99/04

2 December 2004

Public expenditure annual outturns

National Statistics release 2 December 2004
Updates for 2003-04 and earlier years for key series

This release provides new estimates of financial year outturns for some key public expenditure series that are complied and published by H M Treasury as National Statistics.

New estimates of outturn are being released for four series:

Table 1 - Total Managed Expenditure, by budgetary category, up to 2003-04.
Table 2 - Resource Departmental Expenditure Limits, by departmental grouping, up to 2003-04
Table 3 - Capital Departmental Expenditure Limits, by departmental grouping, up to 2003-04
Table 4 - Total Expenditure on Services by function, 1999-00 to 2003-04.

The data included in this release update provisional outturns for 2003-04. There are also some limited revisions to data for earlier years.

Public Expenditure by budgetary category

Data in tables 1, 2 and 3 update earlier estimates published in Public Expenditure Outturn White Paper (PEOWP), in July 2004 and Public Expenditure Statistical Analyses (PESA), in April 2004 (ref: Cm6201). Both documents are available on the Treasury website.

Estimates of outturn for 2003-04 were first released in PEOWP in July 2004 (previously these were forecasts). The data in this release further updates these provisional estimates.

Total Managed Expenditure (TME) for 2003-04 is now estimated at £453.6 billion, higher than the PEOWP 2004 estimate of £453.4 billion.

Total Departmental Expenditure Limits (full RAB basis, excluding depreciation) spending in 2003-04 is now estimated at £264.6 billion, which is £0.2 billion higher than the estimate of £264.4 billion in July. Resource DEL (including depreciation), at £250.5 billion, is £0.1 billion higher than July. These changes reflect the availability of more up-to-date information.

Total Managed Expenditure in 2003-04 – Comparison with July 2004

2003-04 £ billion

RAB Stage 2 basis	Resource DEL¹	Capital DEL	Depreciation in DEL	Total AME²	TME³
December 2004	250.5	23.2	9.1	189.0	453.6
July 2004	250.4	23.2	9.2	189.0	453.4

¹ Including depreciation
² AME is Total AME, i.e. Departmental AME, other AME and accounting adjustments
³ TME = Resource DEL + Capital DEL - depreciation in DEL + AME

These latest figures, including DEL by department grouping, and the latest plans data up to 2007-08, will be available to download as a consistent series on the Treasury public website from 3rd December 2004 within the Public Spending Overview page.

Public Expenditure by function

Data for spending by function (Table 4) were published in Public Expenditure Statistical Analyses (PESA) in April 2004 (ref: Cm6201) and then further updated in the previous National Statistics release in July 2004. The provisional estimates from July have now been updated, in line with the revised budgetary outturns in tables 1, 2 and 3.

Public spending by function includes spending by the devolved administrations, local authorities and capital spending of public corporations. At this stage 2003-04 local authority spending data, which is supplied by the Office of the Deputy Prime Minister (ODPM) are based on emerging findings, and therefore remains provisional.

An historical public expenditure by function series was published in table 3.2 of PESA 2004, including data from 1993-94 onwards. Further historical data were released on the Treasury public website on 27th September 2004. Latest estimates of public expenditure by function and the historical data will be available to download as a consistent series from the Treasury public website from 3rd December 2004 within the Public Spending by Function page.

Table 1⁽¹⁾ Total Managed Expenditure, by budgetary category, up to 2003-04

					£ million
	National Statistics
	1999-00	2000-01	2001-02	2002-03	2003-04
	outturn	outturn	outturn	outturn	outturn
Departmental Expenditure Limits
Resource Budget	184,048	199,733	215,682	236,158	250,467
Capital Budget	12,064	15,243	18,434	20,794	23,237
less depreciation	7,230	9,109	9,505	15,525	9,116
Total Departmental Expenditure Limits	188,882	205,867	224,611	241,426	264,588

Annually Managed Expenditure
Departmental AME
Social Security benefits ⁽²⁾	99,869	101,849	109,211	113,882	120,137
Tax Credits	1,268	3,903	5,189	5,829	9,791
Common Agricultural Policy	2,742	2,898	3,653	2,617	2,905
Net public service pensions	1,898	2,095	3,197	4,677	1,839
National Lottery	1,908	1,855	1,710	1,810	1,910
Non - cash items	19,304	21,136	22,094	28,626	27,096
Other departmental expenditure	2,324	2,377	1,850	2,046	1,867
Total Departmental AME	129,313	136,114	146,904	159,486	165,545

