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The public sector comprises central government, local government and public corporations. Spending data cover recent outturn, in-year estimates and spending plans. Spending is presented against the budgeting framework alongside analyses by function, economic category, sector and country/region.


Budgeted Expenditure on Special Education Needs Provision in Wales
Department: Welsh Government
Statistics on budgeted expenditure on Special Educational Needs (SEN) Provision include data for Wales as reported by Welsh Local Education Authorities.
Country and Regional Analysis
Department: HM Treasury
The Country and Regional Analysis presents analysis of public spending by country, region, and function and is consistent with departmental outturns published in July.
National Accounts Sector Classification
Department: Office for National Statistics
National Accounts Sector Classification describes the classification of organisations and institutions in the National Accounts.
Public Expenditure Outturns
Department: HM Treasury
Presents UK public spending outturns against the budgetary framework as well as analysis by function.
Public Expenditure Statistical Analyses
Department: HM Treasury
Presents UK public spending outturns against the budgetary framework as well as analysis by function, economic category and territory (country and region, NUTS1).
Public Spending Statistics
Department: HM Treasury
Public Spending Statistics present analyses of public spending against budgeting and expenditure on services frameworks. These analyses cover public spending by department, function and economic category.
Sustainable Communities Act 2007: Local Spending Report England
Department: Communities and Local Government
This Local Spending Report contains details of outturn expenditure in 2006-07 in local areas in England.

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All spending series are for financial years and normally cover the most recent five years, although some longer historical series are available. The analyses can broadly be split into four categories:

The budgeting framework

This is the framework by which central government spending is managed and controlled. Information is provided on all departmental budgets and control totals.

Public spending by function and economic category

This section presents analyses of public sector spending using the aggregate Total Expenditure on Services (TES). TES broadly represents the current and capital spending of the public sector as included within the National Accounts. Spending is presented against the United Nation’s (UN’s) functional framework (for example, health) and against economic categories (for example, pay).

Sectoral analyses

This provides a breakdown of public sector spending into the sectoral components. It splits budgets into central government (CG) own spending and CG support to the local government (LG)/public corporation (PC) sectors. It also presents the sectoral elements of TES by function and economic categories.

Public spending by country/region

This analysis presents public spending within TES that can be identified as benefiting a particular country and/or region within the UK. It additionally presents country/regional spending by function.

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Technical Data

The budgeting framework

This is the framework by which central government spending is managed and controlled. In accordance with the fiscal framework, a clear distinction is made between current and capital spending, with departments having separate resource and capital budgets. The resource budget is further divided into elements called near-cash and non-cash.

For part of their resource and capital budgets, departments are given firm three-year spending limits called Departmental Expenditure Limits (DEL) within which they prioritise resource and plan ahead. Spending that cannot reasonably be subject to firm multi-year limits is included in Annually Managed Expenditure (AME).

The main elements of departmental AME budgets are social security and tax credits, while there is also non-departmental AME covering, for example, local government self-financed spending, debt interest and accounting adjustments. DEL and AME together comprise Total Managed Expenditure (TME), an aggregate derived from the National Accounts as public sector current expenditure plus public sector gross investment.

Further information is available in appendix C of Public Expenditure Statistical Analyses, the latest edition of which is available on the HM Treasury website.

Total Expenditure on Services (TES)

TES broadly represents the current and capital spending of the public sector as included within the National Accounts aggregate TME. Simplifying slightly, TES is calculated by identifying central government (CG) own spending (that is, CG spending in the National Accounts that doesn’t support the local government/public corporation (LG/PC) sectors) and adding this to total LG and PC spending. The main differences between TES and TME are that TES does not include general government capital consumption and VAT refunds are treated differently.

This is the key concept to understand in the presentation of public sector spending analyses by function, economic category and country/region. That is, these analyses all present a breakdown of TES. Further information is available in appendix E of Public Expenditure Statistical Analyses (PESA), the latest edition of which is available on the HM Treasury website.

Functional framework

Functional spending (for example, health and education) is based on the United Nation’s (UN’s) Classification Of the Functions Of Government (COFOG). Public spending for the UK is consistent with this framework at level two, with the exception of the health function, which is consistent with COFOG level one but at the lower level of detail continues to be presented against HM Treasury’s own sub-functional classificationbecause ofproblems with the availability of COFOG-consistent data. Further information on COFOG is available on the UN’s website.

Data sources

All central government and public corporation spending is captured through HM Treasury’s spending database, the Combined Online INformation System (COINS). Local government spending information is derived from revenue and capital finance data collections completed by local authorities and published by Communities and Local Government and the devolved administrations.

The one exception to the above is data for historical tables, as departments maintain only five outturn years on the live database. Summary data are archived at the point at which they are no longer live and adjusted by HM Treasury as necessary to ensure that this information is kept consistent with the current classifications.

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  • Annually Managed Expenditure (AME)

    This is spending included in Total Managed Expenditure (TME) that does not fall within Departmental Expenditure Limits (DELs). Expenditure in AME is generally less predictable and controllable than expenditure in DEL. Departmental AME is spending in AME which is scored in departmental budgets.

