160420 Tax and spending by region
  • Regional differences. We all know that different regions contribute to – and take from – the public finances to different extents. But what are the actual numbers? The above chart takes data from a few sources, does some simple maths on them, and presents the average revenue and expenditure, in 2013-14, for each person in each area of the United Kingdom. The areas are ordered according to their overall balances.
  • The sum of all expenditure. But before we get on to those balances, a point of order. “Total expenditure” is taken here to be the sum of “identifiable expenditure” and “non-identifiable expenditure”. The former is, in the words of the Treasury, “incurred for the benefit of individuals, enterprises or communities within particular regions,” such as health or social security spending. The latter is “deemed to be incurred on behalf of the United Kingdom as a whole,” such as on defence or diplomacy. This non-identifiable expenditure is rather more difficult to calculate by region, but it’s also by far the smaller part – accounting for 14 per cent of all spending on services. The chart would barely change if we took it out.
  • London… It’s little surprise that our nation’s capital has the highest balance overall. In 2013-14, the average Londoner contributed £3,989 more than they gained back in services – although it should be noted that this wasn’t for lack of spending. Thanks largely to higher costs in the capital, the per capita expenditure figure for London was, at £11,124, the highest in all of England. It’s just that the tax revenue figure of £15,113 was even higher still.
  • …and beyond… Outside of London, the South East and the East, every other region of the UK has a negative balance – which is to say, they gain more from public expenditure than they lose from taxes. The largest gap is in Northern Ireland, where the per capita expenditure figure for 2013-14 was £12,218, compared to a revenue figure of £6,832.
  • …up to Scotland. Another region that stands out is Scotland. Its expenditure per capita figure of £11,532 is second only to Northern Ireland’s. But its overall balance is healthier than that suggests, thanks to its relatively high revenue figure of £8,934. Perhaps this is explained by Scotland’s particular social mix: deprived communities requiring state support, alongside high net-worth individuals in the banking and, at least in 2013-14, the oil industries. And perhaps, in turn, this helps to explain why Scotland has an independence movement whereas Wales never really has: there’s disgruntlement at the current state of things, but also a notion that maybe, just maybe, they can afford to go it alone.