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Understanding UK government budget

 Please help me understand the UK government budget. HM Treasury provides lot of data but it don't understand it. (http://www.hm-treasury.gov.uk/spend_sr2010_documents.htm)

Question 1.
HM Treasury (HMT) says the Total government expenditure is £697b. Where the money goes from HMT? Is there any finite list of institutions that get money directly from the government budget?

Question 2.
What is Annually Managed Expenditures (AME) and what is Departmental Expenditure Limits (DEL)?
If I want to know how much money was spent on let's say Home Office, should I look on AME or DEL or both?

Thanks.

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02nd Jan 2011 22:26

Big subject

Q1. No, there is no finite list of ultimate recipients as the government gives money to individuals (think pensions, benefits, or when it pays civil servants), companies (when it buys goods & services) and international bodies (such as the EU, UN)

If you want to trace the spend, then it's probably easiest to start with the various government departments and take it from there. There is a handy graphic for the 2009-10 year here: http://www.guardian.co.uk/news/datablog/2010/oct/18/government-spending-.... If you want the nuts & bolts have a look at data.gov.uk; the home office invoices are here : http://data.gov.uk/dataset/financial-transactions-data-ho

 

Q2. DEL is 'controlled' expenditure, i.e. what departments decide to spend. AME is 'managed' expenditure (such as benefits & pensions), where there is no limit to the expenditure except the rules for entitlement (for instance, no one was ever refused their pension becuase the budget had been used up). But the boundary between the two is complicated to say the least

Hope this helps

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03rd Jan 2011 09:56

Oh what fun I used to have

as a mil man dealing with civil servants on finance.  It seemed to be made more and more complicated each year for the sake of it so that were only a few in any organisation who truly understood the system.  You had to be able to throw around in conversation Direct RDEL, Indirect RDEL, Capital DEL, AME, cash, near cash, non cash, public funds, non-public funds and various categories of income generation which I have forgotten.  And although the DELs were how you were managed, Parliament still votes cash rather than DEL.  I googled 'rdel cdel ame' and the second link that explains the basics was this one:

http://www.dasa.mod.uk/modintranet/UKDS/UKDS2010/c1/rab.php

Regards
Bruce

 

Edited to add I left only just over a year ago and I see from the reference I gave that more complexity has been added: CDEL is now split into Fiscal CDEL and SUME CDEL - have fun.

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By dandare
03rd Jan 2011 13:47

Understanding UK government budget

 

Hi WhichTyler, thanks for your help,

in Q1 I meant a list of recipients that get money directly from government budget. Will those be all the ministerial departments? Then what about non-ministerial departments, do they get money directly from the budget or from ministerial departments? (http://en.wikipedia.org/wiki/Departments_of_the_United_Kingdom_Government)

The Guardian graphic is awesome, that is exactly what I need - except I have to learn how they made it :).

The data.gov.uk is great source but I am trying to understand the bigger picture first.

 

Q2

Thanks for the example, now I understand it much better. If I get it right: even if pensions are managed by DfW&P they are not part of their DEL, right?

 

Thanks!

 

 

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04th Jan 2011 14:12

Good luck

Q1 The main supply estimates are here http://www.hm-treasury.gov.uk/main_supply_estimates_2010_11.htm

These are the 'requests for resources' from public bodies. Once you've gone through these, there are the supplementary estimates for in year variations.

Q2 Thats about it.

 

 

 

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By dandare
04th Jan 2011 17:52

Understanding UK government budget

Hi WhichTyler, Bruce

could you please help me understand more of it?

Unfortunately I will be talking about data and there is no way how to paste them here so I will ask you to open the HM Treasury documents. 

Let's take Ministry of Justice as an example:

http://www.hm-treasury.gov.uk/d/moj_main_supply_estimates_june10.pdf

On the very second page (labelled as 266) there is nice table that shows some numbers.

Q1:

Which of the numbers show how much money they actually get from the government budget (the £697b)?

Q2:

What are the other numbers? what is Request for Resources?

Q3

And how do I compare that to the HM Treasury Spending review PDF, page 10, that says Ministry of Justice will get £8.3b for 2010-2011? 

 

I am confused more and more :(.

 

Again many thanks for your help.

 

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04th Jan 2011 20:38

The truth is out there...

. Q1. The bottom number £48.8bn is the amount of cash they thought they would need from the government accounts to run the department. Most of it (RfR2&3) is for devolved administrations (Scotland & Wales) which are coveres separately in the Guardian graphic, leaving £8.7bn (RFR1) for the MoJ.

Q2. RfR is a bid for cash to spend.

 

Q3. the £8.3bn in the CSR document (from Oct 2010) is the Resource DEL figure (broadly running costs exc. depreciation)

This compares (I think)  to the figure for 'Resource Budget (Budget) of which DEL' of £8.9bn on p12 of the supply estimates.

Note that the supply estimates are from June so predate the CSR cuts.

Is there a specific question you are trying to answer here, or just trying to get a general understanding?

The Guardian article and data that support the graphic are a good starting point

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By dandare
05th Jan 2011 17:38

Understanding UK government budget

Hi WhichTyler,

I am trying to understand the system as a whole, namely how to track money from the government budget to subordinate institutions and from the further to subordinate institutions. And I am desperate because what HM treasury provides looks like deliberately obfuscated.

I need a simple table showing how much money there is and where they went, am I being naive?

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05th Jan 2011 22:24

roughly the same

It looks like the 2 documents roughly agree.

RfR1 probably includes capital and revenue expenditure totalling £8.708m.

In the SR doc, add the £8.3m RDEL to £0.6m CDEL and that gives £8.9, not far from £8.7!

Note that the cash requirement is different from the resource requirement because of the effects of pre-payments and accruals.  Votes from Parliament I believe are still done on a cash basis, but the Treasury controls the Departments on a resource basis.

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05th Jan 2011 22:41

Try this...

Here's the 2009-10 figures in summary form: http://www.hm-treasury.gov.uk/d/peowp200910.pdf

Remember to add the AME figure (£278bn on p23) to the Resource Del (£342bn) and the Capital Del (£57bn) to get the total you are looking for. Or look at the Guardian site again as they've already done the hard work. Or here  http://wheredoesmymoneygo.org/dashboard/#year=2009&focus=TOTAL&view=uk-b... for a nifty view (but only up to 2009).

You may be interested to know that Whole of Government Accounts (produced to a version of IFRS & audited) are due to be published for the first time 'before the budget' (i.e. Feb/Mar)

Otherwise i suggest ploughing through the sr2010 you linked to originally and the white paper above with a damp towel over your head.

You say that you 'need' to do this; are you Geoge Osborne by any chance?

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