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PESA 2002-03

Appendix F Expenditure on services

F.1 The tables in Chapters 3 and 4 which show public expenditure disaggregated by function and by economic category and the tables in Chapter 8 which show public expenditure by country and by region all focus on total expenditure on services. The definition of expenditure on services can be described as public sector expenditure on services, and as such is consistent with the use of TME – a total public sector aggregate – as the main measure of total public spending in this volume.

F.2 Expenditure on services differs from TME in that it excludes debt interest payments, the net public sector pensions line in the standard AME table (see eg Table 1.3) and most of the accounting adjustments in Other AME. Alternatively, building up from the components of TME, expenditure of services is equal to DEL plus Departmental programmes in AME (but not non-cash items), (see Appendix E), except for Net Public Service Pensions, plus Net Payments to EC Institutions, plus Locally Financed Expenditure plus certain accounting adjustments in Other AME.

F.3 In more detail, Expenditure in Services is defined as:

spending in Departmental Expenditure Limits

+ spending in Departmental in AME (except non-cash items)
- net public service pensions
+ net payments to EC Institutions
+ locally financed expenditure
+ accounting adjustments to remove all debt interest flows from DEL and AME
+ accounting adjustments to deduct financial transactions from DEL and AME, except for the subsidy and bad debt element of student loans
+ accounting adjustments to remove the profit/loss of public corporations recorded in DEL and AME
+ accounting adjustments to remove non-cash items recorded in DEL and AME. Such items arise from the introduction of accruals recording.

F.4 Alternatively, expenditure on services can be defined in terms of the current and capital expenditure of spending sectors as:

Central government own current expenditure in DEL, other than debt interest

+ Central government own current expenditure in Departmental AME, other than debt interest and public service pensions (net of receipts) and non-cash items
+ Central government subsidies to public corporations
+Subsidy and bad debt element of student loans +Local authorities current expenditure, other than debt interest +Central government gross capital expenditure (net of asset sales)

+ Local authorities gross capital expenditure (net of asset sales)

+ Public corporations gross capital expenditure (net of asset sales).

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