Projects/Where Does My Money Go/Data/Research

= Where Does My Money Go? =

General notes

 * Consolidated Budgeting Guidance

Supplementary Budgetary Information 2009-10

 * http://www.hm-treasury.gov.uk/psr_estimates_sbi09-10.htm
 * Question: Where do categories come from?

Office of National Statistics

 * http://www.hm-treasury.gov.uk/ecpn_natstats_about.htm
 * http://www.statistics.gov.uk/statbase/Product.asp?vlnk=1143&More=N

HM Treasury

 * Statistics on Public Finance and Spending - links to further info
 * http://www.hm-treasury.gov.uk/finexp_index.htm
 * Public Sector Finance Databank
 * http://www.hm-treasury.gov.uk/psf_statistics.htm

Whole of Government Accounts

 * WGA will consolidate the accounts of about 1300 bodies from within the central government, health service, local government and public corporation sectors.
 * HM Treasury: http://www.hm-treasury.gov.uk/psr_government_accounts.htm
 * Old website at:
 * http://web.archive.org/web/20080430044138/http://www.wga.gov.uk/
 * SCOA

Notes from FReM

 * Financial Reporting Manual - HMT
 * http://www.hm-treasury.gov.uk/frem_index.htm
 * "The Financial Reporting Manual is the technical accounting guide that complements guidance on the handling of public funds published separately by the relevant authorities."
 * "The Government FReM applies directly to:
 * all entities (‘reporting entities’), and to funds, flows of income and expenditure and any other accounts (referred to collectively as ‘reportable activities’) that are prepared on an accruals basis and consolidated within Whole of Government Accounts (with the exception of the accounts of any reportable activities that are not covered by an Accounts Direction);
 * but not to Local Government, those Public Corporations that are not Trading Funds, and NHS Trusts and NHS Foundation Trusts. (The NHS Manuals, the NHSFT FReM and the IFRS based Code of Practice on Local Authority Accounting are compliant with this Manual other than for specifically agreed divergences.)" (p.2)
 * "Departments send reports on a budgeting basis to HM Treasury on a regular basis through the Combined Online Information System (COINS). HM Treasury publishes high level and detailed information in publications such as Public Expenditure Statistical Analyses." (p.13)
 * Generally Accepted Accounting Practice (GAAP)
 * 'Taken to be' (?)
 * Companies Act 2006
 * pronouncements by or endorsed by the International Accounting Standards Board (IASB), including the Framework for the Preparation and Presentation of Financial Statements, the accounting standards – international accounting statements (IAS) and international financial reporting standards (IFRS) – and interpretations thereof issued by the Standards Interpretations Committee (SIC) or its successor, the International Financial Reporting Interpretations Committee (IFRIC);
 * [...]
 * Code for Fiscal Stability: (p. 12)
 * a) to borrow only to invest. That is, over the economic cycle the costs of current expenditure will be met by current income (the Golden Rule); and
 * b) to ensure that public sector net debt will be held over the cycle at a stable and prudent level (the Sustainable Investment Rule).
 * National accounts are prepared by the Office for National Statistics in line with internationally agreed rules, which are different from GAAP. That is one of the reasons why transactions might score differently in budgets and in accounts.
 * ONS National Accounts
 * Prepared according to European System of Accounts 1995 (ESA95)
 * http://circa.europa.eu/irc/dsis/nfaccount/info/data/esa95/en/esa95en.htm

Annual timeline

 * Todo: sketch out cycle of financial year
 * It goes something like Budget then PESA and CRA forms sent to departments in December and all forms taken back in Feb and CRA report produced in April(?)

Documents

 * Legislation: Government Resources And Accounts Act 2000
 * http://www.opsi.gov.uk/Acts/acts2000/en/ukpgaen_20000020_en_1
 * http://www.opsi.gov.uk/acts/acts2000/ukpga_20000020_en_1
 * Resource Accounting Manual

Accounting Systems

 * GAAP
 * ONS National Accounts (UK ESA95)

Key Accounting Concepts for our data sets

 * TES
 * http://www.hm-treasury.gov.uk/d/depts_intro_to_tes_20080829.pdf
 * PESA uses an expenditure concept – Total Expenditure on Services (TES) – that is more stable than the budgeting aggregates and that is closer to TME. TES is analysed by function, economic category and territory (country and region).
 * capital charges
 * http://www.dhsspsni.gov.uk/hssf50-2004-part3.pdf
 * capital charges are excluded from TES but included in TME

Glossary
The treasury glossary http://www.hm-treasury.gov.uk/help_accessibility.htm


