The cost of running government departments

Administration budgets - spending compared to plans 2013 to 2014
Government departments spend some of the money they are allocated on their own operations. This includes the cost of employing staff, from salaries to pension contributions; of renting and operating the buildings in which government officials work; and building and running the IT systems that enable (or otherwise) government business. Overall, spending on administration, as measured by the administration budgets, is lower than planned.
Separate data is available on estates and staff costs, two significant components of the money departments spend on their own operations. The government estate has shrunk in terms of cost and size, and government staff now have to make do with less space per employee. The story of staff costs is slightly different: while the cost of employing permanent staff has fallen, this is partially offset by employing temporary staff, particularly agency and clerical staff and interim managers.


About the data

For overall administration costs, we use Public Expenditure Statistical Analyses (Pesa), which we also used in the ‘Finance’ chapter. We have used table 1.7 (Administration budgets) from Pesa 2013 and 2014 to compare plans with outturn. The definition of ‘administration spending’ has changed over time and may not include everything related to running the operations of a department.
Also, throughout this chapter, we use the savings reports published annually by the Cabinet Office’s Efficiency and Reform Group (ERG) since 2011. These achieved in a number of categories of spend, including staff costs, consultancy, advertising and IT spend, and estate and major projects costs.
On estates, we have used the 2013 edition of State of the Estate, which has been published annually since 2010 by the Government Property Unit. It contains data on the size and cost of the mandated estate – the part of the government estate for which departments are required to report data centrally, comprising the property owned or used by government departments and arm’s-length bodies and excluding infrastructure, heritage sites, the NHS, overseas property and military estate. The departmental data is for the full departmental group – it includes arm’s-length bodies. A subset of this estate – the ‘benchmarked estate’ – also includes unit costs and comparison to private sector benchmarks.
On staff costs, we have used workforce management information (WMI). This is internal data on the numbers of different categories of staff and the related costs, published monthly by departments. This data started to be published after the ERG instituted a system of spending controls on hiring as well as consultancy and some other spending. They are not official statistics, so should be interpreted carefully; we have found occasional errors in the data and not all of it is publicly available.