The Political Implications of Redefining Public Expenditure in the United Kingdom

Abstract

This article examines the role, significance and consequences of decisions in the United Kingdom about the definition of public expenditure for planning and control purposes. Three major definitional issues are examined: the narrowing in 1977 of the UK public expenditure definition from a public-sector-wide definition to something much closer to the OECD's ‘general government’ definition; the treatment of the proceeds of asset sales as negative expenditure; and the introduction in the 1990 white paper of a planning total excluding local government expenditure. Three sets of consequences are examined: the eroding commitment to comprehensive coverage; the resulting policy distortions; and the erosion of conventions traditionally governing the relationships between central and local government. Grounds for unease with present developments are identified, notably the fragmentation of public expenditure documentation and the loss of information, the consequences of which will unfold as public expenditure faces a difficult period because of problems of macro-economic imbalance.