Market Sector

Total Managed Government Expenditure (TMGE) for 2008-09 was £623 billion, compared with £589 billion in 2007-08 and £555 billion in 2006-07. TMGE is planned to increase to £654 billion in 2009-10 and £682 billion in 2010-11.

The 2009 Pre-Budget Report confirmed that the Government will maintain its planned levels of overall departmental spending in 2010-11, in order to support the economy through the downturn. However, from 2011-12 onwards spending growth will be reduced in order to halve the public sector deficit over the next four years. However, spending on frontline services such as health, education and policing is set to be ring-fenced.

The 2009 Pre-Budget Report also announced new efficiencies and reforms across the public sector, with savings to be generated from initiatives such as a transition to online services, better management of government assets and increased levels of collaborative procurement.

The Pre-Budget Report also announced the establishment of Infrastructure UK (IUK). IUK will be responsible for advising Government on long-term national infrastructure priorities including how it supports a transition to low carbon economy. IUK will help prioritise Government's investment in infrastructure, identify and address major cross-cutting issues affecting UK infrastructure, and improve the way Government supports the delivery of infrastructure projects and programmes. IUK will develop a strategy for national infrastructure by Budget 2010 that will provide a long-term vision for national infrastructure.

Major areas of TMGE within the 2008-09 figure include:

• Defence – £36 billion
• Education – £83 billion
• Health – £111 billion
• Housing and environment – £24 billion
• Industry, agriculture, employment and training - £19 billion
• Personal social services – £27 billion
• Public order and safety – £33 billion
• Social protection – £173 billion
• Transport – £21 billion

The 2009 Pre-Budget Report made assumptions for spending growth from 2011-12 to 2014-15, with current spending growing by an average of 0.8% per year in real terms, and public sector net investment moving to 1.25% of GDP by 2014/15.

• Government spending on the direct delivery of quality services to the public is increasing.
• There is a drive towards larger contracts, the appointment of prime contractors and toward the opening up of sub-contractor opportunities to smaller businesses.
• As collaborative procurement and framework contracts increase in usage, so the need for market intelligence about buyer and supplier activities is increasing
• The Freedom of Information Act is driving the need for the public sector to be seen to have open and auditable tendering processes.
• The European Court of Justice has ruled that all public contracts, no matter what value, should receive appropriate advertising.
• The UK Government and European Commission view the process of opening up public tendering opportunities to more small and medium-sized enterprises (SMEs) as a key policy.
• The Government's aim is to deliver world-class public services through sustained investment and ongoing reform.

The Government launched its Comprehensive Spending Review 2007 (CSR07) in 2005. The Review provides a long-term and fundamental review of government expenditure and covers departmental allocations for 2008-09, 2009-10 and 2010-11.

The Review states that a modern and responsive health service, high-quality education and training, effective, intelligence-led policE and security services and a fast and reliable transport network provide the essential foundations for a society in which economic prosperity is underpinned by fairness, safety and social justice.

The Government took forward a programme of preparatory work over 2006, including:

• An assessment of what the sustained increases in spending and reforms to public service delivery have achieved since the first CSR. The assessment will inform the setting of new objectives for the decade ahead.
• An examination of the key long-term trends and challenges that will shape the next decade – including demographic and socio-economic change, globalisation, climate and environmental change, global insecurity and technological change – together with an assessment of how public services will need to respond.
• An assessment of the resources needed to address these challenges, and to continue to secure maximum value for money from public spending over the CSR period.
• A set of zero-based reviews of departments' baseline expenditure to assess their effectiveness in delivering the Government's long-term objectives.
• Further development of the efficiency programme, building on the cross-cutting areas identified in the Gershon Review, to embed and extend ongoing efficiency savings into departmental expenditure planning.

Defence

Education

Health

Other