TRENDS IN PUBLIC SECTOR EXPENDITURE
Public Expenditure Statistical Analyses 2004
3.1 The analyses in this chapter give a picture of changes in government expenditure over
recent years. The analyses are generally based on national accounts concepts or functional
analyses. They are therefore not affected by changes in the allocation of responsibilities
between government departments or between central and local government. Nor are they
affected by changes in the budgeting regime.
3.2 Data in this chapter are a mix of cash and accruals. All outturn data up until
1997–1998 are on a cash basis. Outturn for 1998–99 to 2002–03 are on an accruals basis, as are
estimated outturn data for 2003–04 and plans data, where shown, for 2004–05 and 2005–06.
All outturn data (to 2002–03) in the tables in this chapter are National Statistics.
Public expenditure aggregates
3.3 Table 3.1 shows trends in public expenditure over the years 1965–66 to 2005–06 in
nominal and in real terms and as a percentage of gross domestic product (GDP). The table
shows three spending aggregates in this detail: public sector current expenditure, public
sector net investment and Total Managed Expenditure (TME). Data for a fourth aggregate,
public sector depreciation, are shown in nominal terms only. Data for all these aggregates for
the years up to 2002–03 are taken from the national accounts compiled by the Office for
National Statistics (ONS). Public sector current expenditure plus public sector net investment
plus public sector depreciation is equal to TME – which is a measure of total public sector
spending drawn from national accounts. Figures for 2003–04 are estimated outturn and for
2004–05 onwards are projections produced by the Treasury.
Total Expenditure on Services by function
3.4 Tables 3.2 to 3.6 analyse spending by function. The functional categories are based on