Accredited official statistics

Public spending statistics: July 2020

Published 17 July 2020

1. Introduction

This National Statistics release is intended to provide comprehensive information on public spending. Data are arranged thematically by section. Each section contains overview commentary on the statistics being released, statistical tables, and further background information. The key data being updated in this release are for the years 2015-16 to 2019-20. This release contains the first estimate of 2019-20 outturn. All data in this release are National Statistics and are on an outturn basis. Where major revisions to the data for past years have been made we refer to them in the text accompanying the tables. Further background detail is found in the accompanying background material published alongside this release.

HM Treasury Public Spending Statistics provide a range of information about public spending. Further detailed explanations are provided in the PSS guidance document. The release is classified as National Statistics and conforms to the rules and principles set out in the Code of Practice for Official Statistics overseen by the United Kingdom Statistics Authority.

1.1 Related releases from HM Treasury

• The PESA command paper is an annual release, containing plans data for the Spending Review period, alongside the data contained in this release.

• The quarterly public spending statistics releases update the key series found in this release.

• Changes to this release have been made in response to requests from the United Kingdom Statistics Authority and feedback received from users. We welcome further user feedback at [email protected]

1.2 What’s new

Due to significant pressures experienced by some departments responding to the COVID-19 pandemic, the administrative deadline for laying the 2019-20 departmental annual reports and accounts (ARAs) has been extended to 30th September 2020^{[footnote 1]}. As a result, the 2019-20 outturn published in PESA may be subject to data quality issues due to the inability of some departments, taking advantage of the extension, to align outturn data accurately to their ARAs. It is likely that some departments will revise their outturn data to align fully with the publication of their ARAs later in the year. The public spending statistics (PSS) release, published on a quarterly basis, will reflect any later revisions made by departments for their 2019-20 outturn.

2. Departmental budgets

The tables for departmental budgets in chapter 1 bring together information on public expenditure within the current budgeting and control framework. This comprises departmental budgets, including all control totals, as well as reconciling from the budgetary framework to the fiscal aggregates in the National Accounts.

DEL expenditure in real terms (billions)

Expenditure	2018-19	2019-20
Resource DEL	338.9	368.9
Depreciation	24.1	35.6
Capital DEL	63.8	70.4
Total DEL	378.6	403.7

2.1 Departmental expenditure limits (DEL)

• Total resource DEL was £368.9 billion in 2019-20, an increase of 8.9 per cent in real terms on the previous year.
• Total resource DEL (RDEL) excluding depreciation was £333.3 billion in 2019-20, an increase of 5.9 per cent in real terms on the previous year.
• Depreciation in resource DEL was £35.6 billion in 2019-20, an increase of 47.9 per cent in real terms on 2018-19.
• Total capital DEL was £70.4 billion in 2019-20, an increase of 10.3 per cent in real terms on the previous year.
• Total DEL in real terms increased by 6.6 per cent in 2019-20 from £378.6 billion in 2018-19 to £403.7 billion. The largest increases in DEL spending in real terms in 2019-20 were for Health and Social Care, which increased by £7.6 billion to £140.5 billion, and Transport which was up by £7.4 billion to £18.4 billion, although this largely reflected a change in treatment of Network Rail which had previously formed part of Transport AME.

2.2 Total Departmental Expenditure Limits, 2019-20 (£millions)

^{For the full table, including years from 2015-16 onward, please refer to Table 1.10 in the accompany Chapter 1 tables excel file.}

Departmental Group	Total DEL
Health and Social Care	140,453
Education	68,389
Home Office	12,290
Justice	8,357
Law Officers’ Departments	618
Defence	39,762
Single Intelligence Account	2,974
Foreign and Commonwealth Office	2,553
International Development	10,030
MHCLG - Housing and Communities	10,766
MHCLG - Local Government	8,572
Transport	18,409
Business, Energy and Industrial Strategy	13,735
Digital, Culture, Media and Sport	2,150
Environment, Food and Rural Affairs	2,783
International Trade	481
Work and Pensions	5,776
HM Revenue and Customs	4,318
HM Treasury	489
Cabinet Office	1,028
Scotland	20,977
Wales	14,179
Northern Ireland	12,702
Small and Independent Bodies	1,921

2.3 Annually Managed Expenditure (AME)

• Resource departmental AME increased by £125.9 billion to £375.2 billion in real terms in 2019-20. This is mainly reflects negative provisions in 2018-19 for the Nuclear Decommissioning Authority within the Department for Business, Energy and Industrial Strategy.
• Capital departmental AME increased by £10.4 billion to £23.3 billion in 2019-20.

