How much does an MBA increase your salary?

/in , , /by

In today’s competitive job market, professionals often seek advanced education to gain a competitive edge and boost their earning potential. Among the various academic pathways on offer, pursuing a Master of Business Administration (MBA) is frequently seen as a strategic move towards achieving higher career goals.

Here, we’ll explore the average salary increase for MBA graduates, whether an MBA provides a good return on investment, and industry-specific trends.

The MBA advantage

Business schools, universities, and higher education institutions worldwide offer MBA programmes that cater to a diverse range of students – from those with substantial work experience to recent Bachelors degree graduates.

Employers recognise that MBA students possess a unique and invaluable skill set that combines business acumen, leadership capabilities and strategic thinking. Before enrolling, it’s worth asking how much the advanced degree will translate into a tangible salary increase.

Post MBA-salary and the average salary increase

One of the key metrics used to measure the success of an MBA programme is the average salary increase experienced by its graduates. According to a survey carried out by the Graduate Management Admission Council (GMAC), the organisation responsible for the GMAT (Graduate Management Admission Test), MBA graduates witness a significant bump in their salaries post-graduation. 

In the UK, Glassdoor notes that the average MBA salary is around £47,000, though it can range from a base salary of £35,000 right up to £61,000.

The post-MBA starting salary is a crucial indicator of the programme’s impact on earning potential. This figure often reflects not only the investment in education, but also the enhanced value employers place on MBA holders. 

The exact annual salary increase an individual can expect depends on their pre-MBA work experience and their chosen industry.

The higher education return on investment 

When deciding whether to commit to an MBA, the cost of the programme should be weighed against the potential financial rewards. The return on investment (ROI) is a key factor in this decision-making process. 

ROI in the context of an MBA programme refers to the financial gain achieved through higher salaries and better job opportunities upon completion, compared to the initial investment in tuition and other associated costs that come with further study.

While the cost of MBA programmes vary between institutions, the programme delivery can also impact how much it costs to study. On-campus programmes will likely be more expensive than distance learning programmes due to the costs associated with commuting. Degrees taught part-time may take longer and be more of a long-term time commitment, but the reduced schedule compared to full-time MBA study enables working and earning an income at the same time. 

Industries with the highest earning potential post-MBA

The job market is dynamic, and MBA holders can leverage their versatile skill sets to explore diverse career paths. The demand for professionals with a Masters degree in business administration cuts across industries because corporate recruiters value the academic and transferable skills that MBA grads can bring to the table.

Lucrative job opportunities and higher salaries for individuals with an MBA can be found across a variety of sectors. Some industries where they may be available include:

  • Consulting – consulting salaries keep rising, and these roles are very much in-demand. 
  • Finance – finance managers and investment bankers are two of the possible high-paying roles MBA graduates could aim for within financial services.
  • Technology – one of the fastest growing sectors which shows no sign of slowing down, this is a future-proof industry where those at the forefront of innovation can be financially rewarded.
  • Energy – individuals with an understanding of how politics, money, and the environment interact, and those with specialised knowledge in sustainability, are in high-demand.
  • Consumer packaged goods – this industry has seen consistent growth and resilience against economic hardship, making it a buoyant sector to progress in.

Specialised MBA programmes

In addition to traditional executive MBA programmes, there  are also specialised courses that are tailored to career goals in specific sectors.

There is a wide range of specialist MBA courses and the course content may vary by institution, so if you have a certain career path in mind, it’s important to look for the programme most suited to your needs.

Entrepreneurship and start-up success

The MBA advantage extends beyond climbing the corporate ladder. Many entrepreneurs and start-up founders hold MBA degrees, utilising their business acumen to navigate the complex landscape of launching and managing a successful business.

An MBA degree can give you a full view of what it takes to run a business, covering essentials  such as business strategy, finance, human resources and marketing. This knowledge can help business founders, who often have to wear many hats during the early days of establishing a new company. And, along with the entrepreneurial spirit instilled during an MBA programme, it can be used throughout the life cycle of a startup to improve its chances of success.

Increase your earning potential with an MBA

Pursuing an MBA can lead to a substantial increase in salary for graduates. The post-MBA salary increase, return on investment, and industry trends showcase the tangible benefits of investing in a Masters degree in business administration. 

