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Government spending in the United Kingdom

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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.[1] It includes net spending by the three devolved governments: the Scottish Government, the Welsh Government and the Northern Ireland Executive.

2023-24 (2023-24) UK government spending
Presented15 March 2023
Passed11 July 2023
Total revenue£1,058 billion
Total expenditures£1,189 billion
Deficit£131 billion
GDP£2,650 billion
Websitehttps://www.gov.uk/government/topical-events/spring-budget-2023

For the financial year 2023-24, total government spending is expected to be £1,189 billion.[2]

The UK government has spent more than it has raised in taxation since financial year 2001-02,[3] 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.[4]

Components of government spending

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Pie chart of UK government spending, 2023-24.[2]

The most significant area of government spending is welfare (£341 billion in financial year 2023-24),[2] 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.[5][6]

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.[7][failed verification]

Around half of the funding Local Authorities receive in England is through central government spending,[8] 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,[9] 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.[10] In financial year 2018-19, debt interest was £43 billion - around 5% of total government spending[11] compared to around 10% in 2023-24.

HM Treasury controls the overall budget for administration[12] in central government, which largely comprises staff costs. In 2023-24, this totalled £14 billion.[13]

Capital spending

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Central government spending can be broken down into capital and revenue (also known in government as 'resource') spending.[14] 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.[15]

Some of the largest capital projects being run by central government at the moment include HS2 and the Dreadnought programme.[16]

Recent history

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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.[13]

£billion Outturn Plans
2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Public sector gross investment 98 95 126 104 113 134 133
Public sector current expenditure 761 793 981 938 1,042 1,055 1,056
Total managed expenditure 858 889 1,107 1,041 1,155 1,189 1,189

Local government spending

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Further information: 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

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By nation

International

References

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  1. ^ "HMT Main Estimates". GOV.UK. 18 May 2023. Retrieved 19 October 2023.
  2. ^ a b c "SPRING BUDGET 2023" (PDF). UK Government. 15 March 2023. p. 114. Retrieved 19 October 2023.
  3. ^ "The budget deficit: a short guide". UK Parliament. 8 June 2023. Retrieved 19 October 2023.
  4. ^ "Country and regional public sector finances, UK - Office for National Statistics". www.ons.gov.uk. Retrieved 19 October 2023.
  5. ^ "A brief guide to the public finances [2023]" (PDF). Office for Budget Responsibility. Retrieved 3 August 2024.
  6. ^ "A brief guide to the public finances". Office for Budget Responsibility. Retrieved 19 October 2023.
  7. ^ "DHSC Estimates memorandum 2023-24". UK Parliament. Retrieved 19 October 2023. The sum of RDEL, CDEL and AME funding for the NHS in this document.{{cite web}}: CS1 maint: postscript (link)
  8. ^ admin-account (23 July 2021). "Local Government Explained Part 3: How are councils funded?". New Local. Retrieved 19 October 2023.
  9. ^ "Final local government finance settlement: England, 2023 to 2024". GOV.UK. 6 February 2023. Retrieved 19 October 2023.
  10. ^ "Cost of national debt hits 20-year high". BBC News. 4 October 2023. Retrieved 19 October 2023.
  11. ^ "Budget 2018". GOV.UK. Retrieved 19 October 2023.
  12. ^ "Finance glossary" (PDF). Administration budget definition at the bottom of first page. Retrieved 19 October 2023.
  13. ^ a b "Public Expenditure Statistical Analyses 2023". GOV.UK. Retrieved 19 October 2023.
  14. ^ "How to understand public sector spending". GOV.UK. Retrieved 19 October 2023.
  15. ^ "Main Supply Estimates 2023 to 24". GOV.UK. Retrieved 19 October 2023.
  16. ^ "Infrastructure and Projects Authority Annual Report 2022-23". GOV.UK. Retrieved 19 October 2023.
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