Accredited official statistics

Public spending statistics: November 2020

Published 18 November 2020

1. About this release

This release presents updated Public Spending data for the years 2015-16 to 2019-20. All data in this release are National Statistics and are on an outturn basis. TME figures are consistent with data published by the ONS from October 2020. All data and further background detail can be found in the accompanying tables published alongside this release. We welcome any feedback at pesa.document@hmtreasury.gov.uk

2. Total expenditure (£billions)

Expenditure	2018-19	2019-20
Total DEL expenditure	371.4	403.8
Resource departmental AME	244.6	375.5

^{Budgets are divided into Departmental Expenditure Limits (DEL), which are firm plans for three or four years, and Annually Managed Expenditure (AME), covering spending which is demand-led, less predictable and more difficult to control. In the accompanying excel tables, table 1 shows the aggregate position for all departments and all types of spending, with some of the main types of spending shown separately. Table 8 shows in detail how the budgeting data is used to construct the Total Managed Expenditure (TME) figures published by the Office for National Statistics. These are based on National Accounts concepts and are used in the aggregates which underlie the government’s fiscal policy.}

Expenditure	2018-19	2019-20
Total Managed Expenditure (TME)	854.5	884.3
Total expenditure on services (TES)	771.4	797.6

• TME was £884.3 billion in 2019-20, an increase of 3.5 per cent on the previous year.
• TES was £797.6 billion in 2019-20, an increase of 3.4 per cent on the previous year.

3. Total Departmental Expenditure Limits, 2019-20 (£millions)

^{For the full table, including years from 2015-16 onward, please refer to Table 7 in the accompany budget tables excel.}

Departmental Group	Total DEL
Health and Social Care	140,453
Education	68,389
Home Office	12,290
Justice	8,357
Law Officers’ Departments	618
Defence	39,833
Single Intelligence Account	2,974
Foreign and Commonwealth Office	2,552
International Development	10,030
MHCLG - Housing and Communities	10,766
MHCLG - Local Government	8,572
Transport	18,409
Business, Energy and Industrial Strategy	13,735
Digital, Culture, Media and Sport	2,150
Environment, Food and Rural Affairs	2,783
International Trade	481
Work and Pensions	5,776
HM Revenue and Customs	4,318
HM Treasury	489
Cabinet Office	1,059
Scotland	20,977
Wales	14,179
Northern Ireland	12,702
Small and Independent Bodies	1,925

3.1 Budgeting Statistics (Tables 1 to 9)

• Total DEL expenditure (Resource DEL excluding depreciation plus Capital DEL) was £403.8 billion in 2019-20, an increase of £32.4 billion or 8.7 per cent on the previous year in nominal terms.
• Total departmental expenditure (Total DEL plus resource and capital departmental AME) was £802.6 billion in 2019-20, an increase of £174.0 billion or 27.7 per cent on the previous year. This is mainly due to a low figure for Resource departmental AME in 2018-19, which reflected a significant change in the accounting valuation of provisions following a change in the long-term Treasury discount rate.
• Resource departmental AME was £375.5 billion in 2019-20, an increase from £244.6 billion in 2018-19. The lower resource departmental AME expenditure in 2018-19 reflected a significant change in the accounting valuation of provisions as a result of changes in the long-term Treasury discount rate which inflated the present value of expected future long-term costs. The largest increase in 2019-20 was for Business, Energy and Industrial Strategy (£115 billion) which mainly reflects the lower provisions for the Nuclear Decommissioning Authority (NDA) in the previous year. This was a non-cash charge.

^{In the accompanying excel tables, tables 1 to 9 show central government departmental spending on a budgetary basis. These are the aggregates used by the government to plan and control expenditure. They cover departments’ own spending as well as support to local government and public corporations. They are consistent with “Estimates” voted by Parliament and broadly consistent with departmental Resource Accounts, which are based on commercial International Financial Reporting Standards (IFRS) adapted for the public sector.}

4. Real terms public expenditure (£billions)

Functions	2018-19	2019-20
General public services	81.9	81.4
Defence	41.2	42.2
Public order and safety	33.2	34.5
Economic affairs	62.2	64.7
Environment protection	11.3	11.7
Housing and community amenities	12.3	14.4
Health	156.7	164.1
Recreation, culture and religion	11.7	11.7
Education	90.2	90.7
Social protection	281.5	276.1

^{In the accompanying excel tables, tables 10 to 11 present spending under the “expenditure on services” framework. This is based on National Accounts definitions and covers the whole of the public sector. It therefore has wider coverage than the budgeting framework and is also more stable over time.}

4.1 Trends in functional expenditure (Tables 10, 10a and 10b)

Compared with the previous year:

• in real terms, spending in seven of the ten functions (excluding EU transactions) for 2019-20 increased whilst spending in two functions fell, compared to 2018-19.
• the largest real terms percentage increases were in housing and community amenities (16.8 per cent) and in health (4.7 per cent).
• the largest real terms percentage decreases in spending were in social protection (-1.9 per cent) and general public services (-0.5 per cent)
• Spending on health shows a nominal and real terms increase in 2019-20 (7.3 per cent in nominal terms, 4.7 per cent in real terms).

