Public Sector Employment and Spending as percentage of GDP.

1. Public sector employment and expenditure by region
Standard Note: SN/EP/5625
Last updated: 29 February 2012
Author: Adam Mellows-Facer
Section Economic Policy and Statistics
This note shows the regional pattern of public spending and public sector employment.
Northern Ireland, Wales and the North East have the highest proportion of public sector
employment and also the highest public expenditure as a share of GDP. London, the South
East and the East of England have the lowest public shares of both employment and GDP.
There are some caveats to bear in mind in interpreting these data. Not all employment and
public expenditure can be attributed to a particular country or region. Also public expenditure
includes transfer payments which do not directly contribute to GDP. These points are
explained more fully in section 1 below.
Contents
1 Notes 2
2 Public sector employment 3
3 Public sector expenditure 4
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2. 1 Notes
It should be noted that not all public sector employment or expenditure can be identified by
region:
• Approximately 40,000 public sector employees cannot be assigned to a region.
• Public expenditure in 2010/11 identifiable by region accounted for 80% of total public
expenditure
These data are therefore indicative of the relative importance of the public sector by region
only. They should not be used to infer national totals.
The Treasury offers the following warning about comparing public expenditure between
regions:
Most public spending is planned to benefit categories of individuals and enterprises
irrespective of location, or where locations are prioritised using national criteria. The
regional analysis presented in this chapter shows where the individuals and
enterprises that benefited from public spending were located. It does not mean that all
such spending was planned to benefit a particular region, though a proportion of public
spending is planned on a regional basis.
Comparisons on the basis of proportions of Gross Value Added (GVA) should be used with
caution. GVA (the denominator) does not include transfer payments, such as social security
benefits, which make up a large proportion of public expenditure (the numerator). Transfer
payments do not contribute directly to GDP, although clearly they need to be financed, as
they represent a transfer of spending power from one person to another rather than a
payment for economic output. The percentage figures shown will therefore overstate the
public sector’s direct contribution to GDP.
2

3. 2 Public sector employment
Table 1
Public sector employment by country and region
Headcount, Q3 2011, not seasonally adjusted
Number % of UK % of
thousands total employment
North East 274 4.6% 25.0
North West 680 11.4% 21.5
Yorkshire and the Humber 536 9.0% 22.5
West Midlands 496 8.3% 20.7
East Midlands 382 6.4% 19.0
East of England 444 7.5% 17.1
London 790 13.3% 18.5
South East 678 11.4% 17.1
South West 495 8.3% 19.6
England 4,775 80.2% 19.6
Wales 333 5.6% 25.6
Scotland 589 9.9% 23.7
Northern Ireland 218 3.7% 27.7
United Kingdom 5,957 100.0% 20.6
Source: ONS Statistical Bulletin, Public Sector Q3 2011, Table 6
Note: (a) UK total includes around 40,000 employees not allocated to a region
Public sector employment as % of total employment
Northern Ireland
Wales
North East
Scotland
Yorkshire & the Humber
North West
West Midlands
United Kingdom
England
South West
East Midlands
London
South East
East
0 5 10 15 20 25 30
3

4. 3 Public sector expenditure
Table 2
Identifiable public expenditure on services by country and region
2010-11 outturn
Public
spending as a
£ million % UK total per head % of GDP (a)
North East 24,764 4.5% 9,501 60%
North West 65,102 11.8% 9,386 54%
Yorkshire and Humberside 45,122 8.2% 8,512 50%
East Midlands 36,293 6.6% 8,098 45%
West Midlands 47,347 8.6% 8,679 51%
East 45,687 8.3% 7,834 41%
London 79,799 14.4% 10,198 29%
South East 64,170 11.6% 7,529 34%
South West 42,694 7.7% 8,096 43%
England 450,978 81.5% 8,634 41%
Wales 29,906 5.4% 9,947 66%
Scotland 53,085 9.6% 10,165 50%
Northern Ireland 19,197 3.5% 10,668 68%
UK (identifiable by region) 553,166 100.0% 8,884 43%
Note (a ) Identifiable public spending as a % of w orkplace Gross Value Added
Sources: HM Treasury, Public Expenditure Statistical Analyses update October 2011
ONS, Regional GVA
Public spending as a % of GDP
Northern Ireland
Wales
North East
North West
West Midlands
Yorkshire & Humberside
Scotland
East Midlands
UK (identifiable by region)
South West
East
England
South East
London
0 10 20 30 40 50 60 70
4