As the job market continues to evolve, an MBA remains a valuable asset for working professionals and recent graduates. Whether you aspire to progress in your current industry, switch to a new industry or start your own business, the comprehensive skill set acquired through an MBA programme can open doors to high salaries and fulfilling career opportunities.

The University of York offers two online MBAs which will equip you for roles with a higher average starting salary – the Master of Business Administration (MBA) which will prime you for success in the private sector, and the MBA Public Sector Management for those with leadership ambitions at nonprofits. These part-time MBAs allow you to study flexibly, fitting your degree around current commitments. Taught entirely online, you will connect with peers across the world and grow your global network as you study.

From COVID to Cola: how public health services take on population-wide health challenges

/in , , /by

Healthy populations depend on oversight from public health services, which protect and improve the lives of people on a ‘big picture’ scale. Let’s take a look at the world of public health and what it does for us.

What is public health?

Public health is the science of protecting and improving people’s health at the scale of populations. That might be the people living in a local neighbourhood, a whole country or an entire region of the world. Public health work includes encouraging people to live healthier lives, carrying out research into preventing diseases and injuries, and detecting, preventing and responding to infectious diseases such as HIV, the COVID-19 pandemic or seasonal ‘flu.

The National Health Service explains that:

“It is about every single person out there. It’s about ensuring that people understand the choices they are making and the impact they are having on their health in the long term. But it’s also about making sure that when they do come into contact with healthcare services that those services are appropriate and of a good standard and that evidence-based healthcare is used wherever possible,”

Public health is also about looking at the wider health inequalities there are in society, whether that is people living with debt or on very low incomes, poor housing or mental health problems. Public health services’ work to tackle challenges like these is essential for securing healthier futures for populations of people.

The ‘three Ps’ of public health

The field of public health is sometimes divided into three main areas which overlap with one another. These are the so-called ‘three Ps’ of public health, which are:

Protection

Protection against diseases involves detecting, preventing and reducing the effects of infectious diseases and of environmental, chemical and radiological physical threats. Central to health protection is collaborating with decision-makers at local and global levels.

Prevention

Prevention is a fundamental principle of modern health care. Disease prevention in public health includes primary and secondary prevention, i.e. stopping a disease from gaining a foothold in the body and counteracting and limiting its effects after diagnosis. It also includes efforts to minimise the harms and complications that diseases cause.

Promotion

Health promotion is the process of giving people more control over their own health so that they can improve it. It’s one of the aims of the World Health Organization (WHO), which works to improve overall population health by helping people reduce the risks posed by smoking tobacco, consuming alcohol and not doing enough physical activity. The WHO’s health promotion goals, widely adopted across the world, were laid out in the 1986 Ottawa Charter.

What does the World Health Organization (WHO) do?

The WHO works globally to promote health, keep the world safe, and serve vulnerable people everywhere. Its goals are to:

Achieve universal health coverage for a billion more people by helping more people to access essential primary healthcare and medicines, making the cost of healthcare more sustainable, training the public health workforce and supporting people’s participation in national health policies.

Protect a billion more people from health emergencies by identifying, mitigating and managing risks, preventing emergencies and supporting the development of tools and interventions needed to fight outbreaks, spotting and responding to urgent health emergencies and helping health agencies and providers to deliver health services in difficult to reach and vulnerable parts of the world.

Provide a further billion people with better health and well-being by addressing social determinants of health, promoting approaches that cross different sectors, and prioritising health in all policies and healthy settings.  

Who oversees public health in the UK?

UK government public health services are managed by the UK Health Security Agency (UKHSA) and the Office for Health Improvement and Disparities (OHID), which replaced Public Health England in October 2021.

The UKHSA is an executive agency sponsored by the Department of Health and Social Care and collaborates with relevant agencies in Scotland, Wales and Northern Ireland. It’s responsible for protecting every member of every community from the impact of health threats, including infectious diseases as well as chemical, biological, radiological and nuclear incidents. The agency leads public health science and operations at national and local levels, as well as on the global stage. Some of the UKHSA’s specific responsibilities include health protection and planning and carrying out the UK’s response to external health threats such as pandemics.

The Office for Health Improvement and Disparities (OHID), on the other hand, focuses on reducing the pressures on the healthcare system and on society of preventable illness and disease. It has a particular focus on the places and communities where there are the biggest disparities in health.

