The Treasury manages public spending within two ‘control totals’ of about equal size:
- departmental expenditure limits (DELs) – mostly covering spending on public services, grants and administration (collectively termed ‘resource’ spending) and investment (‘capital’ spending). These are items that can be planned over extended periods.
- annually managed expenditure (AME) – categories of spending less amenable to multi-year planning, such as social security spending and debt interest.
National Lottery spending as recorded in the National Accounts reflects money spent from the National Lottery Distribution Fund (NLDF) – a fund for good causes, overseen (but not controlled) by the secretary of state for Culture, Media and Sport – and is included within AME. Money for the NLDF is raised via a transfer from the National Lottery operator. As such, public sector receipts are boosted by the precise amount of the transfer, which we then assume is spent in its entirety, meaning the NLDF is neutral for borrowing in our forecast. These receipts are separate to ‘Lottery duty’, which is a duty on taking a chance or ticket in a lottery promoted in the UK. All lawful lotteries are exempt from the duty, except the National Lottery.
In our latest forecast, we expect total NLDF good cause income and expenditure in 2017-18 to amount to £1.7 billion (with £1.2 billion of current spending and £0.5 billion of capital spending). That would represent 0.2 per cent of total public spending, and is equivalent to £60 per household and 0.1 per cent of national income.