Departmental AME expenditure in real terms (billions)

Expenditure	2018-19	2019-20
Resource departmental AME	249.3	375.2
Capital departmental AME	12.9	23.3
Total departmental AME	262.2	398.5

3. Economic analysis of budgets

The tables in chapter 2 of Public Spending Statistics present an analysis by economic category of the budgeting aggregates shown in chapter 1. A description of the economic categories referred to below can be found in the main chapter text of the Public Spending Statistics.

3.1 Resource DEL

• Total resource DEL was £368.9 billion in 2019-20, compared to £332.4 billion in 2018-19.
• Staff costs increased by 12.0 per cent in 2019-20 (to £129.4 billion) and gross current procurement rose by 6.9 per cent (to £120.8 billion). A breakdown of gross current procurement by individual departments is shown in table 2.2.
• Expenditure on grants to local government totalled £58.9 billion in 2019-20, an increase of 7.3 per cent on 2018-19. This partly reflects the bringing forward of £3.4 billion of grants from 2020-21 to 2019-20 in response to Covid-19. The financing of local government expenditure is examined in more detail in chapter 7.
• Spending on administration, composed mainly of pay and procurement, stood at £10.4 billion in 2019-20. This is a rise of 2.6 per cent from the previous year.

3.2 Resource AME

• Resource departmental AME increased by £130.7 billion to £375.2 billion in 2019-20. This is mainly a reflection of negative provisions for the Nuclear Decommissioning Authority within the Department for Business, Energy and Industrial Strategy in 2018-19.
• The majority of the spending within resource AME is made up of grants to persons and non-profit bodies, which is mainly social security benefits. Expenditure on this heading rose by 3.9 per cent to £213.5 billion in 2019-20 from £205.5 billion in the previous year.
• Depreciation fell to -£21.3 billion from -£8.7 billion in 2018-19. This is mainly due to changes in the fair value of financial assets held by HM Treasury in 2019-20.

3.3 Capital budgets

• Capital spending within budgets was £93.6 billion in 2019-20, an increase of 24.5 per cent on the previous year. The majority of capital spending occurred within DEL.
• Within capital budgets, gross capital procurement increased by £232 million and capital support for local government increased by £935 million in 2019-20. These are broken down by department in Tables 2.3 and 7.3 respectively.
• Net lending and investment to the private sector and abroad increased by £17.2 billion to £26.9 billion in 2019-20. This mainly reflects lower receipts received by HM Treasury in 2019-20.

3.4 Treatment of financial sector interventions in budgets

In the pre-Budget report of December 2009 the use in fiscal policy of new aggregates excluding the temporary effects of financial interventions was introduced. In these aggregates, banks that are classified to the public sector in the National Accounts (Northern Rock, Bradford & Bingley, Dunfermline, Lloyds Banking Group and Royal Bank of Scotland) are treated as if they are outside the public sector, reflecting the Government’s intention to return these banks or their assets to the private sector. Only Royal Bank of Scotland is still classified to the public sector. The financial sector interventions are treated as follows in Table 2.1:

Resource budget

• Income from sales of goods and services: £0.0 billion in 2015-16, -£0.1 billion in 2016-17 and -£0.0 billion in 2017-18, 2018-19 and 2019-20. This is mainly underwriting commission and guarantee fee income;
• Depreciation: There was a gain of £6.3 billion in 2015-16 and £23.1 billion in 2016-17. In 2017-18 there was an impairment of £0.4 billion, a gain of £14.0 billion in 2018-19 and a gain of £35.2 billion in 2019-20.
• Other: income of -£6.2 billion in 2015-16, -£1.7 billion in 2016-17, -£0.5 billion in 2017-18 and -£1.1 billion in 2018-19 and 2019-20. This is mainly interest paid to government and from the sale of shares.

Capital budget

• Net lending to the private sector: -£11.3 billion in 2015-16, -£3.5 billion in 2016-17, -£0.9 billion in 2017-18, -£2.5 billion in 2018-19 and -£1.6 billion in 2019-20. This is mainly lending to banks and the Financial Services Compensation Scheme and subsequent repayments, and income from the sale of shares in Lloyds Banking Group and the Royal Bank of Scotland.