As part of Department of Health and Social Care, OHID brings together expert advice, analysis and evidence to develop and roll out health policy that improves the health of people in the UK. Its priorities include:

  • identifying groups and areas within the UK where ill health is worst
  • taking action on the biggest preventable risk factors for ill health and premature death including tobacco, obesity and harmful use of alcohol and drugs
  • working with the NHS and local government to improve access to the services which can help, as early as possible
  • working closely with government, communities, industry and employers to act on the wider factors that have an impact on people’s health, such as work, environmental health, housing and education. One example of this is profiling sexual and reproductive health across the UK to support local authorities and public health leads in monitoring the sexual and reproductive health of their population
  • drive innovation in health improvement, harnessing the best of technology, analytics, and innovations in policy and delivery to help deliver change where it is needed most.

Sugar, cervical cancer and smoking: three successful public health initiatives

Stoptober

An annual NHS campaign that takes place in October, Stoptober aims to persuade smokers to give up cigarettes for one month. The idea is that if smokers can give up for October, they can continue to go without cigarettes and ultimately live smoke-free. The campaign is underpinned by robust evidence from University College London which shows that if a smoker can quit for 28 days, they are five times more likely to stop smoking long-term.

Key to the campaign’s success is that it motivates and encourages smokers along their journey towards giving up for good through the official Stoptober app, daily emails, access to online communities of other people trying to stop smoking, and a personalised quit plan. These resources even give smokers insights into how much money they are saving by cutting cigarettes out of their lives. Over the 11 years it has been running, the campaign has helped over 2 million people to give up smoking.

The ‘sugar tax’

Research carried out in 2018 showed that British children were on average consuming double the recommended amount of sugar each day. Sugary soft drinks (for example squashes and fizzy drinks) are the top source of children’s sugar intake; not surprising given that a single can of cola contains nine teaspoons of sugar. Eating and drinking too much sugar can lead to obesity and decayed teeth. Research also shows that children who are overweight are more likely to remain so as adults, increasing risk of preventable diseases like diabetes and heart disease.  

As part of the UK government’s plan to tackle childhood obesity, a Soft Drinks Industry Levy (SDIL), also nicknamed the ‘sugar tax’, was introduced in April 2018. Soft drink manufacturers must now pay a charge for drinks containing over 8g of sugar. At the time the levy was launched, nearly half of the soft drinks market had already reformulated their products to reduce levels of sugar in order to avoid charges. This public health practice has also signalled a shift towards greater recognition of the role to be played by the food and drink industry in enabling healthier choices. Revenue from the levy is being invested in programmes to encourage more exercise and balanced diets in school-age children.

Vaccinating young people against cervical cancer

Human Papilloma Virus (HPV) is a group of common viruses that are passed on through sexual contact, certain forms of HPV cause abnormal changes in the cells that can sometimes turn into cancers, including cervical cancer.

A public health programme to protect young people against HPV with the aim of reducing cervical cancer rates was launched in England in 2008. Girls aged 12-13 years began to be offered routine immunisation with the Cervarix vaccination against HPV, with a catch-up programme for girls aged 14 to 18 from 2008 to 2010. A study published over a decade later in The Lancet showed that the immunisation programme reduced cervical cancer rates by 34% in girls vaccinated at age 16 -18 and a massive 87% in girls vaccinated at age 12 to 13 compared with girls who had not been vaccinated. Now, all children aged 12-13 are routinely vaccinated, not just girls. Overall, the hugely successful HPV immunisation programme has almost eliminated cervical cancer in women born since Sept 1, 1995.

Skills for a healthier, more sustainable world

Now more than ever, public sector organisations involve fast-paced change, and face pressure to deliver more with less, to navigate complex policy contexts, and to enhance performance while sustaining public service values, across everything from public health functions to local authorities. The University of York’s MBA Public Sector Management is a 100% online course designed to equip early- and mid-career professionals in the public or non-profit sector to take on these challenges and progress their career.

As a York MBA student, you’ll learn from international, research-active academics at an elite Russell Group university – and study part-time via distance learning so that you can apply what you learn directly to your current role. On this MBA you’ll develop into a global citizen, capable of influencing organisations to build sustainable communities, fairer societies and a cleaner environment. What is more, you’ll grow your global network by engaging with other MBA students across the world.

