{"id":82999,"date":"2025-06-11T07:13:07","date_gmt":"2025-06-11T06:13:07","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=82999"},"modified":"2025-06-11T07:13:07","modified_gmt":"2025-06-11T06:13:07","slug":"spending-review-jargon-buster","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/06\/11\/spending-review-jargon-buster\/","title":{"rendered":"Spending Review jargon buster"},"content":{"rendered":"<p>The Spending Review will be riddled with jargon today that is alien to almost anyone not familiar with the absurd language of government accounting, which is not used anywhere else. So, this is a jargon buster, and yes, I did use ChatGPT to help create it, but I won't tell you how many iterations it took to get it to where I wanted.<\/p>\n<p>This information will be found in this blog's glossary under the heading government accounting jargon.<\/p>\n<p>There are also new glossary entries on GDP and economic equilibrium today. Again, ChatGPT was used to assist their development, but used with care, this can be a useful tool, and it can help fill in the gaps in that project, but I stress, I use it with care, and invariably edit what it produces.<\/p>\n<hr \/>\n<p><b>UK Public Spending Categories: RDEL, CDEL, AME, and TME<\/b><\/p>\n<p class=\"p3\">Government spending in the UK is broadly divided into two categories:<\/p>\n<ol start=\"1\">\n<li>\n<p class=\"p1\"><b>Departmental Expenditure Limits (DEL)<\/b><b><\/b><\/p>\n<\/li>\n<li>\n<p class=\"p1\"><b>Annually Managed Expenditure (AME)<\/b><\/p>\n<\/li>\n<\/ol>\n<p class=\"p4\"><span class=\"s2\">Together, these make up <\/span><b>Total Managed Expenditure (TME)<\/b><span class=\"s2\">.<\/span><\/p>\n<hr \/>\n<h3><b>1. DEL \u2013 Departmental Expenditure Limits<\/b><\/h3>\n<p class=\"p3\">DEL is <span class=\"s3\"><b>spending that departments can plan for and control over a multi-year period<\/b><\/span>, set by the Treasury through spending reviews. It is split into two parts:<\/p>\n<h4><b>a) RDEL \u2013 Resource Departmental Expenditure Limit<\/b><\/h4>\n<ul>\n<li>\n<p class=\"p1\"><b>What it covers<\/b><span class=\"s1\">: <\/span><b>Day-to-day operational costs<\/b><span class=\"s1\"> of running public services.<\/span><\/p>\n<\/li>\n<li>\n<p class=\"p1\"><b>Examples<\/b><span class=\"s1\">:<\/span><\/p>\n<ul>\n<li>\n<p class=\"p1\">Civil servant wages<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Running costs of government offices<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Procurement of services (e.g. IT support)<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Grants to local authorities or NGOs<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Why it matters<\/b><\/span>: It controls how much departments can spend on <span class=\"s1\"><b>recurrent costs<\/b><\/span> and service delivery.<\/p>\n<\/li>\n<\/ul>\n<h4><b>b) CDEL \u2013 Capital Departmental Expenditure Limit<\/b><\/h4>\n<ul>\n<li>\n<p class=\"p1\"><b>What it covers<\/b><span class=\"s1\">: <\/span><b>Investment in long-term assets<\/b><span class=\"s1\"> and infrastructure.<\/span><\/p>\n<\/li>\n<li>\n<p class=\"p1\"><b>Examples<\/b><span class=\"s1\">:<\/span><\/p>\n<ul>\n<li>\n<p class=\"p1\">Building hospitals and schools<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Purchasing military equipment<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Upgrading transport networks<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Why it matters<\/b><\/span>: It funds <span class=\"s1\"><b>capital formation<\/b><\/span>, supporting long-term productivity and public service capability.<\/p>\n<\/li>\n<\/ul>\n<blockquote><p><b>Combined<\/b><span class=\"s2\">, RDEL and CDEL make up <\/span><b>DEL \u2013 spending that is subject to firm multi-year limits<\/b><span class=\"s2\">.<\/span><\/p><\/blockquote>\n<hr \/>\n<h3><b>2. AME \u2013 Annually Managed Expenditure<\/b><\/h3>\n<ul>\n<li>\n<p class=\"p1\"><b>What it is<\/b><span class=\"s1\">: <\/span><b>Spending that is demand-led or volatile<\/b><span class=\"s1\">, and therefore <\/span><b>harder to plan or control in advance<\/b><span class=\"s1\">.<\/span><\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Set by<\/b><\/span>: The Treasury still authorises it, but <span class=\"s1\"><b>not fixed in the same way<\/b><\/span> as DEL because of its unpredictability.