These transactions score within the HM Treasury AME budget.

4. Trends in public spending

The tables in chapter 4 show trends in public spending on a longer run basis than other chapters in this release, in nominal, real (inflation-adjusted) and percentage of GDP terms.
Table 4.1 shows long run trends in Total Managed Expenditure (TME) and its Public Sector Current Expenditure (PSCE) and Public Sector Net Investment (PSNI) components back to 1977-78.
Tables 4.2 to 4.4 show total expenditure on services split by high level spending function (health, education, social protection, etc.) back to 1996-97.

4.1 Trends in TME, PSCE and PSNI (Table 4.1)

• During 2019-20, Total Managed Expenditure has increased in nominal terms by £29.7 billion (3.5 per cent), and also in real (inflation-adjusted) terms by £13.3 billion (1.5 per cent).
• Since 1977-78, real terms year-on-year decreases in TME have only occurred in 1985-86, 1988-89, 1996-97, 2011-12 to 2013-14 and 2018-19.
• TME as a percentage of GDP, which shows the size of the public sector relative to the size of the whole economy, was 39.8 per cent in 2019-20.

4.2 Trends in functional expenditure (Table 4.2 to 4.4)

• In real terms, spending in eight of the ten functions (excluding EU transactions) increased whilst spending in two functions fell during 2019-20.
• The largest real terms percentage increases were in housing and community amenities (17.8 per cent) and in economic affairs (5.6 per cent).
• The real terms decreases in spending were in general public services (-1.7 per cent) and in social protection (-1.7 per cent).
• Spending on health shows a nominal and real terms increase in 2019-20 (7.3 per cent in nominal terms, 5.3 per cent in real terms).
• For greater detail see Table 5.2, which shows a breakdown of public spending at the sub-functional level.

^{From 2011-12 onwards the ‘grant-equivalent element of student loans’ is no longer part of the TES framework and has therefore been removed from the Education function. Therefore figures are not directly comparable between 2010-11 and 2011-12. A full explanation of this decision can be found in PESA 2016 Annex E.}

5. Public sector spending by function, sub-function and economic category

The tables in chapter 5 of this release present analysis of total public sector expenditure on services split by function, sub-function and economic category. These presentations are more stable between years than presentations of data by government department on a budgeting basis (Chapters 1 and 2) because they are not affected by changes in the structure of Government over time.

5.1 Functional tables

• In nominal terms, spending in all ten functions (excluding EU transactions) increased in 2019-20.
• The largest increases in percentage terms were in housing and community amenities (20.0 per cent) and economic affairs (7.6 per cent).
• In percentage terms, the smallest increases in functional spend were in social protection (0.2 per cent) and general public services (0.2 per cent).
• Expenditure in both health and education increased in 2019-20 by 7.3 per cent and 4.9 per cent respectively.

5.2 Sub-functional tables

• The largest nominal spending increase by function in 2019-20 was in health, which rose by £11.2 billion to a total of £164.1 billion (an increase of 7.3 per cent). This was driven by medical services.
• Economic affairs saw the second largest increase in 2019-20 of £4.6 billion. This was largely driven by general economic, commercial and labour affairs with a total of £14.4 billion (an increase of 23.9 per cent), and transport with a total of £34.7 billion (an increase of 6.1 per cent).
• The largest percentage increase within transport was for local public transport with an increase of 39.4 per cent. Railway expenditure showed a small decrease of -2.5 per cent, due to a fall in Crossrail and London Underground expenditure.

6. Central government own expenditure

The tables in chapter 6 of Public Spending Statistics (PSS) present analyses of central government own expenditure. This is spending by government departments and other central government bodies on their own activities. Central government support for local government and capital support for public corporations is not included.

• Tables 6.1 to 6.3 show central government expenditure on a budgeting basis, consistent with the data shown in chapters 1 and 2.
• Tables 6.4 to 6.6 show expenditure on services, consistent with chapters 4 and 5.

6.1 Expenditure in budgets

• Central government own expenditure within DEL reached £313.7 billion in 2019-20, from £287.9 billion in 2018-19, a rise of 9.0 per cent.
• Expenditure within AME increased to £371.5 billion in 2019-20 from £223.0 billion in 2018-19. The increase in AME is largely due to large negative provisions in 2018-19 relating to the Nuclear Decommissioning Authority.