What is a local government officer?

/in , , /by

Local governments exist to meet the complex, evolving and diverse needs of citizens.

Their broad remit – which includes education, environment, health and social care, town planning and urban design, transport, tourism, culture, housing, and human resources – requires skilled, committed individuals who operate at local government level and ensure that everything functions as it should.

What is the role of a local government officer?

Local government officers ensure that practical decisions and actions related to local government policies and procedures – made by local councillors – are enacted. Their other main role is to ensure that local public service provision and delivery is efficient and cost-effective. Local government officer roles can fall within corporate, front-line or support services.

According to the Local Government Association, local government officers are distinct from civil servants in that they ‘have a duty to support the whole council, not just the cabinet.’ As such, they must remain neutral in terms of political groups and affiliations.

The role often requires interaction with numerous stakeholders including the public, local councils, local authorities, administrators, councillors and specialists. While some roles are more committee-based and far-reaching, others are embedded within specific functions and departments.

What are the responsibilities of a local government officer?

Specific duties of local government officers working in the UK will vary depending on the department they work in, the nature of their position, and the needs of the local community they serve – as well as their level of responsibility and seniority.

In its broadest sense, a local government officer’s role and oversights may encompass:

  • Public engagement, including disseminating information, addressing concerns, and gathering data and information.
  • Service delivery, including ensuring that local services such as housing, social services, education and public transportation are operating efficiently.
  • Community development, including revitalisation and redevelopment projects, infrastructure improvements, and initiatives to boost economic development.
  • Policy development, including implementing strategies, policies and actions in line with community requirements and concerns, conducting research, analysing data, and making suggestions and recommendations.
  • Cross-agency collaboration, including non-profit organisations, local community groups, councils, and government agencies in order to join forces and tackle complex, multifaceted issues.
  • Regulation and compliance, including conducting inspections, enforcing rules, and organising permits to help businesses and citizens to comply with legal requirements, council policies and regulations.

The government’s National Careers website states that the day to day responsibilities of a local government officer often include:

  • managing and evaluating projects
  • writing reports and briefing papers
  • dealing with enquiries and giving advice
  • presenting information in meetings
  • supervising administrative work and managing clerical staff
  • keeping records
  • preparing and managing contracts
  • dealing with other agencies
  • managing budgets and funding.

For many local government officers, work is predominantly desk based. However, certain roles may require estate visits, site visits and inspections.

How can I become a local government officer?

If you’re committed to ensuring equal opportunity service delivery and enhancing the lives of others, you might be suited to a local government officer position.

Whichever route you opt for, to be successful in a local government officer role, you’ll need to demonstrate a range of skills:

  • interpersonal and communication skills
  • stakeholder management
  • an ability to use initiative
  • business administration, management and project management skills
  • collaboration and teamwork
  • negotiation
  • organisation, prioritisation and planning
  • adaptability and resilience
  • problem solving and analytical skills.

What are the career prospects of a local government officer?

By its nature, local government is a diverse profession – and so too are the future career prospects it offers. There is no ‘one’ set career path; rather, the breadth and scope of its remit enables employees to follow their developing interests and strengths.

After gaining greater understanding of the sector and building on existing skills and experience, those working in local government officer positions may wish to pursue senior management, administrative and leadership roles. You’re also not limited to one function or department; another advantage of local government’s wide reach is the option to transfer between different areas – for example, moving from social services to environmental policy to social work to town planning. Others also choose to transfer from local government to other areas of the public sector organisations such as voluntary organisations, government departments and agencies, and the National Health Service.

In terms of average salary, those starting out in the role can expect to earn around £17,500, and more experienced officers around £37,000.

If you’re interested and want to find out more, websites such as jobsgopublic and localgovjobs have more information about job vacancies.

Gain the skills to drive progress and impact within local government and county councils

Could a career in local government or public services be the right choice for you?

Prepare to meet the challenges facing the public and non-profit sectors – and improve the lives of local communities and members of the public – with the University of York’s online MBA Public Sector Management programme.

You’ll combine academic expertise with practical, real-world application, exploring themes central to public life, governance and management – from diversity and sustainability to global citizenship. Our highly flexible, 100% online course is designed to support public sector professionals to take the next step in their careers and land senior leadership positions.