^{In the accompanying excel tables, tables 10, 10a and 10b show public sector expenditure on services broken down by function over a longer number of years, allowing long-term trends to be identified. Table 11 presents data broken down by economic categories such as pay or grants.}

5. National Statistics

The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics. Designation can be broadly interpreted to mean that the statistics:

• meet identified user needs
• are well explained and readily accessible
• are produced according to sound methods
• are managed impartially and objectively in the public interest

Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.

6. Spending frameworks used in HM Treasury spending publications

Budgeting	Expenditure on services (TES)
This framework provides information on central government departmental budgets, which are the aggregates used by the government to plan and control expenditure. It covers departmental own spending as well as support to local government and public corporations.	This framework is used in HM Treasury publications for statistical analysis. It is based on National Accounts definitions and covers spending by the whole of the public sector. It therefore has wider coverage than the budgeting framework and is also more stable over time.

7. Trends in public spending

7.1 Chart 1: Trends in public spending since 1997-98

• During the recession, as GDP shrank but spending increased, TME took an increasingly large share of national income. As a result, TME as a percentage of GDP peaked at 46.3 per cent in 2009-10. In 2019-20 it stood at 39.9 per cent of GDP (Table 10b).
• In 2019-20 public expenditure on Health was equal to 7.4 per cent of GDP, compared to 4.6 per cent in 1997-98. Education spending stood at 4.0 per cent in 1997-98 compared to 4.1 per cent of GDP in 2019-20. These changes reflect a mix of demographics and the policy priorities of successive governments.
• The share of GDP taken by public sector debt interest payments was 2.5 per cent in 2019-20. This compares with a peak of 3.7 per cent last seen in 1997-98, when interest rates were significantly higher than now.

7.2 Chart 2: Real terms trends in Public Spending

^{From 2011-12 onwards the ‘grant-equivalent element of student loans’ is no longer part of the TES framework and has therefore been removed from the Education function. Therefore figures are not directly comparable between 2010-11 and 2011-12. A full explanation of this decision can be found in PESA 2020 Annex E.}

In real terms (i.e. after adjusting for the effect of inflation):

• spending on Social Protection was £276.1 billion in 2019-20, down from £281.5 billion in the previous year
• health spending (including spending by central government departments and devolved administrations) was £164.1 billion in 2019-20, compared to £156.7 billion spent in 2018-19

8. Revisions in this release (since July 2020 publication)

Expenditure	Amount (£millions)	Comments
Total DEL expenditure	+£106m	Resource and Capital DEL (excluding depreciation) has been revised up in 2019-20. Driven mainly by changes to Resource and Capital DEL reported by the Ministry of Defence (MoD), and changes to Resource DEL reported by the Cabinet Office.
Resource departmental AME	+£302m	Driven mainly by MoD. The changes reflect data being brought into line with their 2019-20 resource accounts.

Changes to Total Managed Expenditure (TME) and public sector debt interest in all years are due to updated ONS data. More information about these changes is available in the monthly ONS public sector finances (PSF) release

An adjustment has been made to Scottish local government capital spending in 2019-20. The July PSS reflected an increase in capital spending consistent with the headline figures set out in the provisional capital expenditure outturn published by the Scottish Local Government and Communities Directorate. However, some of this increase is associated with a number of sale and leaseback transactions in one local authority. Following the approach set out in section 6.2 of the Manual on Government Deficit and Debt 2019, these transactions have been excluded from capital expenditure figures in the PSS. This treatment was also outlined on page 51 of the Government Expenditure and Revenue Scotland 2019-20 release.

9. Additional information about the PSS release

9.1 Upcoming revisions and changes in forthcoming releases

The PSS release is now published in an HTML format (this publication was previously available as a pdf). These changes have been made with the aim of improving the accessibility and presentation of the publication. The next HM Treasury PSS National Statistics release will be published in February 2021. There are no expected changes to the spending frameworks for the next release.

9.2 PSS publication schedule for the coming year

Date	Release
Feb 2021	This release contains updates to the key Public Spending Statistics series. It includes updated data for local authorities for the previous financial year.
July 2021	The July PSS release contains the first publication of departmental spending outturn for the 2020-21 financial year. Local authority data and much of the data from the devolved administrations are still provisional at this stage of the year. This is the main annual release.
Nov 2021	As well as the PSS release, the Country and Regional Analysis (CRA) is also published in November each year.