The regional dimension of public expenditure in England

Public expenditure in the UK has a location dimension with respect to the devolved arrangements for Scotland, Wales and Northern Ireland. There is no location dimension to the allocation of public expenditure to the regions of England. Nevertheless, whether planned or not, public expenditure impacts on the regions through the provision of services and associated employment and income generation. This paper examines the methodological issues in assigning public expenditure to countries and regions, and reviews existing and past patterns of public expenditure in English regions. It then considers the relevance of this analysis to policy options for introducing an explicit regional dimension to the public expenditure allocation mechanism in England. Paradoxically, English regional devolution is potentially more radical in its implications, in terms of rupturing existing allocative mechanisms that lead to flows of expenditure, than devolution in the territories (where it can be interpreted as putting democratic caps on pre-existing bureaucratic bodies)