Study topics central to effective public sector management including policy analysis, public-private partnerships, operations management, ethical social leadership, delivering public value, strategy, marketing, leadership and more.

 

Understanding taxation systems and how they support public sector budgets

/in , /by

Public services and social welfare are among the most essential components of any modern society. But these services require funding, and this funding typically comes from taxation – the lifeblood of a nation’s public sector budgets.

Understanding the intricacies of taxation systems and public sector spending is important for anyone working in – or with – the public sector because of their far-reaching implications. For example, they influence:

  • policy-making
  • economic stability
  • citizen well-being

In the United Kingdom – along with the majority of other nations – they support a comprehensive range of services, from healthcare and education to infrastructure and defence. 

Taxation in the United Kingdom

The UK government relies on a variety of taxation sources to generate revenue for funding public services and other government activities.

These sources can be broadly categorised into direct and indirect taxes:

  • Direct taxes are the taxes on people’s income or wealth.  
  • Indirect taxes are the taxes people pay when purchasing certain goods and services.

What are the main sources of tax revenue for the government?

For the UK government, the main sources of government tax revenue include:

  • Income Tax. Income Tax in the UK is a progressive tax system, which means that higher earners pay a larger portion of their income through a higher rate of tax. Income taxpayers typically have their taxes deducted directly from their earnings – known as Pay As You Earn, or PAYE. Some people, such as those who are self-employed, can pay their taxes through a self-assessment process at the end of each tax year.
  • Value Added Tax (VAT). VAT, an indirect tax, is added to most goods and services at the point of purchase and is paid by both individuals and businesses.
  • Corporation Tax. Private sector businesses in the UK – including foreign companies with offices or branches in the UK – are required to pay Corporation Tax on their profits.
  • National Insurance. National Insurance contributions help fund the National Health Service (NHS) and other social security programmes, such as state pensions and statutory maternity pay.

Other examples of tax liabilities and accruals in the UK include:

  • The Stamp Duty Land Tax, which is paid by people purchasing homes or land in England and Northern Ireland. There is also the Land and Buildings Transaction Tax in Scotland, and the Land Transaction Tax in Wales.
  • The Aggregate Levy, a tax that applies to any commercial extraction of rock, sand and gravel.
  • The Capital Gains Tax, which applies to money made from sources such as selling personal possessions worth more than £6,000 (excluding cars), property and shares.
  • Excise Duty, which is a tariff paid on items such as alcohol and tobacco products.

It’s also worth noting that taxation systems can change over time. For example, a new tax proposed in 2021 – the Health and Social Care Levy – was later reversed by a new chancellor of the exchequer in 2022.

What are the reasons for taxation and government spending?

Taxation and government expenditure are what ensure that the public services people rely on – healthcare, education, transportation, and so on – are available, well-maintained and expanded as needed.

“Without them [taxes] it would be impossible to pay for the country’s defence services, its health, welfare and social services, its schools and universities, and its transport systems,” explains the UK Parliament website. “In addition to these huge areas of expenditure, financial support is given to other vital areas such as industry, sport, heritage and culture.”

Tax systems also enable governments to influence economic activity and initiatives. For example, the UK government offers a Research and Development Tax Relief scheme of subsidies for businesses that “work on innovative projects in science and technology.” By offering incentives and exemptions like these, governments encourage businesses to develop new technologies, advance scientific discovery, create new jobs, and drive wider economic growth.

What is the difference between a progressive and a regressive tax system?

A progressive tax system such as the UK’s income tax places a higher tax burden on higher earners. For example, in the 2023/24 financial year, there is a 20% tax threshold on UK earners’ income between £12,571 and £50,270, and a 40% tax on income between £50,271 and £125,140. 

A regressive tax, on the other hand, is a tax rate that doesn’t change regardless of where – or to whom – it’s applied. These taxes tend to disproportionately affect lower-income people because a larger percentage of their income is taxed. 

What is the difference between hypothecated and non-hypothecated taxes?

Taxation can also be categorised as hypothecated or non-hypothecated.

Hypothecated taxes, such as National Insurance contributions, are earmarked for specific purposes, while non-hypothecated taxes like income tax and corporation tax contribute to a wider revenue pool and offer the government more flexibility in allocation.

