Controlling public spending: the scale of the challenge

Wednesday, 03 June 2009

Synopsis

Government spending is growing far more quickly than in other countries, and faster than in previous recessions. This report finds that the surge in spending is not being driven by the recession.

At most, 6% of the increased spending is going on public works, and just over a third is due to the rising cost of social security or debt. Instead of “investment”, most of the increase is due to a decision to spend more on consumption.

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    Government spending is growing far more quickly than in other countries, and faster than in previous recessions. Policy Exchange's Economics Unit finds that the surge in spending is not being driven by the recession. At most, 6% of the increased spending is going on public works, and just over a third is due to the rising cost of social security or debt. Instead of “investment”, most of the increase is due to a decision to spend more on consumption.

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