Chapter 13 - The Growth of Public Expenditure in the United Kingdom, 1960–86

Abstract

In the context of the United Kingdom, at least three definitions of public expenditure may be distinguished: (1) public expenditure as a planning total, (2) general government expenditure as defined in the National Income Accounts (NIA), and (3) supply expenditure as defined in the Exchequer Accounts. This chapter discusses the more familiar concepts of general government expenditure and the public expenditure planning total. It provides an overview of the growth of public expenditure in the UK over the period 1960–86, and reviews the rates of growth of the various components of expenditure and the contribution of demographic, social, economic, and political factors to such growth. It also presents the trends in UK public expenditure growth, both by aggregate and by function and category, and reviews the various explanations of such trends and some econometric evidence for such explanations. It presents an explanation for the growth of government that is comparatively neglected in the literature, namely, the failure of governmental organizations to control public expenditure. The chapter presents an argument that, to a large extent, this growth of expenditure was the result of government policy responding to social, demographic, economic, and political factors.