-and-projects-authority-annual-report-2022-23 |access-date=2023-10-19 |website=GOV.UK |language=en}}

Recent history

Government spending has grown significantly since the COVID-19 pandemic. The table below shows total government spending over the previous five financial years and the plans for the subsequent two years, which form the remainder of this Spending Review period.{{Cite web |title=Public Expenditure Statistical Analyses 2023 |url=https://www.gov.uk/government/statistics/public-expenditure-statistical-analyses-2023 |access-date=2023-10-19 |website=GOV.UK |language=en}}

class="wikitable"

! rowspan="2" |£billion

! colspan="6" |Outturn

!Plans

2018–19

!2019–20

!2020–21

!2021–22

!2022–23

!2023–24

!2024–25

Public sector gross investment

|98

|95

|126

|104

|113

|131

|136

Public sector current expenditure

|761

|793

|981

|938

|1,042

|1,097

|1,140

Total managed expenditure

|858

|889

|1,107

|1,041

|1,155

|1228

|1,276

Local government spending

{{further|Local government in the United Kingdom}}Local government spending is the responsibility of local authorities, under the supervision of the respective national governments:

See also

;By nation

International

References

{{Reflist}}

{{United Kingdom budget}}

Category:British economic policy