Public spending planning and control

Total Managed Expenditure
Departmental Expenditure Limits (DEL) and Annually Managed Expenditure (AME)
Departmental Expenditure Limits (DEL)
Annually Managed Expenditure (AME)
Resource Accounting and Budgeting (RAB)
Administration Budgets
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This page provides background information on the framework for the planning and control of public expenditure in the UK.

Total Managed Expenditure

Total Managed Expenditure (TME) is a measure drawn from national accounts representing the current and capital spending of the public sector. The public sector is made up of central government, local government and public corporations.

Departmental Expenditure Limits (DEL) and Annually Managed Expenditure (AME)

The framework for public expenditure is divided between

Departmental Expenditure Limit (DEL) spending, which is planned and set at Spending Reviews; and
Annually Managed Expenditure (AME), which is more volatile, demand-led expenditure and therefore not subject to multi-year limits in the same way as DEL. AME includes social security benefits, local authority self-financed expenditure, debt interest, and payments to EU institutions.

More information about DEL and AME is set out below.

Departmental Expenditure Limits (DEL)

Departments are set separate resource (current) and capital budgets.

To encourage departments to plan over the medium term, departments may carry forward unspent DEL provision from one year into the next and, subject to the Treasury’s assessment of affordability and the value for money case, may be drawn down in future years. This end-year flexibility also removes any incentive for departments to use up their provision as the year end approaches with less regard to value for money.

There is a small centrally held DEL Reserve. Support from the Reserve is available only for genuinely unforeseeable contingencies which departments cannot be expected to manage within their DEL.

Annually Managed Expenditure (AME)

AME typically consists of programmes which are volatile and demand-led, and which are therefore not subject to firm multi-year limits in the same way as DEL. The biggest single element is social security spending. Other items include tax credits, Local Authority Self Financed Expenditure and spending financed from the proceeds of the National Lottery.

Resource Accounting and Budgeting (RAB)

Resource and Capital Budgets are set in terms of accruals information. Accruals information measures resources as they are consumed rather than when the cash is paid. So for example the Resource Budget includes a charge for depreciation, a measure of the consumption or wearing out of capital assets.

Departments have separate controls on Resource Budget DEL, Administration Budgets (a subset of Resource DEL) and Capital Budget DEL.

Administration Budgets

The amount of their Resource Budget DEL that departments may spend on running themselves (e.g. paying most civil servants’ salaries) is limited by Administration Budgets, which are set in Spending Reviews. Administration Budgets are used to ensure that as much money as practicable is available for front line services and programmes. These budgets also help to drive efficiency improvements in departments’ own activities. Administration Budgets exclude the costs of frontline services delivered directly by departments.

This document was updated on 25 May 2010.