Week 12, 2012: UK Govt Income and Expenditure

Summary: As the UK Budget was announced this week, we decided to revisit our popular UK government real income and expenditure per capita chart from last year.

What does the chart show? The blue line shows the current central government receipts receivable per capita, in 2011 prices. The red line shows total current expenditure payable by central government, also per capita and in 2011 prices.

Why is the chart interesting? This is an interesting way of looking at government finances because it shows the average amount received from, and spent on, everyone in the UK in real terms, and how that amount has changed. For many years the two rose roughly in line with each other, but in 2008 revenues sharply declined as tax takings decreased in the aftermath of the financial crisis. Expenditure, however, continued to rise as before. Although there was a small increase in both expenditure and revenues in 2011 in nominal terms, in real per capita terms, both fell.