The public sector in the United Kingdom

The UK’s public sector is a collection of government services that require substantial funding – much of which comes from taxation.

Recent figures show that total public sector spending, when viewed as a percentage of the UK’s gross domestic product (GDP), is around 45%.

What are the key areas of public spending?

According to the government’s public spending statistics published in May 2023, the biggest areas of public expenditure in the UK include:

  • Social protection. Social protection is a category covering everything from housing benefit to pensions.
  • Health. Healthcare costs are always a significant area of public spending, and increased in the wake of the COVID-19 pandemic. The majority of health spending in the UK is overseen by the Department of Health and Social Care and helps fund the NHS.
  • General public services. This area has increased in recent years due to a significant increase in interest on public sector debt repayments.
  • Economic affairs. Recent examples of economic affairs spending include subsidising fuel and energy costs.
  • Education. Education spending primarily funds UK primary and secondary schools.

How are public sector budgets managed?

Public finances and decision-making in the UK must be managed prudently and transparently. Whether raising revenue through taxes or spending public funds, governments are required to outline new or amended financial plans while also seeking approval from Parliament before taking any action.

The central government is responsible for setting fiscal policy, tax policy, and allocating resources to government departments through its tax administration systems. Local authorities, meanwhile, also have budgets, and local governments manage services at the community level. 

Public finance oversight in the United Kingdom

The Office for Budget Responsibility (OBR) was created to oversee and scrutinise government finance in the UK. It is responsible for:

  • Providing independent economic and fiscal forecasts.
  • Assessing the sustainability of public finances.
  • Evaluating the government’s performance against its fiscal targets.

Help shape the future of the public sector

Advance your career in the public sector with the 100% online MBA Public Sector Management at the University of York. This flexible MBA programme has been designed for early-career and mid-career professionals in the public or non-profit sector, and because it’s studied part-time and entirely online, you can apply your learning directly to your current role.

You will learn the key concepts of areas central to management and leadership in the public sector including diversity, inclusion and global citizenship and gain knowledge in broader management including: strategy, managing financial resources, marketing and contemporary issues in leadership. Overall, you will graduate as a capable, reflective and effective professional well equipped for the demands of working in the modern public sector.

 

Twitter

 

Taxation forms the lifeblood of a nation’s public sector budgets. Learn about the intricacies of taxation systems and public sector spending in this article.

 

Facebook/LinkedIn

 

Taxation forms the lifeblood of a nation’s public sector budgets. Learn about the intricacies of taxation systems and public sector spending in this article.

 

Progress your career in the public sector with our 100% online MBA Public Sector Management.

 

The fundamental role of government

/in , /by

Throughout the twentieth century, many countries witnessed significant changes as the importance of the state grew and the role of the government evolved. In the wake of World War Two, nations the world over – Great Britain included – sought to rebuild in the aftermath of destruction, tackling the immense challenges facing industry, economy, infrastructure and society.

Now, in the 21st century, they continue to grow and evolve in both new and familiar ways. The pandemic saw national and federal governments enact stringent policies to contain the spread of COVID-19, the effects of which are still being felt by economies and communities.

What is the role of government?

The specific roles and functions of national governments vary depending on the political ideologies and societal characteristics of a given country. For starters, different governments will have various  approaches, priorities and orientations to the rule of law, including:

  • democracies
  • dictatorships
  • autocracies
  • oligarchies
  • constitutional governments.

Generally speaking, national and state governments are responsible for:

  • provision of public services and public goods – managing key expenditures to deliver healthcare, transportation, sanitation, education, development of infrastructure and much more.
  • economic regulation – ensuring economic stability, protecting consumers, upholding fair competition in the private sector, encouraging entrepreneurship and addressing deficits.
  • national defence – safeguarding the security and sovereignty of the country via national defence forces such as the UK Armed Forces.
  • law and order – keeping citizens safe by implementing and enforcing laws and security systems and establishing law enforcement bodies such as police forces.
  • protecting human rights – including individual rights and fundamental liberties such as freedom of religion or belief and freedom of speech.
  • international relations and diplomacy – upholding relations, partnerships, agreements and negotiations with other countries and nations.
  • protecting the environment – via policies which aim to tackle issues such as the climate crisis and environmental sustainability.
  • resource distribution – address economic disparities using wealth redistribution methods such as social welfare initiatives and tax revenues.

