UK Government spending – real and as % of GDP

In 2013/14 the UK government is forecast to spend a total of £ 722.9 billion – nearly double 2000/01 spending of £359.6 billion

UK-government-spending

Source: ONS Public Sector Finances MF6U – October 2014

Government spending as % of GDP

g-spending-percent-gpd-96-14

Updated Forecasts of Government spending from Autumn Statement of Dec. 2014

government-spending-percent-gdp-obr-14

Source: OBR, Dec 2014

Note 2013/14, government spending as a % of GDP is approx 41.2% of GDP. This is forecast to fall to 25% of GDP by 2018-19. This will require several years of great government spending restraint and high economic growth.

Government Spending and borrowing

Of this government spending:

  • Current spending = £671.5 bn
  • Capital spending = £51.3 bn

Background to government spending

In 2000-01, several years of government spending restraint combined with rising economic growth, saw government spending shrink to under 35% of GDP. Between 2001 and 2007-08, spending rose to over 40% of GDP due to sustained increases in spending on health, education and welfare spending.

  • Between 2008-09 and 2009-10, the UK saw a large drop in real GDP of 6%, but due to automatic stabilisers government spending increased (e.g. higher unemployment benefits). This caused government spending as % of GDP to rise to 47%.
  • Government spending as % of GDP is forecast to fall closer to 40% of GDP by 2016-17 (if growth targets are met)

Historical government spending

Government spending in 1970s and 1980s. This graph shows real spending adjusted for inflation.

government-spending-real-1967-2012

 

UK government spending as % of GDP since 1900
government-spending

  • Between the late 1940s and 2000, government spending as a % of GDP has stayed around 40%.
  • But, actual real government spending triples from £100bn to £300bn

government spending real termsGovernment spending in real terms

(at 1995 prices means the actual spending is adjusted for inflation since 1995.

This is due to an increase in GDP. A similar tripling of real GDP from £4,000 per capita to over £12,000

real gdp

What does the Government spend its money on?

See posts on:

government-spending-actual-billion

Further reading – What does the government spend its money on

Related issues Government Taxes

net-taxes-ni

Government taxes as % of GDP

taxes-percent-gdp

It is worth noting that net public sector receipts in 2011-12 were 36.9% of GDP – This is higher than total tax revenue of 35%. This is because the government can receive income from the proceeds of privatisation or selling mobile phone licenses.

Public sector debt

net-debt--billion-nominal

Public sector debt – nominal – more at UK National debt

Source of Data on government spending

Related Posts

 

Data Government Spending £ billion at 2010/11 Prices

1967-68 238.0
1968-69 240.8
1969-70 240.8
1970-71 249.1
1971-72 255.4
1972-73 263.9
1973-74 291.9
1974-75 319.9
1975-76 325.0
1976-77 326.4
1977-78 313.6
1978-79 319.8
1979-80 326.4
1980-81 331.8
1981-82 338.1
1982-83 348.7
1983-84 361.5
1984-85 367.8
1985-86 363.7
1986-87 366.5
1987-88 369.1
1988-89 360.5
1989-90 372.3
1990-91 376.1
1991-92 394.5
1992-93 416.5
1993-94 425.7
1994-95 438.5
1995-96 444.2
1996-97 437.2
1997-98 437.0
1998-99 439.9
1999-00 447.9
2000-01 443.7
2001-02 496.1
2002-03 523.5
2003-04 553.9
2004-05 582.1
2005-06 605.2
2006-07 619.1
2007-08 640.8
2008-09 674.2
2009-10 707.0
2010-11 708.9
2011-12 693.6

Government spending as % of GDP

1967-68 44.6
1968-69 43.4
1969-70 42.5
1970-71 42.7
1971-72 42.6
1972-73 41.9
1973-74 44.4
1974-75 48.6
1975-76 49.7
1976-77 48.6
1977-78 45.6
1978-79 45.1
1979-80 44.6
1980-81 47.0
1981-82 47.7
1982-83 48.1
1983-84 47.8
1984-85 47.5
1985-86 45.0
1986-87 43.6
1987-88 41.6
1988-89 38.9
1989-90 39.2
1990-91 39.4
1991-92 41.9
1992-93 43.7
1993-94 43.0
1994-95 42.5
1995-96 41.8
1996-97 39.9
1997-98 38.2
1998-99 37.2
1999-00 36.3
2000-01 34.5
2001-02 37.7
2002-03 38.5
2003-04 39.3
2004-05 40.5
2005-06 41.2
2006-07 40.9
2007-08 41.0
2008-09 44.5
2009-10 47.7
2010-11 46.8
2011-12 45.4
2012-13 43.1
2013-14 44.4
2014-15e 43.3
2015-16 42.2
2016-17e 40.9
2017-18 39.5

 

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4 Responses to UK Government spending – real and as % of GDP

  1. Jo May 22, 2012 at 11:59 am #

    Just a shame that ‘GDP’ as released, can no longer be relied upon to be representative of reality.

    Real shame.

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