Fiscal Policy Government

Spending

Aims & Objectives

Aim:
Understand government
spending
Objectives:
Explain the need for government
spending
Analyse government spending
trends in the UK

Starter

In groups discuss what

the three main goals
of fiscal policy should
be.

Goals of Fiscal Policy

Growth

Funding

Macroecono
mic Stability

Stimulate AD/AS
Be able to spend
and tax without
increasing debt
Help to smooth the
economic cycle and
AD

Government Spending

In groups discuss
what kind of areas
the government
spends its money.

Government Spending
Welfare

Defence

Environm
ent

Education

Law

Housing

Health

Transport

Industry

Government Spending
Item

Spend bn

Public Pensions

138

NHS

126

State Education

97

Defence

46

Social Security

117

State Protection

32

Transport

19

General Government

18

Other public services

25

Public Sector Interest

45

Other

21

Total Spending

684

Why have government

spending?
Provide
Merit &
Public
Goods

Redistribu
te Income
& Wealth

Regional
Resource
Allocation

Influencin
g
Economic
Activity

GOVERNMENT
SPENDING
TRENDS

Total Spending % of GDP

80
70
60
50
40
30
20
10
0

Interest Total bn
60

50

40

30

20

10

Government Spending
Information Stations - Toblerone
Brief
Work in groups provided with one form of
government spending article and data.
Assess the data noticeable periods/ changes/
volatilities/ economic events
Assess data and summarise article use laptop to
build an argument
Become an expert on the field & argue for your
portion of the April Budget (Toblerone) for your
area.

Education % of GDP
7
6
5
4
3
2
1
0

Health Care % of GDP

9
8
7
6
5
4
3
2
1
0

Welfare Total bn
140

120

100

80

60

40

20

Pensions bn Total
160
140
120
100
80
60
40
20
0

Defence % of GDP
60

50

40

30

20

10

Argue For Your Budget!

Educatio
n

Health
Care

Pensions

Welfare

Defence