UK Government spending – real and as % of GDP

In 2015/16 the UK government is forecast to spend a total of £753 billion.

Source: HMT public spending statistics (May 2017)

Also see: HM Treasury PESA (released 21 July annually

Real term trends in public spending

Source: HMT public spending statistics (May 2017)

   UK Pension spending

More details on pension spending.

Government spending as % of GDP

Years 2018/19/20, forecasts

Forecasts of Government spending from Autumn Statement of Dec. 2014

Source: OBR, Dec 2014

This is outdated, but I leave in because it illustrates how chancellor George Osborne hoped strong economic growth would enable government spending to fall to 35% of GDP by 2018/19. However, that will not happen because of lower than expected growth and unexpected government spending.

Government borrowing

• More on Government net borrowing here

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

Government spending as % of GDP