 * indicates a Key Performance Indicator (KPI)
 * GDP (Gross Domestic Product) (at market prices) is the added value of goods and services produced in a country. Economic data is often quoted compared to GDP to normalise measures, making international comparisons easier and giving an indication of trends over time.
 * *GDP growth, although usually small in percentages, has a significant effect on a country’s economic wealth and, crucially, the health of a government’s finances. For * GDP per capita see ‘Per person’.
 * The Public Sector, often called the ‘state sector’ or confusingly just ‘government’, consists of Central Government, Local Government and Public Corporations. General Government is Central Government and Local Government. Public Corporations are publicly (i.e. government) controlled trading bodies with substantial independence from central and local government and are effectively state owned ‘companies’. To be classed as trading they must receive the majority of their income from sales into a market, rather than grant funding from government.  Public Corporations include nationalised industries such as the Royal Mail and Post Offices, BNFL, London Underground, Scottish Water; central government trading funds such as the Meteorological Office and Ordnance Survey; broadcasters (BBC, Channel 4 and S4C and much more.
 * Fiscal means ‘of or relating to government finances, esp. tax revenues and expenditure’ (from Latin fiscalis concerning the state treasury, from fiscus public money). The UK fiscal year is from April to March.
 * Real terms are amounts adjusted for the effect of inflation.
 * Per person, also described as per capita, shows the measure divided by the total population of the United Kingdom. Because the amounts involved in government finances are so big ‘per capita’ figures are easier to relate to than totals, and allow better comparisons between countries. * GDP per capita is a key indicator to monitor.
 * *Tax-GDP ratio (also called the ‘Tax Burden’) is the ratio of total taxes, including National Insurance contributions, to GDP and is a good indicator of the extent of the government’s involvement in a total country’s economy. Total Government Receipts are usually higher because of other receipts, such as rent, profits, interest etc, which are not taxes or duties.
 * *Public Sector Expenditure is the total spending, both current and capital, on all government activities including: Social Protection (pensions, benefits and support and personal social services), Health, Education, Defence, Public order and Safety, Transport, Environmental services, Housing, Agriculture, Trade and industry, Culture, media and sport, International services and development, Public Sector debt interest.  It does not include expenditure by Public Corporations on their trading activities which is primarily financed by sales, but it does include any subsidies or grants to them.

Note that Public Sector expenditure in the UK in 2008-09 was just over 40 % of GDP. Percentages of total Public Sector expenditure for the 3 biggest categories are given. Over 60 % of UK Public Sector spending is on Social Protection, Health and Education, with Debt interest payments, Defence, Law and order, Transport, Housing and Environmental services, Trade and industry and Agriculture making up another 25 %. 	The ‘Sustainable Investment Rule’ states that UK Public Sector net debt, as a proportion of GDP, will be held at a stable and prudent level (currently less than 40%). General Government gross debt is a different measure of debt reported to the European Union (EU). Unlike the Public Sector net debt above, it excludes the debt of public corporations and measures General Government’s total financial liabilities before netting off short-term financial assets. It is however one of the most internationally comparable measures of ‘government’ debt and is reported internationally and to the EU on a calendar, not UK fiscal, year basis. The UK so called ‘Maastricht debt’ has usually been below the target of less than 60 % of GDP since joining the EU.
 * *Public Sector (financial) balance (surplus or deficit) is the difference between government current receipts and total expenditure. The UK government quotes this figure in a negative sense as Public Sector Net Borrowing (PSNB).
 * *Public Sector net debt, also called the ‘National Debt’, is the sum of all the UK Public Sector’s borrowings, less its liquid financial assets. It is often quoted as a % of GDP for comparison against other countries.  It is one of any government’s key fiscal performance indicators and is used by the UK government for judging its performance against one of its ‘fiscal’ rules:
 * *Investment, also called Capital Expenditure, is expenditure on capital assets, including payments of investment grants, acquisition of land, and net stockbuilding. Capital assets are assets that generally last more than one year (such as land, roads, buildings, vehicles, machinery etc) and can be used repeatedly to provide goods and services.
 * Public Sector Net Investment (PSNI) is gross investment less sales of capital assets and less the value of depreciation on existing assets. Depreciation is an amount representing the reducing value of capital assets each year, also sometimes called capital consumption.
 * Current expenditure is the sum of expenditure on pay, and related staff costs, plus goods, services and transfers (such as benefits), net of receipts from sales. Current expenditure does not include capital expenditure.  Expenditure on equipment that can only be used for single use military purposes, such as missiles, is counted as current expenditure.
 * *Public Sector Surplus on Current Budget is the difference between the public sector’s current receipts (i.e. excluding receipts from sales of public sector assets) and its current expenditure (i.e. excluding capital investment) plus depreciation. Public Sector ‘Surplus on Current Budget’ is a long term indicator and should be monitored over a number of years. It is the UK government’s key fiscal performance indicator for judging its performance against another of its ‘fiscal’ rules:
 * ‘Golden Rule’ states that, “… on average over the economic cycle, the UK government will borrow only to invest and not to fund current expenditure. This means that, over the economic cycle, the Public Sector surplus on current budget must be zero or positive.”
 * Public Sector debt interest shows the amount of interest the ‘government’ pays to cover its borrowings. Most, but not all, is expenditure by Central Government.  Interest as a proportion of government expenditure gives an indication of the impact that interest payments have on other government expenditure priorities. Credit risk ratings are provided by international leading credit agencies, such as Standard and Poor’s, Fitch and Moody’s, for government borrowings, also known as ‘sovereign debt’, reflecting the different level of risk of defaulting on debt capital or interest payments.  Governments with a higher credit rating such as AAA / Aaa will pay a lower rate of interest on any borrowing than a government that has a lower credit rating.

