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UK Public Expenditure market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Public Expenditure market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

This Report looks at the following areas:

  • What have been the drivers of public expenditure activity over the past year?
  • One year on, how has the Brexit decision impacted the sector?
  • How will the UK look to change public spending in light of political uncertainty?
  • What does the future of public expenditure look like?

Definitions

For the purposes of this Report, UK public expenditure, which covers the government’s spending on public services, has been segmented into:

  • central government expenditure
  • local government expenditure
  • public corporation expenditure

Each of these can be further segmented into the service function:

  • general public services - defined as executive and legislative organs, financial and fiscal affairs, external affairs, foreign economic aid; general services; basic research; R&D general public services; general public services not elsewhere classified, public debt transactions, and transfers of a general character between different levels of government
  • defence - which includes military defence, civil defence, foreign military aid, and R&D defence
  • public order and safety - which covers police services, fire-protection services, law courts, prisons, R&D public order and safety
  • economic affairs - which includes general economic, commercial and labour affairs, agriculture, forestry, fishing and hunting, fuel and energy, mining, manufacturing and construction, transport, communication, other industries, and R&D economic affairs
  • environment protection - which includes waste management, waste water management, pollution abatement, protection of biodiversity and landscape, and R&D environmental protection
  • housing and community amenities - which covers housing development, community development, water supply, street lighting, and R&D housing and community amenities
  • health - which includes medical products, appliances and equipment, outpatient services, hospital services, public health services, and R&D health
  • recreation, culture and religion - which includes recreational and sporting services, cultural services, broadcasting and publishing services, religious and other community services, and R&D recreation, culture and religion
  • education - which covers pre-primary and primary education, secondary education, post-secondary non-tertiary education, tertiary education, education not definable by level, subsidiary services to education, and R&D education
  • social protection - which is defined as helping those in need or at risk of hardship and includes sickness and disability, old age, survivors, family and children, unemployment, housing, social exclusion and, R&D social protection

Expenditure can be further segmented into:

  • current expenditure on services
  • capital expenditure

For forecasting and planning, Total Managed Expenditure (TME) is segmented into Departmental Expenditure Limits (DEL) and Annually Managed Expenditure (AME). Departments are given firm three-year spending limits, within which they prioritise resources and plan ahead. Spending that cannot reasonably be subject to firm multi-year limits, typically because it is large, potentially volatile and demand-led, is included in AME. Lower levels of AME expenditure release extra spending for public services in DEL.

DEL consists of resource budget for resource consumption and capital budget for new investment, less depreciation. AME mainly consists of departmental AME, such as social security benefits, and various allowances and subsidies.

Years quoted in this Report are government fiscal years, ending in March of the identified year.

Segmentation

  • Social Protection
  • Health
  • Education
  • General public services
  • Economic Affairs
  • Defence
  • Public order & safety

Company Profiles

  • Amey
  • BAE Systems
  • Babcock International Group
  • Balfour Beatty
  • Capita
  • G4S
  • IBM United Kingdom
  • Interserve
  • Rolls Royce
  • Serco
  • Siemens
  • Sodexo
  • Thales UK
  • Wates Group

Expert analysis from a specialist in the field

Written by Marco Amasanti, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

A year on from the Brexit referendum, the primary determinate of public expenditure in the period beyond exit negotiations remains the speculative impact that renegotiated trade deals will have on national income. This uncertainty was compounded by the 2017 general election, which revealed growing weariness from the public around ongoing austerity measures. Marco Amasanti
B2B Analyst

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Table of contents

  1. Executive Summary

      • The market
        • Figure 1: UK total managed expenditure, £ billion, 2012/13 to 2016/17
      • Market segmentation
        • Figure 2: Comparison of public current and capital expenditure, 2012/13-2016/17
        • Figure 3: Segmentation of total managed expenditure, by function, £ billion, 2012/13-2016/17
      • Market factors
        • Population projections
          • Figure 4: UK population projection, by nation, million, 2014-39
        • Working population
          • Figure 5: Composition of UK population projection, million, 2014-19
        • Market forecast
          • Figure 6: UK total managed expenditure, £ billion, 2016/17-2021/22
          • Figure 7: UK public sector receipts and expenditure, % of GDP, 2016/17-2021/22
        • What we think
        • Key Issues

