The distribution of public service spending

In 2019­–20, a total of £509 billion (that is, 22.5% of GDP or £7,600 per person) was spent on providing public services and infrastructure by the various tiers of government in the UK. Unlike spending on cash benefits, the primary aim of this spending is not a general redistribution of resources among households. But spending on this scale does have big direct distributional effects – even before considering impacts of the services themselves on other dimensions of inequality, such as in educational, health and labour market outcomes.

While less studied than the distributional effects of the tax and cash benefit systems, there has been a long tradition of analysis of how public service spending is distributed across the population in the UK. This commentary has three main aims. First, to explain the key conceptual and methodological issues involved in such analysis. Second, to set out what we know about the distribution of spending on major public services, and how and why this changed over time. And third, to identify key lessons for policy and avenues for future research.