Http:// Copyright 2007 – Biz/ed Public Sector Spending.

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Copyright 2007 – Biz/ed

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:



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




Data Source: HM Treasury Public Sector Finances Databank




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

Most items of defence spending do not come cheap.

Copyright: Stock.Xchng



Total Managed Expenditure (TME)



Total Managed Expenditure

• The Government’s preferred measure of public spending

• Derived from National Accounts• Meets international guidelines



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

government activities



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



Financial Transactions



Components of TME

• Financial Transactions:• Financial transactions carried out

by the government – e.g. buying shares, lending money to business and other countries, etc.

Http:// Copyright 2007 – Biz/ed Public Sector Spending.

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