Other AME
Net payments to the EC institutions	2,807	3,734	842	2,345	2,395
Locally financed expenditure	18,483	18,265	20,906	20,380	20,635
Central Government gross debt interest	24,931	25,918	22,030	20,834	22,209
Public corporations own-financed capital expenditure	1,392	971	1,540	1,970	2,471
Total Other AME	47,612	48,888	45,319	45,529	47,710
Total AME before Accounting Adjustments	176,926	185,002	192,223	205,015	213,255
AME Margin
Accounting adjustments	-24,477	-26,341	-28,824	-28,066	-24,284
Total Annually Managed Expenditure	152,449	158,661	163,399	176,950	188,971
Total managed Expenditure	341,331	364,528	388,010	418,376	453,558
of which:
Current Expenditure	324,307	346,417	364,755	393,032	425,503
Net Investment	4,420	5,154	9,891	11,264	13,715
Depreciation	12,604	12,957	13,364	14,080	14,340

⁽¹⁾ Based on PESA 2004 Table 1.1
⁽²⁾ Social security benefits include bad debts and rent rebates (from Housing Revenue Account Subsidy(HRAS))

Table 2⁽¹⁾ Resource Departmental Expenditure Limits, by departmental grouping up to 2003-04

					£ million
	National Statistics
	1999-00	2000-01	2001-02	2002-03	2003-04
	outturn	outturn	outturn	outturn	outturn
Education and Skills	12,895	14,734	17,200	21,155	23,050
Health	41,299	44,564	52,018	56,322	62,657
of which: NHS	40,759	44,000	51,181	54,611	60,919
Transport	4,027	3,378	4,444	6,197	7,923
Office of the Deputy Prime Minister	2,767	2,932	2,729	3,982	4,732
Local Government	33,922	35,270	36,922	37,397	40,915
Home Office	7,446	8,832	10,551	11,131	11,721
Constitutional Affairs	2,319	2,802	2,998	3,345	3,173
Law Officers' Departments	336	367	439	487	549
Defence	31,329	33,394	32,334	36,422	31,488
Foreign and Commonwealth Office	1,132	1,498	1,429	1,543	1,586
International Development	2,743	3,000	3,095	3,482	3,829
Trade and Industry	3,918	5,983	5,420	3,969	4,492
Environment, Food and Rural Affairs	2,214	2,750	2,593	2,729	2,791
Culture, Media and Sport	1,039	1,086	1,049	1,247	1,273
Work and Pensions	5,798	6,115	6,478	7,361	8,292
Scotland	13,219	14,077	15,353	16,539	18,479
Wales	6,788	7,232	8,244	9,139	9,750
Northern Ireland Executive	4,809	5,674	5,748	6,610	6,378
Northern Ireland Office	1,135	973	1,073	1,096	1,053
Chancellor's departments	3,540	3,767	4,022	4,369	4,553
Cabinet Office	1,374	1,305	1,543	1,636	1,782
Total resource DEL	184,048	199,733	215,682	236,158	250,467

⁽¹⁾ Based on PESA 2004 1.7

Table 3⁽¹⁾ Capital Departmental Expenditure Limits, by departmental grouping up to 2003-04

					£ million
	National Statistics
	1999-00	2000-01	2001-02	2002-03	2003-04
	outturn	outturn	outturn	outturn	outturn
Education and Skills	1,113	1,944	2,110	2,729	3,297
Health	899	1,227	1,717	1,975	2,553
of which: NHS	850	1,173	1,623	1,903	2,466
Transport	1,115	1,405	2,430	3,103	3,013
Office of the Deputy Prime Minister	1,578	2,334	1,750	1,492	2,313
Local Government	272	56	84	202	214
Home Office	395	403	576	743	929
Constitutional Affairs	37	38	84	88	133
Law Officers' Departments	4	14	23	8	11
Defence	4,051	5,391	5,836	6,149	5,929
Foreign and Commonwealth Office	88	105	60	102	70
International Development	25	-16	24	17	27
Trade and Industry	5	49	171	349	578
Environment, Food and Rural Affairs	189	170	253	260	354
Culture, Media and Sport	57	34	37	43	147
Work and Pensions	47	41	162	264	207
Scotland	1,041	1,173	1,761	1,594	1,429
Wales	588	556	541	681	783
Northern Ireland Executive	246	304	353	495	355
Northern Ireland Office	25	35	41	53	55
Chancellor's departments	87	-223	205	262	251
Cabinet Office	202	202	215	182	587
Total resource DEL	12,064	15,243	18,434	20,794	23,237

