http://www.bized.co.

uk

Public Sector
Spending

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Public Sector Spending

• The Public Sector – that part of

business activity that is organised
and controlled by the government
or its agencies on behalf of the
nation as a whole
• The public sector comprises:

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Public Sector
• Central Government
– Parliament
– Government Departments – education, defence, etc.
– Devolved Governments
– Other public funds - Foreign exchange reserves, Quangos
• Quasi Autonomous Non-Governmental Organisations
now referred to as Non Departmental Public Bodies,
e.g. Equal Opportunities Commission, Advertising
Standards Authority, Competition Commission, English
Heritage
• Local Government
• Public Corporations
– Post Office
– BBC

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Public Sector Spending

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Public Sector Spending

Data Source: HM Treasury Public Sector Finances Databank

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Public Sector Spending

• Total Managed
Expenditure for
2003 – 2004:
• £454.6 billion!

Most items of defence spending do not come cheap.

Copyright: Stock.Xchng

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Total Managed Expenditure (TME)

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Total Managed Expenditure

• The Government’s preferred
measure of public spending
• Derived from National Accounts
• Meets international guidelines

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Components of TME
• Current Expenditure: Spending on day-to -day
government activities

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Components of TME

• Capital Expenditure:
• Spending on buildings, machinery, vehicles,
etc.
• Fixed Capital Formation
– Tangible assets – buildings and so on
– Intangible assets – for example, software
– Capital grants

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Financial Transactions

Copyright 2007 – Biz/ed

 http://www.bized.co.uk

Components of TME
• Financial Transactions:
• Financial transactions carried out
by the government – e.g. buying
shares, lending money to business
and other countries, etc.

Copyright 2007 – Biz/ed