6.2 Expenditure on services

• Central government’s own current expenditure on services increased to £575.0 billion in 2019-20, from £554.0 billion the previous year. Capital expenditure on services increased from £53.8 billion in 2018-19 to £55.0 billion in 2019-20.
• As shown in Table 6.4, social protection and health together account for more than half of all of central government own expenditure. In 2019-20 spending on social protection increased to £221.3 billion compared to £219.6 billion in the previous year.
• Expenditure on central government debt interest fell from £48.8 billion in 2018-19 to £47.8 billion in 2019-20, a decrease of -2.0 per cent.
• Expenditure on current grants to persons and non-profit bodies, which is mainly composed of social benefits, rose to £229.9 billion in 2019-20 from £222.2 billion in 2018-19.

7. Local government financing and expenditure

Chapter 7 analyses central government support for local government within budgets (tables 7.1 to 7.3) and local government expenditure on services (tables 7.4 to 7.8). It deals primarily with Great Britain, as most equivalent spending in Northern Ireland is central government spending carried out by Northern Ireland departments.

7.1 Central government support for Local government

• Total central government support in DEL was £68.7 billion in 2019-20, up from £64.3 billion the year before. Support in AME fell from £52.0 billion to £47.8 billion over the same period.
• Capital support for local government rose from £10.2 billion in 2018-19 to £11.2 billion in 2019-20.

7.2 Local government expenditure on services

• Total local government current expenditure on services rose to £134.6 billion in 2019-20 compared to £131.5 billion in 2018-19. Over the same period total capital expenditure on services rose to £21.4 billion from £19.9 billion.
• As shown in table 7.4, local government current expenditure on education showed an increase from £40.3 billion in 2018-19 to £42.8 billion in 2019-20. Over the same period, spending on social protection dipped slightly to £53.6 billion from £54.9 billion.
• Local government capital expenditure rose in 2019-20 for all functions except for economic affairs (down £0.7 billion). The largest increases were seen in general public services (up £0.7 billion), recreation, culture and religion (up £0.5 billion) and housing and community amenities (up £0.5 billion) over the same period.
• A breakdown of local government expenditure by economic category is shown in table 7.8. Spending on pay, which amounted to £65.3 billion in 2019-20, accounts for just under 42 per cent of all spending on services by local government. The majority of this was within the education and public order and safety functions.

8. Public corporations

Chapter 8 analyses the impact of public corporations on departmental budgets and expenditure on services.
Tables 8.1 and 8.2 examine the impact on departmental budgets (DEL and departmental AME), breaking this down by economic category and departmental group.

Tables 8.3 to 8.5 analyse capital spending by public corporations. They break the expenditure down by individual public corporations as well as by function and economic category. Debt interest payments to the private sector, which is the only public corporation current spending that forms part of Total Managed Expenditure (TME), is also included.

• Public corporations’ capital expenditure was £11.9 billion in 2019-20, up from £11.5 billion the year before.
• Out of this total, expenditure by the Housing Revenue Account (for England, Scotland and Wales) was £4.7 billion, up from £3.7 billion the previous year.
• The other main contributors to public corporations’ capital expenditure were London Underground (as Transport Trading Limited) and Scottish Water.

8.1 What’s new

The Public Corporations’ component of Total Managed Expenditure in Chapter 8 now includes the separate Public Corporations, Bank of England and Public Sector Pensions sectors in the ONS’ Public Sector Finances release.

9. Public expenditure by country and additional information

9.1 Country and regional analysis in this release

The Country and Regional Analysis (CRA) is published each autumn. As a result there are no new substantive data on regional spending for this PSS release. However, the four headline tables of the CRA release published in November 2019 have been included in chapter 9.

Additionally we have included several other tables which complement the tables shown in this release. In particular we have included the GDP deflators used to calculate the real terms tables through the rest of this document. The CRA-based tables in this chapter are based on GDP deflators that were current at their time of original publication.

9.2 What’s new

No new tables or presentations of country and regional data are included in this chapter. However, the CRA data set published in November 2019 included four new tables (9.3a, 9.3b, 9.4a, and 9.4b) to provide a breakdown of capital and current expenditure in nominal, real terms and per head variations. Additionally, the use of more up to date aggregates from the provisional outturn data from the Ministry of Housing, Communities and Local Government (MHCLG) were introduced in the 2019 release.