⁽¹⁾ Based on PESA 2004 1.8

Table 4⁽¹⁾ Total Expenditure on Services by function, 1999-00 to 2003-04

			accruals, £ billion
	National Statistics
	1999-00	2000-01	2001-02	2002-03	2003-04
	outturn	outturn	outturn	outturn	estimated outturn
General public services	9.5	9.3	10.6	11.1	12.2
EU transactions	-2.7	-2.6	-5.3	-1.8	-2.3
International services	3.7	4.2	4.5	4.8	5.4
Public sector debt interest	25.3	26.4	22.5	21.5	22.7
Defence	24.1	24.9	24.6	26.1	27.4
Public order and safety	18.3	20.2	22.9	24.7	27.1
Enterprise and economic development	4.6	4.9	5.2	5.9	6.5
Science and technology	1.3	1.3	1.5	1.9	2.1
Employment policies	3.2	3.4	3.4	3.4	3.6
Agriculture, fisheries and forestry	4.4	4.8	6.5	5.0	5.5
Transport	9.0	9.1	11.3	13.6	16.3
Environment protection	6.1	6.4	6.9	7.3	7.7
Housing and community amenities	3.6	4.5	5.4	4.8	6.1
Health	49.6	54.3	59.9	66.3	74.9
Recreation, culture and religion	5.4	5.5	5.4	5.9	5.8
Education and training	42.3	45.8	51.0	55.3	61.1
of which: Education	40.8	44.4	49.7	53.8	59.5
Social protection	122.2	127.7	136.3	144.7	155.0
Total Expenditure on Services⁽²⁾	329.9	350.1	372.6	400.5	437.1
Accounting adjustments	11.4	14.4	15.4	17.9	16.5
Total Managed Expenditure	341.3	364.5	388.0	418.4	453.6

⁽¹⁾ Based on PESA 2004 Table 3.2
⁽²⁾ The definition of Total Expenditure on Services is set out in Appendix F of PESA 2004

Notes to Editors

Background

Budgetary data (Tables 1, 2 and 3)

1. These data are being released in accordance with the National Statistics Code of Practice, and with the Treasury’s statement of compliance with the Code’s protocol on release practices, available on the Treasury website.

2. Presentation of public expenditure in tables 1, 2 and 3 follows the Treasury’s budgeting and control framework, which splits spending into Resource Budgets and Capital Budgets. These Budgets are split into Departmental Expenditure Limits (DEL) and Annually Managed Expenditure (AME). DELs are firm three year spending limits set for departments. Spending that cannot reasonably be subject to firm multi-year limits is included in AME. DEL and AME together make up Total Managed Expenditure (TME), an aggregate that is drawn from the national accounts and is defined in national accounts terms as public sector current expenditure plus net investment plus depreciation.

3. The DEL/AME budgeting framework was introduced in 1998 for the Comprehensive Spending Review, which set spending plans for 1999-2000 to 2001-02. The 2000 Spending Review (SR2000) saw the introduction of resource budgeting, with a transitional resource budgeting regime under which certain non-cash items were in AME rather than in DEL. Planning and control of public spending for 2001-02 and 2002-03 has been under the SR2000 budgeting rules. Final outturn for 2001-02 and 2002-03 on a SR2000 budgeting basis were published in the previous release, alongside the Public Expenditure Outturn White Paper in July 2004.

4. Full resource budgeting was introduced for the 2002 Spending Review, and has operated for planning and control of spending from 2003-04. Spending plans in the 2004 Budget and PBR are on the basis of SR2002 budgeting and the presentation of public expenditure now follows SR2002 budgeting.

Spending by Function (Table 4)

5. Data on public spending by function are published annually in Public Expenditure Statistical Analyses. The spending aggregate allocated by function is Total Expenditure on Services (TES), which is based on Total Managed Expenditure (TME), as far as this can be derived in detail from data held on the PES database. The allocation of function in TES is broadly consistent with the UN Classifications of the Functions of Government. All data are UK, with spending by devolved administrations being allocated by function as appropriate.

Methodology and definitions

6. Treasury statistics on public expenditure are compiled from accounting data that are supplied by central government departments and the devolved administrations, and held on the Treasury’s public expenditure (PES) database. Data on local authority spending are supplied by the Office of the Deputy Prime Minister (for England) and by the devolved administrations. Previously local authority spending data were largely based on budgeting information. The Office of the Deputy Prime Minister has provided emerging findings data to estimate local authority spending in 2003-04. The Office of the Deputy Prime Minister will publish these data in full, as National Statistics, in 2005. The spending aggregate, TME, is supplied by the Office for National Statistics and was last updated on 29th September 2004.

7. There is more information on the budgeting system and the definition of TES in PESA 2004 in Appendices E and F respectively.

A National Statistics publication

8. Most public expenditure outturn data published by H M Treasury are published as National Statistics. National Statistics are the official source for authoritative, accurate and relevant information on the economy and society. For more information about National Statistics visit their website (details below). The release of data in this press notice has followed the National Statistics Code of Practice and Protocol of Release Practices.

Internet version

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