            • Brexit and public expenditure
              • The short term
                • In the longer term
                  • Growing reluctance for austerity
                  • UK Economy

                    • Overview
                      • Figure 8: Forecast GDP development, % change, 2017-21
                      • Figure 9: UK GDP quarterly development, 2004-17
                      • Figure 10: UK GDP in economic downturns and recoveries since 1979
                    • Inflation
                      • Interest rates
                        • Consumer spending
                          • Manufacturing
                            • Figure 11: UK manufacturing, 2014-17
                          • Business investment
                            • Figure 12: UK GFCF, £ million, 2003-17
                          • Imports
                            • Exports
                            • Introduction

                                • Definitions
                                  • Methodology
                                    • Abbreviations
                                      • Market positioning
                                      • Market Factors

                                        • Key points
                                          • Population projections
                                            • Figure 13: UK population projection, by nation, million, 2014-39
                                          • Working population
                                            • Figure 14: Composition of UK population projection, million, 2014-19
                                        • Market Size

                                          • Key points
                                              • Figure 15: Public sector net borrowing, 2000/01-2016/17
                                              • Figure 16: UK total managed expenditure, 2012/13 to 2016/17
                                              • Figure 17: Comparison of public current and capital expenditure, 2012/13-2016/17
                                          • Market Segmentation

                                            • Key points
                                                • Figure 18: Segmentation of total managed expenditure, by function, £ billion, 2016/17
                                                • Figure 19: Segmentation of total managed expenditure, by function, £ billion, 2012/13-2016/17
                                              • General public services
                                                • Figure 20: Total managed expenditure on general public services, by sub-function, £ million, 2012/13-2016/17
                                              • Defence
                                                • Figure 21: Total managed expenditure on defence, by sub-function, £ million 2012/13-2016/17
                                              • Public order and safety
                                                • Figure 22: Total managed expenditure on public order and safety, by sub-function, £ million 2012/13-2016/17
                                              • Economic affairs
                                                • Figure 23: Total managed expenditure on economic affairs, by sub-function, £ million 2012/13-2016/17
                                              • Health
                                                • Figure 24: Total managed expenditure on health, by sub-function, £ million 2012/13-2016/17
                                              • Education
                                                • Figure 25: Total managed expenditure on education, by sub-function, £ million 2012/13 - 2016/17
                                              • Social protection
                                                • Figure 26: Total managed expenditure on social protection, by sub-function, £ million 2012/13-2016/17
                                            • Industry Structure

                                              • Key points
                                                • Industry introduction
                                                • Amey

                                                      • Figure 27: Financial analysis of Amey UK, £ million, 2012-16
                                                    • Recent company activity
                                                      • Company strategy
                                                      • BAE Systems

                                                            • Figure 28: Financial analysis of BAE systems, £ million, 2012-16
                                                          • Recent company activity
                                                          • Babcock International Group

                                                                • Figure 29: Financial analysis of Babcock International Group, £ million, 2012-17
                                                                • Figure 30: Babcock International Group Revenue, by category, 2016
                                                              • Recent company activity
                                                                • Company strategy
                                                                • Balfour Beatty

                                                                      • Figure 31: Financial analysis of Balfour Beatty, £ million, 2012-16
                                                                    • Recent company activity
                                                                      • Company strategy
                                                                      • Capita

                                                                            • Figure 32: Financial analysis of Capita, £ million, 2012-16
                                                                          • Recent company activity
                                                                            • Company strategy
                                                                            • G4S

