UK Public Spending
in Recent Decades
Public spending has been getting bigger in recent years.
Spending Steadily Increasing
Public spending in the United Kingdom has steadily increased from over £200 billion in 1990
to over £800 billion today.
Chart 2.11:
Recent Public Spending
Chart 2.12:
Recent Public Spending as Pct GDP
UK public spending hit £200 billion in 1990 and £284 billion by
1995. Increases in public spending were modest in the late 1990s, reaching £338 billion in 2000. The early 2000s showed an acceleration in spending, breaching £500 billion in 2006. Then the financial crisis of 2008 took over,
boosting public spending over £600 billion in 2009. Increases in public spending have moderated
in the 2010s, but spending breached £1 trillion in the COVID year of 2021.
Viewed as percent of GDP, UK public spending shows a significant increase in the early 1990s, reaching almost percent of GDP in 1993. A decline in spending took place in the late 1990s, declining to 34.6 percent of GDP by 2000. A modest increase in public spending
started in the early 2000s, reaching 39 percent of GDP in 2007. Then the financial crisis of 2008 took over and boosted
public spending to 45.47 percent of GDP in 2010. Public spending steadied at about 40 percent GDP in the late 2010s,
before exceeding 50 percent GDP in the COVID year of 2021.
Defence Spending since 1985
Defence spending in the United Kingdom is on a steady decline.
Chart 2.13:
Recent Defence Spending
Defence in 1990 stood at about 4 percent of GDP at the end of the Cold War, and started
a decline in 1993 that took
it down to a low of 2.77 percent of GDP in 1998. In the 2000s defence spending bumped along between
2.5 and 3.0 percent of GDP.
In the 2010s defence spending has slowly declined as a percent of GDP.
Recent State Education Spending
Public spending on education has fluctuated between 4 and 6 percent of GDP.
Chart 2.14:
Recent Education Spending
State spending on education in Britain stood at 4.2 percent
of GDP by 1990. Then it grew to 5.0 perent of GDP in 1993 before declining to 4.37 percent in 2000.
The 2000s saw an increase in state education that hit 5.25 perent of GDP in 2006. In the crisis of 2008
education jerked up to 6 percent of GDP in 2010 before starting a decline, expected to hit 4 percent of GDP
by 2020.
Recent UK Health Expenditures
Public spending for health services increased steadily
Chart 2.15:
Recent Health Spending
In 1990 public spending on health care stood at 4.2 percent of GDP.
Then an increase began that took health care spending over 5.5 percent of GDP by 1993, before declining
year on year to 5.2 percent by 1998. Beginning in 1999 the Blair government began a sustained increase in health care spending that reached 7.13 percent of GDP by 2008. Then health expenditure jumped to 8 percent of GDP in the aftermath of the financial crisis of 2008. Planned spending for the late 2010s shows a modest decline to 7 percent of GDP by in the late 2010s before exploring over to over 10 percent GDP in the COVID year of 2021.
Fluctuating Growth in Social Spending
Public spending for “Social Protection” stood at 11 percent of GDP in 1990 and peaked at
over 15 percent of GDP in the Great Recession.
Chart 2.16:
Recent Social Spending
Welfare, including unemployment, social security, incapacity and housing allowances, was 6.4 percent of GDP in 1990,
but then increased to 8.55 percent GDP in the aftermath of the 1990-92 recession.
Following 1993, welfare started a decline, reaching down to a low of
5.5 percent of GDP in 2002. In the financial crisis of 2008 it increased, reaching 7.38 perent of GDP in 2010.
Welfare was declining to 5 percent of GDP in the late 2010s before bumping up to over 6 percent GDP in the COVID year of 2021.
In 1990 pensions came in at 4.2 percent of GDP and then began a steady increase, hitting 5 percent GDP
in 1993, 6 percent in 1998, peaking at 7.28 perent of GDP in 2002. In the mid 2000s pensions modestly declined down
to 6.68 percent of GDP in 2007. But the financial crisis boosted pension costs up to 8 percent of GDP in 2012
and 8.25 percent of GDP for 2016 but bumped up in the COVID year of 2021.
