By: Shimeon Lee, researcher
Over the past decade growth in public sector spending has been monumental. The average person would find it difficult to understand the sheer scale of public spending when looking at official statistics. Spending by government departments often runs into the tens and even hundreds of billions, with total public sector expenditure well over £1 trillion in 2024-25. In an attempt to paint a simpler picture of public sector finances and show how they have changed over the past decade, this blog looks at how £100 was spent by the public sector in 2010-11 compared to 2022-23.
In total, the public sector took in £603.40 billion in 2010-11. For every £100 taken in by the public sector in 2010-11 in the form of taxation and other revenues, it spent £123.43 (£23.43 over budget). Of this £123.43:
- £28.02 was spent by the Department for Work and Pensions
- £15.87 was spent by the Department of Health
- £10.73 was spent by the Scottish, Welsh and Northern Irish governments
- £8.21 was spent by the Department for Education and Ofqual
- £6.37 was spent by the Ministry of Defence
- £6.36 was spent by the Department for Communities and Local Government
- £5.22 was spent by HM Treasury [1] and HM Revenue and Customs
- £2.44 was spent by the Home Office
- and £8.14 was spent on debt interest
From 2010-11 to 2022-23, government revenues increased by 69.52 per cent, from £604.40 billion to £1.023 trillion. However, this still could not match the pace of spending, which rose to £1.155 trillion within the same period.
Looking at public sector spending over a decade later, you would think that with more money, they would be able to spend within their means. Sadly, this isn’t the case. For every £100 taken in by the public sector in 2010-11, in 2022-23 it was now taking in £169.52 and spending £191.40. Of this £191.40:
- £39.63 was spent by the Department for Work and Pensions
- £27.55 was spent by the Department for Health and Social Care
- £19.14 was spent by the Scottish, Welsh and Northern Irish governments
- £16.79 was spent by the Department for Education
- £7.86 was spent by the Ministry of Defence
- £5.84 was spent by the Department for Levelling Up, Housing and Communities
- £29.20 was spent by HM Treasury and HM Revenue and Customs
- £3.31 was spent by the Home Office
- and £17.71 was spent on debt interest
What does this mean? Spending by almost all major departmental groups increased substantially from 2010-11 to 2022-23. Excluding HM Treasury, whose 2022-23 transactions were affected by financial sector interventions, the largest percentage increases in spending were by the Department for Education (which saw a £54.3 billion or 115.43 per cent increase), the Department for Health and Social Care (£75.29 billion/ 82.21 per cent) and the Department for Work and Pensions (£78.6 billion/ 48.97 per cent). These increases in expenditure were all greater than the rate of inflation, which was 36.09 per cent from 2010 to 2022.
Of the directly comparable departmental groups [2] , only the Department of Culture, Media and Sport (£1.80 billion/ 25.1 per cent) and the Ministry of Justice (£1.47 billion/ 15.5 per cent) did not see increases in expenditure above the rate of inflation, while the Department for Levelling Up, Housing and Communities actually saw a £1.21 billion or 3.31 per cent cut.
Because the government consistently spends more than it receives, it is forced to rely on borrowing, which comes with strings attached. For every £100 taken in by the public sector in 2010-11, it had to borrow £23.43 and owed another £193.69.
While the departmental overspend has come down (by 2022-23, borrowing had fallen such that for every £100 taken in by the public sector, it now only borrowed £12.91), it’s too little too late. The problem is now dealing with the mountain of debt they have incurred. By 2022-23 debt had grown to £247.51 for every £100 taken in by the public sector. And this is just using the official figures on debt. This excludes a vast number of vast liabilities, mostly pensions, which means the real national debt is more like £12.1 trillion.
Debt isn’t free; it needs to be paid off, with interest, of course. The share of spending on debt interest has more than doubled from £46.61 billion in 2010-11 to £106.84 billion in 2022-23. This means that for every £100 taken in by the public sector in 2022-23, £10.44 went towards debt interest, more than what is spent by the Department for Education and more than double what is spent by the Ministry of Defence.
Spending across the public sector has clearly risen from 2010-11 to 2022-23, in most cases above the rate of inflation. With this being said, the bigger question is whether the increased spending has correlated with an increase in the quality of public services. If you have been following our work, you’ll know the answer…
Ultimately, the public sector has been poorly managed for over a decade. The warning signs were there in 2010-11 when spending did not match the amount the government received in taxes and other income. This pattern has continued with the added pressures of rising debt interest and inflation. The government expects households to put up and shut up with no end in sight, while they themselves consistently fail to live within their means.
Public sector current receipts, borrowing and net debt (2010-11, 2022-23):
Public finances databank 2023-24 - Office for Budget Responsibility
Total managed expenditure 2010-11
HM Treasury, Public Expenditure Statistical Analyses 2015
Total managed expenditure 2022-23
HM Treasury, Public Expenditure Statistical Analyses 2023
Inflation
Inflation calculator | Bank of England
[1] Transactions in 2022-23 affected by financial sector interventions
[2] Department for Transport, Department of Business, Industry and Skills and Department for Energy and Climate Change have not been included in this analysis due to significant reorganisations occurring between 2010-11 and 2022-23