Wednesday, 3 December 2008

Government expenditure - just how bad is it?

In yesterday's posts looking at UK government expenditure, one of my regular readers - young mark - had a request. He wanted me to post a chart looking at total government expenditure as a percent of GDP. He thought that simply looking at the nominal growth of expenditure was misleading.

I was happy to oblige. Here is the chart - total managed government expenditure expressed in terms of GDP. I chose to start the data from the 1999-2000 fiscal year. When New Labour were elected in mid 1997, they promised to keep to the previous government's expenditure plans for at least two years. Therefore, this chart begins when New Labour started to develop their own expenditure plans.

The chart tells a very stark story. Back in 2000, the public expenditure to GDP rate was 36 percent of GDP. This year, it will hit 42.6 percent. Next year and the year after, it will rise to 44 percent. So by the time, the Brownite dictatorship will fall, the share of the public sector in the economy will have grown by about 8 percentage points.

Here is the rest of young mark's comment:

"You may also like to consider that the Government was elected three times on a clear mandate of raising public expenditure in order to improve public services. In other words, the public got what was on the tin.

I notice a number of posters have claimed that the increased expenditure was entirely wasted. Where is the evidence for this? The Wanless report into increased NHS funding certainly did not draw this conclusion."

The boy has a fair point here. We asked for it, and we got it. We voted for big government and Brown delivered.

However, what about young mark's last challenge. Is there any evidence out there that public expenditure increased waste? So come boyzzz, give me your worst examples of Brown's blow blowout binge of useless spending.

I will start the ball rolling with my favourite - the millenium dome.


CityUnslicker said...

er..we have fallen consistently down OECD educashion tables for 10 years. Expenditure was doubled.

trains receive more subsidies now than before privatisation, in real terms. no new commuter lines have been built.

public sector productivity has declined annually for many of those years, even under the govt's own twisted models. That alone points to wasted expenditure.

umm, we now own lots of banks, rather unnecessary that wasn't it.

the potato council

5 a day counsellors

NHS it project that has delivered nothing that works

farm payments system that got a £330 million Eu fine, plus the costs of building it.


powerman said...

The Millenium Dome was conceived under the Tories IIRC.

As for evidence of waste, here's a random sample of postings in the Guardian jobs section:-

"A leading London PCT needs to recruit an exceptional communications specialist to manage and deliver the communications around a high profile community campaign.

Supported by a team you will be tasked with the delivery of targeted and regularly changing communications to a range of audiences. You will need to have proven experience of influencing and managing stakeholders on an internal/external and community basis, delivering multi-layered and complex messages in line with the overall strategy.

As the project is delivered you will need to be able to manage the delivery of key messages through a range of channels. You will need to ensure that all time-lines are maintained and key milestones met throughout the project delivery.

It is essential that you are able to work effectively within a political environment, managing stakeholders in a diplomatic and tactful manner steering toward the delivery of a highly targeted and focused community marketing communications campaign."

"Here at Rotherham Council we are committed to delivering the Governments Empowerment Agenda, and now were looking for someone equally as enthusiastic to step into this new role and make a real impression. Acting as the single point of contact and support for tenants and residents groups, you will be our lead officer supporting, advising and guiding tenants and residents who want to take ownership of managing their own homes.

This is a varied no two days the same role which could see you developing policies and writing reports one day, organising events and putting together training packages the next. Its all about promoting the opportunities of Tenant Management Organisations (TMO) and advising on and monitoring activities to ensure that agreed standards are met. So youll be a fantastic communicator able to build solid relationships as well as a professional who has a genuine passion for tenant empowerment.

Part of your role will be to provide co-ordinated and appropriate training to tenants and residents pursuing the Right to Manage, and youll also ensure that all consultation, participation and ballot processes meet legislative requirements. On a wider footing, youll be highly involved in developing the Councils strategic intentions and policies regarding TMOs and helping to brainstorm any other initiatives in this field.