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><b>Examples<\/b><span class=\"s1\">:<\/span><\/p>\n<ul>\n<li>\n<p class=\"p1\">Social security benefits (e.g. Universal Credit, State Pension)<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Public sector pensions<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Debt interest payments<\/p>\n<\/li>\n<li>\n<p class=\"p1\">BBC licence fee-funded spending<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Why it matters<\/b><\/span>: It makes up a <span class=\"s1\"><b>large and growing part<\/b><\/span> of government expenditure, particularly as demographics shift and interest payments rise.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Managed differently<\/b><\/span>: Departments estimate their AME needs annually, but it isn\u2019t \u201ccapped\u201d in the same way as DEL.<\/p>\n<\/li>\n<\/ul>\n<hr \/>\n<h3><b>3. TME \u2013 Total Managed Expenditure<\/b><\/h3>\n<ul>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Definition<\/b><\/span>: The <span class=\"s1\"><b>totality of UK government spending<\/b><\/span> that is subject to fiscal management.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><b>Formula<\/b><span class=\"s1\">:<\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">TME = DEL (RDEL + CDEL) + AME<\/span><\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Purpose<\/b><\/span>: Used in fiscal planning and oversight, including the setting of overall spending rules (like debt-to-GDP targets).<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><b>Includes<\/b><span class=\"s1\">:<\/span><\/p>\n<ul>\n<li>\n<p class=\"p1\">All spending by central government departments<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Local government spending (when funded by central grants)<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Public sector pensions, welfare, and debt servicing<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3><b>Visual Summary Table<\/b><\/h3>\n<h3><b><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-83000 alignleft\" src=\"https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2025\/06\/Screenshot-2025-06-10-at-19.00.08-550x114.png\" alt=\"\" width=\"642\" height=\"133\" srcset=\"https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2025\/06\/Screenshot-2025-06-10-at-19.00.08-550x114.png 550w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2025\/06\/Screenshot-2025-06-10-at-19.00.08-768x159.png 768w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2025\/06\/Screenshot-2025-06-10-at-19.00.08-1536x317.png 1536w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2025\/06\/Screenshot-2025-06-10-at-19.00.08-600x124.png 600w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2025\/06\/Screenshot-2025-06-10-at-19.00.08.png 1840w\" sizes=\"auto, (max-width: 642px) 100vw, 642px\" \/><\/b><\/h3>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h3><b>Policy Implications<\/b><\/h3>\n<ul>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>DEL<\/b><\/span> is where governments exercise deliberate policy choices and priorities (e.g. boosting NHS funding).<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>AME<\/b><\/span> reflects <span class=\"s1\"><b>entitlements, commitments, and macroeconomic conditions<\/b><\/span>, and is less influenced by political choice in the short term.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>TME<\/b><\/span> is used to measure overall government size and fiscal sustainability (e.g. how spending compares to tax revenues or GDP).<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The Spending Review will be riddled with jargon today that is alien to almost anyone not familiar with the absurd language of government accounting, which<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/06\/11\/spending-review-jargon-buster\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[67,26,35],"tags":[],"class_list":["post-82999","post","type-post","status-publish","format-standard","hentry","category-accountancy","category-accounting","category-economics"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/82999","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=82999"}],"version-history":[{"count":5,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/82999\/revisions"}],"predecessor-version":[{"id":83024,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/82999\/revisions\/83024"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=82999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=82999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=82999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}