In the UK, there are various central government bodies and organisations, which have wide-ranging goals and remits. The range of their responsibilities and interests are broad, offering an insight into some of the critical aspects of society the government oversees.

In the UK, these include the:

  • Department for Business and Trade
  • Department for Culture, Media and Sport
  • Department for Education
  • Department for Energy and Net Zero
  • Department for Food, Environment and Rural Affairs
  • Department for Science, Innovation and Technology
  • Department for Work and Pensions
  • Department of Health and Social Care.

There is also local government, tasked with providing and managing vital services for populations and businesses in specific areas. Local government systems include schools, social and community care, housing, waste collection, business support and planning and licensing.

What is the difference between government and parliament?

According to the UK parliament website, ‘the government is responsible for deciding how the country is run and for managing things, day to day’ whereas ‘parliament is there to represent public interests and make sure they are taken into account by the government.’

The government is made up of the political party that wins the most seats at a general election, and consists of the prime minister, their cabinet, junior ministers, and non-political civil servants based in various government departments.

Parliament is formed of two Houses: the House of Commons and the House of Lords. Members of the Houses are eligible to speak on behalf of the public interest if they believe unfair treatment  has occurred or will occur at the hands of governmental agencies or departments. It is a requirement that government ministers attend parliament on a regular basis to engage in debates with other political parties, respond to issues, answer questions, and inform the Houses of important decisions.

What factors affect government?

A number of factors spanning political, economic and cultural contexts can all affect  government decisions at international, national and local levels.

Examples of factors that can influence and impact government include:

  • Political beliefs and ideologies, such as liberalism, conservatism, socialism and environmentalism, will influence how a government operates, the policies it develops and the areas it focuses on.
  • Economic climate, for example whether there’s high unemployment, a recession, inflation or slow economic growth, can significantly influence national budget expenditure and fiscal policies.
  • Public opinion, often expressed via polls, elections, protests and rallies, can impact governmental responses and actions.
  • Globalisation, which can impact international relations between governments, as well as issues such as trade, business and immigration.
  • Technology, in particular advancements, mean governments must take into account factors such as cybersecurity, data privacy and protection, and surveillance.
  • National demographics, from age to size to composition of a population, impact decisions made around aspects such as health provision, social services offerings, jobs and pensions.
  • Interest groups, who advocate on behalf of specific issues – such as the British Medical Association (BMA) lobbying the government to introduce the smoking ban in the interests of public health – can put pressure on policymakers and influence decisions and outcomes.
  • Legal frameworks, as well as constitutions, often dictate what governments can and can’t do in relation to the extent of rights and powers.

There are numerous other factors, including the country or nation’s historical context, the media, and world events – such as trade agreements, health crises and conflicts.

Develop the skills to manage challenges across the public and non-profit sectors

Want to learn more about the role of government in shaping public outcomes? Interested in a rewarding career that helps shape our shared future?

Advance your career – and make transformative, ongoing contributions to local communities – with the University of York’s online MBA Public Sector Management programme.

Develop as a socially responsible, ethical leader as you gain in-depth knowledge of how themes of diversity, sustainability and global citizenship shape our society. Your studies will combine key theoretical insights with real-world application, on a highly flexible, 100%-online course that fits around your lifestyle and career goals. You’ll explore core aspects of public administration and management, including operations management, strategy, financial management, ethical social leadership, global marketing, change management, policy analysis, public-private partnerships, and more.

Understanding the main components of government spending in the UK

/in , , /by

In the United Kingdom, government spending finances a wide range of public services, but it also plays an important role in the national economy, influencing its growth as well as its stability.

This is commonly known as Keynesian economics, a macroeconomic theory that was widely adopted after World War II, and advocates for government intervention in the economy – particularly during economic downturns. During the past century, Keynesian theory has helped shape UK fiscal policy, and today government spending includes several components including current and capital expenditure.

Areas of government spending

General government expenditure will typically fall into one of two broad categories:

  • Current expenditure, which covers day-to-day operational and administrative expenses. This spending is necessary to ensure the smooth functioning of public services and institutions.
  • Capital expenditure, which covers investments in assets, facilities, and infrastructure projects. This spending typically yields benefits over a longer period of time, and contributes to the improvement or expansion of public services.