Within the limitations of a one page highlights it is not possible to show long term trends or comparisons with other countries and reference should be made to the full annual report for this information. Figures are current as at Mar 2009.

Total Public Sector Expenditure is called Total Managed Expenditure (TME) by the UK government in its official financial documents.


 * Departmental Expenditure Limits (DEL) and Annually Managed Expenditure (AME)
 * Definitions at: http://www.hm-treasury.gov.uk/spend_plancontrol.htm#Departmental_Expenditure_Limits_and_Annually_Managed_Expenditure

People

 * any references to ‘directors’ and ‘company’ should be read to mean, respectively, the ‘Accounting Officer’ or other person who is required to approve financial statements and the ‘reporting entity or reportable activity’.

Local Spending

 * Sustainable Communities Act 2007
 * A Guide: http://www.communities.gov.uk/publications/localgovernment/sustainablecommunitiesact
 * Consultation: http://www.communities.gov.uk/publications/localgovernment/localspendingreportssors1
 * Local Works lobbied for the legislation: http://www.localworks.org/

NGOs

 * http://www.cfps.org.uk/

International

 * http://www.iasb.org/

Reading List

 * A survey of public spending in the UK - Institute for Fiscal Studies
 * Public Spending - Office of National Statistics
 * Spending Review - HM Treasury
 * Making local public expenditure data public, and the development of Local Spending Reports - Communities and Local Government
 * Public Spending Overview

reading suggested by volunteer:


 * http://www.hm-treasury.gov.uk/d/Budget2009/bud09_chapterc_463.pdf - Chapter C on Public Finances of Financial Statement and Budget Report (FSBR)
 * http://www.hm-treasury.gov.uk/d/psf.pdf Public Sector Finance from the Office of National Statistics
 * http://www.statistics.gov.uk/downloads/theme_economy/BB09.pdf The Blue Book chapter 10 in particular.

Read List

 * http://docs.google.com/viewer?a=v&q=cache:WFi99RNoNi4J:www.nuffield.ox.ac.uk/politics/papers/2004/JRSS%2520final.pdf+TES+total+expenditure+on+services&hl=en&gl=uk&sig=AHIEtbShpCzrDrh0kAoqR3y9pFskQYWjQw - Read by Lisa. A good overview of Blue Book and Pesa -- these are considered the two main accounting methods for UK public spending. The overviews says where the data for Blue Book and Pesa come from and how they are inconsistent through time. There is some backward adjustment when the system changes but it seems it is only for 5 years post the change.

Data Clues

 * Combined Online Information System (COINS), "a web based multi-dimensional database used by HM Treasury to collect financial information". Now deposited in the House of Commons Library.

Classification Codes

 * CIPFA codes:
 * Every council has a CIPFA code (except in Northern Ireland): http://www.cipfa.org.uk/
 * SOCITM
 * LDG ID
 * Mapped to every council
 * Only for England and Wales
 * NUTS ID
 * Gives IDs to regions
 * SNAC ID:
 * Goes down to ward level
 * Nothing in GLA has a SNAC ID
 * New unitary authorities created in April 2009 (and some older ones) don't have SNAC IDs
 * Kent doesn't have them - funny county council
 * http://www.ons.gov.uk/about-statistics/geography/products/geog-products-area/snac/index.html
 * ONS completely new system of IDs starting in January 2011