                                                                                  • Figure 33: Financial analysis of G4S, £ million, 2012-16
                                                                                • Recent company activity
                                                                                  • Company strategy
                                                                                  • IBM United Kingdom

                                                                                        • Figure 34: Financial analysis of IBM UK, £ million, 2012-16
                                                                                      • Recent company activity
                                                                                        • Company strategy
                                                                                        • Interserve

                                                                                              • Figure 35: Financial analysis of Interserve, £ million, 2012-16
                                                                                            • Recent company activity
                                                                                              • Company strategy
                                                                                              • Rolls Royce

                                                                                                    • Figure 36: Financial analysis of Rolls Royce, £ million, 2012-16
                                                                                                  • Recent company activity
                                                                                                    • Company strategy
                                                                                                    • Serco

                                                                                                          • Figure 37: Financial analysis of Serco, £ million, 2012-16
                                                                                                        • Recent company activity
                                                                                                          • Company strategy
                                                                                                          • Siemens

                                                                                                                • Figure 38: Financial analysis of Siemens, £ million, 2012-16
                                                                                                              • Recent company activity
                                                                                                                • Company strategy
                                                                                                                • Sodexo

                                                                                                                    • Figure 39: Financial analysis of Sodexo, £ million, 2012-16
                                                                                                                  • Recent company activity
                                                                                                                    • Company strategy
                                                                                                                    • Thales UK

                                                                                                                        • Figure 40: Financial analysis of Thales UK, £ million, 2011-15
                                                                                                                      • Recent company activity
                                                                                                                        • Company strategy
                                                                                                                        • Wates Group

                                                                                                                              • Figure 41: Financial analysis of Wates Group, £ million, 2012-16
                                                                                                                            • Recent company activity
                                                                                                                              • Company strategy
                                                                                                                              • Market Forecast

                                                                                                                                • Key points
                                                                                                                                  • Spring Budget 2017
                                                                                                                                      • Figure 42: UK total and forecast managed expenditure, £ million, 2012/13 to 2019-20
                                                                                                                                      • Figure 43: UK Forecast public spending, by sector, £ billion, 2017-18
                                                                                                                                      • Figure 44: UK Forecast public sector receipts, by sector, £ billion, 2017-18
                                                                                                                                    • Market segmentation
                                                                                                                                      • Figure 45: UK total managed expenditure, public sector current expenditure and public sector gross investment, £ billion, 2016/17-2021/22
                                                                                                                                    • National deficit
                                                                                                                                      • Figure 46: UK public sector receipts and expenditure, % of GDP, 2016/17-2021/22
                                                                                                                                  • Further Sources and Contacts

                                                                                                                                    • Trade exhibitions
                                                                                                                                      • Community Transport Exhibition
                                                                                                                                        • The Education Show
                                                                                                                                          • International Policing Exhibition
                                                                                                                                            • Social Housing Exhibition
                                                                                                                                              • Trade magazines
                                                                                                                                                • Government Business
                                                                                                                                                  • Government & Public Sector Journal
                                                                                                                                                    • Government Opportunities
                                                                                                                                                      • IRRV Insight Aspect Media
                                                                                                                                                        • Local Government Chronicle
                                                                                                                                                          • Local Government News
                                                                                                                                                            • The MJ Hemming Group Ltd
                                                                                                                                                              • New Start New Start Publishing Ltd
                                                                                                                                                                • Public Guardian Newspapers Ltd
                                                                                                                                                                  • Public Administration & Development
                                                                                                                                                                    • The Chartered Institute of Public Finance & Accountancy
                                                                                                                                                                      • Public Sector Executive Cognitive Publishing Ltd
                                                                                                                                                                        • Public Sector & Local Government
                                                                                                                                                                          • Public Servant PSCA International Ltd
                                                                                                                                                                            • Regeneration & Renewal
                                                                                                                                                                              • Trade associations
                                                                                                                                                                                • Institute for Fiscal Studies
                                                                                                                                                                                  • Office for Budget Responsibility