The optimal economic role of the state is a fundamental question in politics. As public spending increases, the quality of services like health and education do not always increase commensurately, and the higher taxes we pay for public spending start to seriously undermine economic efficiency. This briefing presents statistics and commentary on recent changes in public spending, as measured by total managed expenditure:
- In 2022-23, total managed expenditure is projected to rise to £1.2 trillion (47.3 per cent of GDP),[1] up £135 billion from the previous financial year.
- That amounts to £41,831 annually per household, or £802 a week.[2] Or, to put it another way: £17,386 per person each year.[3]
- Spending in 2022-23 as a percentage of GDP is higher than when James Callaghan left office in 1979 and is comparable to the years following the 1973 oil crisis.
- Total managed expenditure rose by 13.4 percentage points of GDP between 2019-20 and 2020-21, the fastest rise in peacetime history.
- If the UK government is serious about limiting the tax burden on families in an era of low growth and high debt, public spending needs to get back under 35 per cent of GDP.
READ THE BRIEFING NOTE
[1] OBR, Public finances databank, 17 November 2022, obr.uk/data, (accessed 17 November 2022).
[2] ONS, Families and households in the UK: table 5, 9 March 2022, www.ons.gov.uk/file?uri=/peoplepopulationandcommunity/birthsdeathsandmarriages/families/datasets/familiesandhouseholdsfamiliesandhouseholds/current/familiesandhouseholds2021accessibilitycorrected.xlsx, (accessed 8 November 2022).
[3] ONS, Estimates of the population for the UK, England, Wales, Scotland and Northern Ireland, 25 June 2021, www.ons.gov.uk/file?uri=/peoplepopulationandcommunity/populationandmigration/populationestimates/datasets/populationestimatesforukenglandandwalesscotlandandnorthernireland/mid2020/ukpopestimatesmid2020on2021geography.xls, (accessed 14 November 2022).