UK Government spending – real and as % of GDP

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

real-government-spending

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

government-spending-percent-gdp-post-war

Years 2018/19/20, forecasts

Forecasts of Government spending from Autumn Statement of Dec. 2014

government-spending-percent-gdp-obr-14

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This is outdated, but I leave in because it illustrates how chancellor George Osborne hoped strong economic growth would enable government spending to fall to 35% of GDP by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

net-borrowing-totalJ511

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-percent-gdp-1920-2020

  • 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

 

By on July 6th, 2017

6 thoughts on “UK Government spending – real and as % of GDP

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

    Real shame.

  2. can anyone tell me what percentage of UK assets were state controlled by 1979 in terms of GDP, or other indicators?

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