Government Spending

Government spending is controlled by the Treasury, which must account for all expenditure by departments.

Treasury Ministers and officials must approve all policies that would require expenditure and, as such, play a role in the formulation and implementation of all substantive government policy.

The majority of spending by departments is agreed in negotiations between the Treasury (normally the Chief Secretary) and individual Secretaries of State on a two-yearly basis. This is called the Comprehensive Spending Review (CSR), the outcome of which is published in July of each CSR year (normally years ending in an even number).

The Comprehensive Spending Review sets a Departmental Expenditure Limit for each department, traditionally over three year periods. In contrast to previous years and as a consequence of the COVID-19 pandemic, it was announced that the Comprehensive Spending Review would cover a one-year period from April 2021 to March 2022.

Other government expenditure, normally on more variable areas such as welfare, is called Annually Managed Expenditure. It is announced each year in the Budget (usually on a Wednesday in March or April) and may be reviewed or altered in the November Pre-Budget Report.

Parliament, which is the sole body that can authorise taxation, keeps a rein on the use of public resources via the National Audit Office. The National Audit can investigate the spending of taxpayers’ money and reports directly to Parliament. Ministers and officials may then be required to account for their actions and decisions before the Commons Public Accounts Select Committee.