How to understand public sector spending

This guide explains how government spending is broken down, and the Treasury’s role in controlling spending.


Public sector spending, also referred to as government spending or public expenditure, refers to the money that the government spends. It can be spent on a range of different things – from central and local government, to public sector pensions and welfare.

Government expenditure can be broken down and understood in different ways. This guide outlines the basics behind the breakdown of public spending, and explains some of the terms that you may have heard used to describe different areas of the government’s budget.