https://cpes.org.uk/om/files/original/2600e6ffd724c4f30dcad1ae819e431f.pdf 38a7afce04630a5e030ad9be66fde7a9 Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Title A name given to the resource Problems in the Management of the Economy 1971 - 75 Text A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text. Text Any textual data included in the document Chapter V, Public Sector Expenditure on Goods and Services Perhaps the single most important stimulus for our exercise in assessing the medium-term prospects for the economy has been the publication by the Government, starting in 1969 1 of its detailed plans tor public expenditure looking five years aheado The principal immediate purpose of the analysis we have undertaken is to provide the necessary economic perspective for judging the impact of the proposals contained in the most recent Public Expenditure White Paper (Cmnd 4829) . 2, Although a large number of improvements 1.n presentation have beep made s1.nce the first White Paper (Cmnd .. 4234) 1 the incorporation of thes.:: ·'stimates in the present kind of exercise rema1.ns a tar from straightforward task In partl.cular, it is still difficult to relate White Paper figures to public expenditure measured 1.n the National Income Accounts; the re remain a number. ot points on which Treasury gu1.danc.e has to be sought before the estl.mates can be adapted to the Nat1.onal Accounts framework wh1.ch must 1nevitably be used in our analysis 3 A further difficulty is that the status of the White Paper figures 1s not perfectly clear in relation to mote recent Government announcements involving expend1ture changes For example, it 1s not clear whether the increased hospital building programmes announced 1.n February 1972 are in add1.tion to those contained 1.n the Wh1te Paper, or whether they are included 1n 1.t 4 A more fundamental problem is that the burden of public expenditure on the economy as a whole goes a good deal beyond the direct pre-emptl.on of output represented by public sector expenditure on goods and services, Certain other types of expenditure (in particular subsidies ,current and capital grants at home and overseas, and possibly debt interest) are recognised to have an l.ndirect effect on demand which 1.n some cases is quite large in relation to the sums involved, So far as we could: we have allowed for such effects in our projections of demands elsewhere in the economy, the sectors principally affected being private housebuilding and the balance of payments, but there is much scope I. for improvement ~n the accuracy of our procedures ~n this respect, 5 ·' Since our main purpose is to examine the consequences of the programmes actually implemented between 1960 and 1971 and currently proposed for 1972-5, actual public sector expenditures are treaced throughout our exerc~se as being at par, We do not ask here whether actual expend~ture, past or projected, is in line with the Government's stated object~ves for the publ~c sector. or with what the par economy can reasonably sustain,. 6. Briefly. our main conclusion in this Chapter IS that. public sector expenditure on goods and services is expected to grow at approximately the same rate between 1971-5 as that experienced earl1er in the peood: Public Expenditure on Goods and Services 1 1960-75(1) 1960 1975 Growth Rates 1960- ll 1971-75 (£ bi llion; 1963 market pnces) (% per annum) Public consumption 4,8 6 6 2. I 23 Housebui lding 0 3 06 5-3 16 Other public sector fi xed capital formation 1,.5 7,9 4. 7 3, 9 ~ Total (1 . -6 6 - 10 .. 1 2~9 2. 7 -- (1) Excludes stockbuilding, which is Included 1n total stockbuilding- see Chapter VL Derivation ~f the fi~ures 7. For the period 1960-71, data for the ma1n catEgories of public expenditure on goods and services at 1963 market prices w.:ts obtained from the January 1972 edition of Economic Trends (1971 being estimated on t.he basis of three-quarters' figures)_ Our projections of future expenditure were based on the Government's latest CC?mprehensive estimates conta~ned ~n the Wh1te PapeL To these were added the extra expenditures on nationalised Industries, roads, etc scheduled for 1972/73 and 1973/74, announced in the House of Commons on 23rd November. 