10. Revisions in this release

All of the data contained in the Public Spending National Statistics are open for revision in every publication. The table below summarises the key revisions in this release.

Revisions to Budgets since July 2019 (£million)	2015-16	2016-17	2017-18	2018-19
Total Managed Expenditure	36,728	40,647	40,184	41,522
Total Departmental Expenditure Limits (DEL)	0	30	66	333
Departmental Annually Managed Expenditure (AME)	0	0	0	-3,683
Other AME	36,728	40,647	40,118	44,871
Total resource DEL	0	0	0	483
Total capital DEL	0	30	66	78

Figures for Total Managed Expenditure (TME) are taken from the ONS/HM Treasury Public Sector Finances release. The main revisions since last July’s publication are:

• Changes to TME and other AME in all years are due to updated ONS data. More information about these changes is available in the monthly ONS public sector finances (PSF) release.
• Changes to DEL and departmental AME expenditure reflecting departments revising data in line with their 2019-19 resource accounts.
• Local government expenditure has also been revised up.

11. GDP deflators and population numbers

11.1 GDP deflators

A number of the tables in this publication give figures in real terms. Real terms figures are the current price outturns or plans adjusted to a constant price level by excluding the effect of general inflation as measured by the GDP deflator at market prices. The real terms figures in this publication are given in 2019-20 prices. The GDP deflators used in this publication are those given below. The most up to date deflators can be found on the GOV.UK website.

Financial year	GDP deflator at market prices	Per cent change on previous year	Money GDP (£million)
1977-78	18.54998	13.75171	165811
1978-79	20.63885	11.2608	192055
1979-80	24.11645	16.84978	232269
1980-81	28.72903	19.12626	267153
1981-82	31.75423	10.53012	297610
1982-83	34.0916	7.360832	326887
1983-84	35.72008	4.776763	357612
1984-85	37.75138	5.686718	385624
1985-86	39.85355	5.568473	423581
1986-87	41.5051	4.144047	455385
1987-88	43.82773	5.595999	510953
1988-89	46.69068	6.532281	570118
1989-90	50.31028	7.752297	628384
1990-91	54.4473	8.223022	678505
1991-92	57.60963	5.808047	714825
1992-93	59.10995	2.604296	737105
1993-94	60.56185	2.45627	780778
1994-95	61.35523	1.310024	819004
1995-96	63.14918	2.923875	863504
1996-97	65.6502	3.960503	919295
1997-98	65.92813	0.423342	963769
1998-99	66.9549	1.557416	1008121
1999-00	67.2201	0.396088	1054782
2000-01	68.52913	1.947371	1107924
2001-02	69.38345	1.24666	1147395
2002-03	70.99418	2.321483	1211222
2003-04	72.4219	2.011045	1272293
2004-05	74.47133	2.829842	1336299
2005-06	76.28685	2.437885	1420214
2006-07	78.45313	2.839644	1493214
2007-08	80.53968	2.659614	1569164
2008-09	82.59495	2.551879	1573876
2009-10	83.9567	1.648709	1557283
2010-11	85.39463	1.712698	1622044
2011-12	86.69795	1.526238	1668699
2012-13	88.48365	2.05968	1725624
2013-14	90.19085	1.929396	1806329
2014-15	91.4503	1.396428	1871789
2015-16	92.2379	0.861233	1934600
2016-17	94.42178	2.367655	2019484
2017-18	96.05305	1.727647	2085654
2018-19	98.10155	2.132676	2166842
2019-20	100	1.935214	2216479

^{Data are based on the June 2020 National Accounts figures from ONS.}

Please note that these deflators do not apply to the real terms Country and Regional Analysis (CRA) tables 9.3 and 9.4 that were originally published in November 2019.

11.2 Population numbers by country and region

The population numbers used in Chapters 9 are derived from ONS’s mid-year estimates as used in the November 2019 Country and Regional Analysis release.

ONS’s most recent mid-year population estimates for the UK are directly available online.

12. Future development of Public Spending Statistics

We would be interested in readers’ views on how PESA might be developed to further increase its value to users. Please write to:

The Editor, PESA
Government Financial Reporting
Floor 2 Red Zone
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ

[email protected]

1. https://www.gov.uk/government/publications/financial-reporting-manual-addendum-2019-20/ ↩