The budgeting framework deals with spending within central government departmental budgets, which is how the Government plan and control public spending.
Budgets comprise departments’ own spending as well as support to local government and public corporations.
A clear distinction is made between current and capital spending, with departments having separate resource and capital budgets:
- Resource budget - resource budgets relate to spending on items that are consumed in the process of providing public services, i.e. recurring spending.
This includes wages and salaries, benefits, and purchasing goods and services.
- Capital budget - this is expenditure on fixed capital assets, capital grants and the acquisition of certain financial assets. Capital budgets are set net of the value of receipts from the sale of capital assets.
These resource and capital budgets are then sub-divided as follows:
- Departmental Expenditure Limit - for part of their resource and capital budgets, departments are given firm three year spending limits called Departmental Expenditure Limits (DELs) within which they prioritise resources and plan ahead.
- Of which: administration budget - administration budgets are set for most civil service departments. These budgets help to drive economy and efficiency in the running of government itself.
Around 60% of administration costs are accounted for by civil service pay. A further 35% is accounted for by procurement of goods and services (e.g. accommodation, equipment, travel).
- Annually Managed Expenditure - spending that cannot reasonably be subject to firm multi-year limits is included in Annually Managed Expenditure (AME).
The main elements of departmental AME are social security, tax credits and net public service pensions.
Outside departments' budgets, other (or non-departmental) AME consists of net expenditure transfers to the EC, locally financed expenditure, debt interest, public corporations’ own-financed capital expenditure, and accounting adjustments.
DEL and AME together make up Total Managed Expenditure (TME), an aggregate of total public spending that is drawn from the National Accounts.
It is defined, in National Accounts terms, as public sector current expenditure plus public sector net investment plus depreciation.
The latest budgeting data are published annually in chapter 1 of PESA. Chapter 3 sets out changes in budgets from the previous PESA.
Back to top