1971. V-3 8. A number of adjustments were necessary in order to convert the White Paper estimates 1 which are for fiscal years and expressed in 1971 survey prices, to the required calendar year and 1963 pnce basis (l) Firstly. projected aggregate expenditures (at 1971 survey prices) 1n each of the relevant economic categories were obtained from the detailed estimates by programme and main economic category given in Table 3o 9 of the White Paper 1 and to these were added the. further increases announced in November 1971, (The published estimate of 11 shortfall" was allocated 1n its entirety between the "goods and serv1ces" categories on a pro-rata basis (1) The expenditure estimates 1n the Wh1te Paper are given on two alternative bases, the first being at the prices rullng at the tlme v~ the survey, and the second being at the anticipated outturn prices ot the survey (fiscal) year, with in addition an allowance for the "relat1ve pnce effect". The first version 1s thus at conventional constant prices ·and measures changes in the physical volu~e of public sector output in pr1nciple according to the conventions that are used for all constant price ser1e.s in the National Accounts. The second 1ntroduces a measure of the year tu year change 1n the unit cost (excluding taxes) oi publ1c sector output relative to the unit costs of domestic output as a whole, and is therefore a better indication of the public sector's burden on resources However, in this exercise, we utilise estimates in volume terms tor the sake of cons1stency in dealing with the various components of aggregate demand The increasing relative labour content of publ1c sector output (or. at least, the "current" component of that output) is 1n pr1nc1ple allowed for 1n our projections of overall productivity growth, but s1nce the share oi public sector current expenditure in total expenditure, as conventionally measured in real terms, is not expectEd to change very much by 1975, its impact on the productivity trend can be considered to be negligible. :-;--~· ,,. V-4 and deducte df rom t he expend1. ture estl.mates.).(1) The resulting projections were then expressed at 1963 prices using a price deflator for each category obtained by dividing the outturn for the four quarters of fiscal year 1970/71 at 1963 prices published in Economic Trends by the White Paper outturn for 1970/71 at 1971 survey prices. Finally these estimates on a fiscal year basis were converted to a calendar year basis by allocating 75 per cent of projected expenditure in each fiscal year to the nearest calendar year t and the remainder to the following calendar year. Movements in the Major Items 9. The principal movements 1n expenditure can be summarised as follows; Public Sector Expenditure on Goods and Services 1960-75(}) (£ million; 1963 market prices) Year Public Housebuilding Other fixed Consumption capital formation Total 1 1960 1971 1975 4775 6023 6603 Gr>owth r>ates (% per> annwnJ Z960-?Z 2. z l9?l-75 2? J 301 532 56 7 ,c;·.· 3 7 · f) 1505 2496 2904 4., 7 3,9 6581 9051 10074 ~ 29 2.. 7 (1) Excluding stockbuilding, which lS included 1n total stockbuilding see Chapter VI, (For further details. see Appendix Table 2) Projected growth in the total of expenditure 1s very slightly lower than that recorded for the period 1960-71; were the average rate of growth for the past period continued to 1975, total expenditure would be no more than £30 million higher than-the projected level at that date. Quite large changes are nevertheless (1) It was further assumed that the whole of the "contingency reserve" will be appropriated for transfers, etc. V-5 expected in the growth rates of the ma1n components, In part1cular it is anticipat that local authority housebuilding, follow1ng its sharp fall between 1969 and 1971, will grow relatively slowly thereafter, Other capital formation 1s also expected to grow at a somewhat slower rate than in the past per1od (especially compared with the rapid growth between 1960 and 1965)" W1thin th1s total. investment 1n roads, surface transport and health and e:n\Jlronmental services is planned to increase relatively rapidly (at 6~ per :..ent per annum), whlle that on nationalised industries is expected to grow annualiy by only 2 per cent on average- the bulk of the increase having been brought forward as a result of the November measures to the earlier half of the proJection per1od, It 1s perhaps a:&o wcrth noting that capital expenditure on schools, universities, etc,, 1s expe~t"'d to fall quite sharply from 1972 to 1975. 10 As regards current expend1ture, outlays on the health serv1ce. educatior, law and order, roads and "miscellaneous lol..ai servH.es 11 are all expected to grow at about the same rate as total GDP . (the projected annual growth rate for rhe total of these being about 3~ per cent), wh1le those on defence, finanoal administration and trad~ and 1ndustry (where reductions 1n a1rcraft projects· are an important factor) are not expected to increase by very muc_h over the projection period  Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Title A name given to the resource Chapter V Public Sector Expenditure on Goods and Services Creator An entity primarily responsible for making the resource Cambridge Economic Policy Group Source A related resource from which the described resource is derived Problems in the management of the economy 1971 - 75 pages V-1 to V-5 Date A point or period of time associated with an event in the lifecycle of the resource 1972