Box sets » Public finances » Government spending

Chart 3.B: Public sector net borrowing effects of our alternative inflation scenarios
The level and nature of inflation has consequences for the public finances. This box explored the fiscal consequences of the sharp rise in inflation since our March 2021 forecast and examined the fiscal effects of the two scenarios described in Box 2.6 in our October 2021 EFO one where inflation is driven mainly by pressures in the product market, and the other mainly pressures in the labour market. The box concluded the labour market inflation scenario was significantly more beneficial for the public finances.

Economy categories: Inflation

Fiscal categories: Public spending, Receipts

Chart A: Long-term cost estimate of social care funding reforms as a share of GDP and relative to baseline spending
On 7 September 2021, the government announced a reform to the funding of adult social care in England. In this box, we described how this reform compares with the 2011 Dilnot Commission proposals and the reforms from the Care Act 2014 that were planned for April 2016 and then abandoned.

Fiscal categories: Public spending, Departmental spending

Cross-cutting categories: Ageing population, Demographics

Chart 3.E: Indicators of pressures on the NHS
The NHS is the largest single item of public spending in the UK, and has been placed under extraordinary pressure as a result of the pandemic. Historically, some of the largest policy-related revisions have related to health spending, including the £13 billion a year announced at the 2021 Spending Review. This box explores indicators of pressure across the health service and the potential for these pressures to result in risks to our forecast.

Fiscal categories: Public spending, Health

Cross-cutting categories: Coronavirus

Table A.A: Fiscal impacts of policy changes to the student finance system
On 24 February 2022 the Government introduced a raft of changes to the working of the higher education student loans system in England. In this box we: summarised the reforms, explained their impacts on the complex accounting for student loans, and showed the overall impact on the latest forecast.
Chart 3.A: Real value of selected benefit rates following recessions
The real-terms value of benefits was forecast to fall by around 5 per cent in 2022-23 (£12 billion in total) before catching up the year after, largely due to the significant rise in inflation and the lag in benefit uprating. In this box we compared these post-pandemic uprating dynamics to the real value of non-pensioner benefit rates following the previous three recessions. This showed that the forecast trough in the real value of benefits was deeper in the wake of the pandemic than for any of the previous three recessions.
Chart 4.A: Child benefit take-up rates for 0-year-olds
Take-up of child benefit had been declining since 2012-13, but this downwards trend accelerated at the onset of the Covid pandemic in March 2020, which resulted in a steep decline in take-up over the subsequent 18 months. In this box, we considered the main drivers of the child benefit caseload and the effect the pandemic had on each of them. We set out the reasons why the pandemic contributed to lower take-up, and then considered the medium-term impact of the pandemic-driven drop in take-up on our forecast.

Fiscal categories: Welfare spending, Child benefit

Cross-cutting categories: Coronavirus

Chart D: Planned SR21 and implied post-SR21 breakdown of RDEL spending
In November 2022 the government reduced its departmental (DEL) spending assumptions for the final three years of the forecast period. This box discussed the implications of the government's day-to-day and capital spending plans for various departments and public services during and after the 2021 Spending Review.
Chart 3A
In the November 2020 EFO we estimated that policy measures responding to the coronavirus pandemic would add £280 billion to borrowing in 2020-21, with these policies announced across a number of statements beginning alongside the March Budget. This box considered the main statements contributing to this cost and the nature of the support included in these announcements.

Fiscal categories: Public spending

Cross-cutting categories: Coronavirus