  • Capital budget

    The capital budget is divided into capital DEL (a control total) and capital AME (a planning total). The capital budget includes: capital formation and the acquisition of assets such as land, buildings, machinery and vehicles; single use military equipment that is treated as capital in resource accounts (although this is treated as current expenditure in National Accounts); net lending undertaken for policy purposes; net means of repayment of debt principal; large (over 20m) debtors or prepayments, which are long-term (that is over 12 months); and capital grants.

  • Capital expenditure

    Usually understood to mean capital formation (that is, producing assets), the net acquisition of assets and capital grants (that is, grants that the beneficiary must use to produce or purchase assets). In the National Accounts, capital expenditure is referred to as investment.

  • Central government

    This is a sector in National Accounts. It comprises Parliament; government departments and their executive agencies; the devolved assemblies of Scotland, Wales and Northern Ireland; government funds such as the National Loans Fund; the foreign exchange official reserves; non-departmental public bodies; and various other non-market public bodies that are controlled by central government. Central government does not include public corporations, nor those non-profit institutions that receive significant government funding but are part of the private sector (for example, universities, further education colleges, and housing associations).

  • Central government own expenditure

    Expenditure that central government makes to the private sector plus subsidies to public corporations. It excludes central government support to local authorities and capital support to public corporations.

  • Classification of the Functions of Government (COFOG)

    A United Nations (UN) framework for functional analysis of government spending. The Public Expenditure Statistical Analyses (PESA) is consistent with UN COFOG at level two, with the exception of the health function, which continues to be presented on the HM Treasury’s own sub-functional classification. Further information on COFOG is available on the UN’s website.

  • Current expenditure

    This is spending on items that are consumed in the process of providing goods or services or, in other words, is recurring spending. This includes, for example, wages and salaries, benefits, purchasing medicines and stationary.

  • Departmental Expenditure Limits (DELs)

    Firm three-year plans for a specific part of a department's expenditure. In general, DEL will cover all administration costs and all programme expenditure, except in certain cases where spending is included in departmental Annually Managed Expenditure (AME) because it cannot reasonably be subject to close control over a three-year period. DEL normally includes relevant non-cash items such as depreciation, cost of capital charges, and provisions.

  • Economic Categories

    These represent broad classifications in National Accounts. Examples of economic categories are pay, social benefits and other grants paid to the private sector, and subsidies.

  • Identifiable expenditure

    Expenditure that can be recognised as having been incurred for the benefit of individuals, enterprises or communities within particular regions. Examples are, most health, education and transport services, and spending on social security and pensions.

  • Local government

    A sector in National Accounts. It comprises all local authorities in the UK including county councils, metropolitan districts, parish councils, police and fire authorities, residuary bodies, passenger transport authorities, Transport for London, London boroughs and the Greater London Assembly.

  • National Accounts

    This is a statistical system that represents the UK's economic transactions. The system provides a number of key economic statistics including gross domestic product (GDP), consumers' expenditure, the balance of payments with the Rest of the World, and the public sector balances used in the Code for Fiscal Stability.

  • Near cash in resource budgets

    Expenditure measured on an accruals basis that turns into cash transactions quickly, such as pay, current procurement and income from sales. Near cash includes expenditure that in accounting terms is covered by the release of provisions, or financed from prepayments. Near-cash expenditure in resource budgets closely matches the expenditure that impacts on the current spending in the National Accounts. Near-cash in resource Departmental Expenditure Limits (DEL) is a control total.

  • Non-cash in resource budgets

    These items refer to various notional transactions that appear in the operating cost statement under resource accounting, such as depreciation, cost of capital charges and the taking and release of provisions. Most non-cash items are in DEL, although some are in Annually Managed Expenditure (AME).

  • Non identifiable expenditure

    Expenditure that cannot be identified to particular regions as it is deemed to be incurred on behalf of the UK as a whole, such as defence expenditure, overseas representation, and tax collection.

  • Public corporations

    Publicly controlled trading bodies with substantial financial and operational independence from central and local government. To be classed as trading, they must receive the majority of their income from sales into a market, rather than grant funding from government. They include Royal Mail Holdings, and most trading funds such as the Meteorological Office and Companies House.

  • Public sector

    Comprises central government, local government and public corporations, as classified by the Office for National Statistics (ONS) for the National Accounts. The Bank of England is in its own separate sector.

  • Resource budget

    This is the budget for current expenditure on an accruals basis (including both near-cash and non-cash items). It is divided into resource DEL (which is a control total) and resource departmental AME (a planning total).

  • Total Expenditure on Services (TES)

    An aggregate used by Her Majesty’s Treasury (HMT) to analyse the capital and current spending of the public sector. It includes most current and capital expenditure incurred in the process of providing services and is therefore, broadly equivalent to TME. The main differences are that TES does not include depreciation and it has a different treatment of VAT refunds.

  • Total Managed Expenditure (TME)

    A definition of aggregate public spending derived from National Accounts. It is the consolidated sum of current and capital expenditure of the public sector.

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Contact Details

For statistical enquiries about this topic, please contact:

PESA branch

Email: pesa@hm-treasury.gov.uk

Telephone: +44 (0) 20 7270 4558

Floor 1/W1 HM Treasury 1 Horse Guards Road London SW1A 2HQ

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