Government Expenditure in the United Kingdom, 2021
The United Kingdom is one of the leading economies in the world. The government expenditure in the United Kingdom was $1.2 trillion in 2021. Between 2018 and 2021, the government expenditure was highest in 2021 at $1.2 trillion and lowest in 2020 at $1.1 trillion. The government expenditure increased by 8.4% on a YoY basis in 2021 and increased by 2.7% between 2018 and 2021.
Government Expenditure
Government expenditure refers to the general government sector, which is a consolidation of accounts for the central, state and local governments plus social security. Total outlays are defined as current outlays plus capital outlays.
The government spending is the total amount of public sector expenditure at any level, including central government, local government etc. It is split into the following segments: defense, education, social protection, healthcare, and other.
United Kingdom Government Spending Reforms Post 2021
In October 2021, the UK government declared its taxation and spending plans for next year. The Spending Review of 2021 covers the budget and the government spending from 2022–23 to 2024–25. The government announced proposals with respect to increasing the National Living Wage and minimum wage for UK workers. These changes take effect from April 1, 2022. Some of the main reforms include:
- The national minimum wage will increase from GBP8.36 ($11.62) to GBP9.18 ($12.76) for individuals aged between 21 to 22 years.
- The national living wage will increase from GBP8.91 ($12.38) to GBP9.50 ($13.20) an hour.
- A 50% business rates discount for the retail, hospitality and leisure sectors in England in 2022–23.
- Funding will increase by an average of GBP4.6 billion ($6.39 billion) for the Scottish government, GBP2.5 billion ($3.47 billion) for the Welsh government and GBP1.6 billion ($2.22 billion) for Northern Ireland Executive.
- Tax relief for museums and galleries to be extended up to March 2024.
- The core science funding to rise by GBP5.9 billion ($8.20 billion) a year by 2024–25.
- GBP7 billion ($9.73 billion) for transport projects in areas including Greater Manchester, the West Midlands, and South Yorkshire.
- Introducing a new tax charge of 4% on the profits made by the largest property developers on their UK residential property activities.
- The government plans to invest GBP12 billion ($16.68 billion) on roads and GBP46 billion ($63.93 billion) on railways.
- The government also aims to invest GBP20 billion ($27.79 billion) in research and development by 2024–25.
- An investment of GBP11.5 billion ($15.98 billion) in the Affordable Homes Programme in England in 2021–26 to help building up to 180,000 new affordable homes.
- An investment of GBP302 million ($419.68 million) to fund new programs which include supporting parents, parent-infant mental support and the rollout of family hubs across England.
- An investment of GBP90 million ($125.07 million) for the extension of the Job Entry Targeted Support Scheme until the end of September 2022. The scheme mainly aims to help individuals who have been unemployed for a period between three and 12 months.
- The government aims to allocate an additional GBP1.9 billion ($2.64 billion) resource funding towards the UK’s criminal justice system to manage the increased number of criminals being brought to justice and to reduce backlogs that were caused due to the outbreak of the Covid-19 pandemic.
- The government aims to double the number of available scholarships for Artificial Intelligence and Data Science Master’s conversion courses. For this purpose, the government plans to invest GBP23 million ($31.96 million) for under-represented groups.
- An investment of GBP1.4 billion ($1.95 billion) towards the Global Britain Investment Fund, with an aim to ensure that economic opportunities are spread evenly across the UK.
- An additional funding of GBP458 million ($636.47 million) by 2024–25 towards asylum and refugee support and protecting vulnerable individuals in the UK’s asylum system.
- Reducing the bank surcharge in corporation tax from the current 8% to 3%, beginning April 1, 2023.