With solid experience of working in the social housing sector, you will have gained some expertise working with tenant and resident groups and will be an expert project manager. Ideally with a relevant professional qualification, you will have a good working knowledge of TMOs and the legislative environment in which they operate. Your strong organisational ability will see you setting and monitoring action plans and prioritising workloads. Above all you will bring a genuine commitment to this role with plenty of new ideas and initiatives.

In return we offer flexible working hours, excellent training and development opportunities and entry to the Local Government Pension Scheme.

Seriously, anybody who doubts that there is waste just needs to browse the Guardian Job ads for a bit.

People always make two mistakes left-leaning governments these days

1) Somebody richer than them will be paying the bill.

2) They forget that it's all going to be overseen by former academics and lawyers, so they end up with lots of the money being spent on 'diversity' this and 'communications' that, rather than, er.. cleaning hospitals up better and trimming down paperwork.

Anonymous said...

Ten years of Labour, and within three to five years there will be insufficient generating capacity to power the UK. Expect rolling power cuts.

Windmills? Don't be silly.

Did we ever get an 'integrated transport policy'? Wasn't that fatty Prescotts baby?

Opps, Ah yes, he was too busy trying to make his own .. horrible thought.

Two totally avoidable F&M outbreaks, wrecking horrendous damage on the UK farming sector,

The government completely screwed up the farm subsidy payments. God just think, if you have to wait for your bloody housing interest relief, it'll probably take three years to get the first 6months due.

That'll do for now.

Anonymous said...

cityunslicker: nice. But don't stop there!

"You may also like to consider that the Government was elected three times on a clear mandate of raising public expenditure in order to improve public services. In other words, the public got what was on the tin"

Well the complaint is that we got the increase in expenditure, but not the improvements in services. That is half marks at best.

More importantly we got lots of things that were not on the tin, most crucially the vandalism of the unwritten constitution and the undermining of the rule of law.

Anonymous said...

Perhaps topical, but didn't we get a 'wistleblowers charter' at some point?

Mark Wadsworth said...

As I posted a while ago, there are 300,000 more teachers, nurses, coppers (and IMHO worse education, worse NHS and more crime) than ten years ago, fine, but there are also one and a half million more quangocrats.

Remembering that there were a million too many quangocrats when the Tories left office, that's a lot of waste.

Nick von Mises said...

Try "Squandered". I think David Craig wrote it.

Anonymous said...

That Rotherham ad is pure wafflespeak for what used to be called a housing manager (or maybe a caretaker). I wish I could write like that! Whole paragraphs which say absolutely nothing. Brilliant.

Anonymous said...

Just look at the NHS: it is rife with waste and corruption. From a personal level, I now can't get any proper check-ups with my GP, and the local surgery has been re-organised three times and the doctor still can't work the computer system. I no longer have any NHS dentist. A visit to the surgery is now a room full of pregnant migrants.

Nick von Mises said...

I'm trying to source antibiotics off-presecription to fill out my own self-administer home hospital.

I'm not quite at the stage of being my own dentist but I do worry where the NHS is going and wouldn't offer myself up to their treatment any more than I'd run through Iran wrapped in a US flag

Anonymous said...


Many thanks for the chart, which puts your figures into context. Allow me to add a little more. TME rises because the Government deliberately chooses to increase expenditure (1999-2007), or because a recession forces expenditure to rise (2007 onwards).

In the first case, I raised the issue of the Wanless report because I consider it to be genuine evidence. I thought it might forestall a multitude of comments of the "my granny can't get to see doctor on Wednesday" variety. I clearly overestimated your readership.

On the second point you need to compare current TME with what happened during previous recessions. In 1982/3 it peaked at over 48% and in 1992/3 at over 44%.

Young Mark

Elby the Beserk said...


John Pickworth said...

One of Labour's big excuses for the huge bonfires of cash are the fabulous new hospitals and schools... things, which in fairness, people did ask/vote for (I don't include myself though).

However, I'm told that much of this capital spending has been paid for with borrowed/PFI money. In effect, Government has been operating like a modern day super charity. Witness the good causes but try not to notice that 90% of the cash is actually spent on paper-pushing, posh offices, salaries and overly generous expenses for the Directors. In short, we've been robbed.