My FOI request is as follows:
How much of this £50 billion contribution to UK GDP, is attributed to each region & countries of the UK?
On what formula is the expenditure on defence attributed to regions & countries of UK?
How much of the contribution & expenditure from defence is allocated to extra-regio?
What international accounting standard is used for defence expenditure & contribution to GDP.
Thank you for your request. Please see the following answers to your questions.
1. How much of this £50 billion contribution to UK GDP, is attributed to each region & countries of the UK?
We publish government expenditure data by region and country in its Country and Regional Public Sector Finances publication, based on the European System of Account (ESA 2010). The data is based on data obtained from HM Treasury's publications, Public Expenditure Statistical Analyses (PESA) and Country and Regional Analyses. These publications contain Total Managed Expenditure (TME) which is the current and capital expenditure of the public sector on a National Accounts basis.
HMT base their country and regional analyses within a Total Expenditure on Services (TES) framework. This is similar to their TME and ONS' National Accounts measure, but the main difference is that TES does not include general government capital consumption (depreciation). These data are not allocated due to difficulties in attributing certain types of spending to the correct functions of government, like defence.
Our Country and Regional Public Sector Finances publication attributes the total UK defence expenditure data from the TES framework to countries and regions, using regional population estimates.
Therefore, in 2018/19, £40 billion of total defence expenditure has been allocated to regions and countries as in the table below:
Link to HM Treasury's Public Expenditure Statistical Analysis - Data and Methodology
Link to HM Treasury's Country and Regional Analysis (CRA)
Link to ONS' Country and Regional Public Sector Finances Expenditure Tables
2. On what formula is the expenditure on defence attributed to regions & countries of UK?
The majority of defence expenditure is deemed to be incurred on behalf of the UK as a whole. We have therefore apportioned these data based on regional population estimates.
3. How much of the contribution & expenditure from defence is allocated to extra-regio?
We currently provide estimates of gross value added (GVA) by industry for sub-national areas of the UK, including for the Extra-regio category.
GVA data for Extra-regio can be found in the Regional economic activity by gross domestic product, UK: 1998 to 2018 release published on 19 December 2019.
In Table 1 we show the latest five years of GVA in current prices (in millions of pounds). Extra-regio GVA is allocated to only two industries: SIC division 06 (in Section B), which covers oil and gas extraction from the continental shelf; and SIC division 84 (in Section O), which covers embassies and armed forces posted overseas.
Download this table Table 1: UK Extra-regio GVA by industry, 2014 to 2018 (£ million)
4. What international accounting standard is used for defence expenditure & contribution to GDP
The international standard for measuring GDP is contained in the System of National Accounts.
Link to System of National Accounts
Link to European System of Accounts