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

Source: ONS Public Sector Finances MF6U – October 2014

Government spending as % of GDP

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

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

• During 2013/14, government revenue = £620.4 billion.
• Leaving net borrowing of £102.4 billion. More on Government net borrowing here

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.

 

UK government spending as % of GDP since 1900

• 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 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

What does the Government spend its money on?

See posts on:

• Social security
• Welfare benefits

Further reading – What does the government spend its money on

Related issues Government Taxes

Government taxes as % of 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

Public sector debt – nominal – more at UK National debt

Source of Data on government spending

• HM Treasury Public Finance database

Related Posts

• Welfare spending in UK
• Government spending under Labour
• UK National debt
• Do we really have austerity?

 

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