Current expenditure examples

Essential public services

Public services are at the heart of UK society. These services range from healthcare and education, to law enforcement and defense. Some may be run by the central government, while others are organised through local governments and authorities. But all of them are made possible through government spending.

Social welfare programmes

Social security and welfare programmes are a significant area of current expenditure. These programmes provide vital support and social protection to people at different stages of their lives. For example, they fund statutory maternity benefits and state pensions, as well as unemployment benefits and housing assistance. 

These programmes can take many forms. For example, they may include in-person support, or they may be offered through financial support, such as subsidies, grants, or transfer payments that pay money directly to people, such as those who receive child benefits or a disability allowance.

Interest payments

Interest payments on government debt is another area of current expenditure. When the UK government borrows money to fund various projects and initiatives, it incurs interest obligations on this government deficit. 

Capital expenditure examples

Public investment in infrastructure

Government investment in infrastructure initiatives such as road construction, public transportation projects, and energy facilities, is crucial for stimulating economic growth. These projects create jobs, enhance productivity more widely, and improve the quality of life for the people of the UK.

Healthcare

Capital spending on healthcare is also significant, including investments in new hospitals, medical equipment and technology. These investments are essential for ensuring the long-term sustainability and efficiency of the healthcare system, as well as better health outcomes for UK residents.

Education

Capital expenditure in education includes building and renovating schools as well as providing educational resources and technology. 

How government funds are collected and allocated

When looking at public finances – both coming in and going out – governments have to balance public service requirements and allocations with responsible fiscal policy.

  • Taxation. The majority of government revenue is raised through taxation. For example, tax revenue sources can include a national income tax or corporation tax.
  • Inflation control. The government-owned Bank of England sets interest rates with the aim of managing inflation and keeping the cost of living stable. 
  • Forecasting. Accurate forecasting of government revenue and total expenditure is essential for prudent financial management. Economists and analysts use data and models to predict future economic activity, trends, and government finances, helping policymakers to make informed decisions. 
  • Prioritisation. The government works to prioritise its spending to address the most pressing needs first, and to achieve its policy objectives.

Looking at the bigger picture

When examining public expenditure, it can be helpful to consider public finances within a broader scope. For example, discussions about the UK’s public services are often mentioned alongside the UK’s gross domestic product (GDP), which represents the total economic output of the country.

Viewing government spending as a share of GDP – or specifically, a percentage of total GDP – provides insight into the scale and importance of the public sector within the economy. In the UK, this figure fluctuates each year – particularly during the COVID-19 pandemic – but has been recently hovering around 45%, highlighting the substantial role that the government plays in the country’s economy.

The UK government will also consider its place internationally and compare its public spending to other countries. 

“In per-person terms, the UK’s public spending is similar to that of Australia,” the UK Parliament explains in its August 2023 publication, Public spending: a brief introduction. “The UK is far from unusual in its spending among developed economies, either in the amount that it spends per person or relative to the size of its economy – its spending as a percentage of GDP is fairly typical amongst OECD (Organisation for Economic Co-operation and Development) members.”

However, it’s also important to look at the economy more generally and consider public finances within that context. For example, the UK is currently facing a number of financial challenges that could impact public finances:

“Post-Brexit uncertainty has declined somewhat due to the Windsor Framework agreement to resolve disputes around the Northern Ireland Protocol,” explains the International Monetary Fund (IMF) in a 2023 report. “Still, the economy faces several challenges. The post-pandemic recovery was disrupted by the sharp energy price shock due to Russia’s war in Ukraine; labour force participation has declined, mainly on account of rising long-term illness; and large policy rate increases – needed to arrest high and sticky inflation – have tightened financial conditions.”

Learn how to effectively manage financial resources and risks in the public sector

Advance your career in the public sector with the 100% online MBA Public Sector Management at the University of York. This flexible MBA programme has been designed for professionals in public and non-profit organisations who want to make a positive impact on improving public service provision and public life.

You will develop the skills and knowledge needed to shape and deliver effective public services, and move into more strategic roles in a wide range of public, non-profit and third sector organisations, with key modules in public finance, policy analysis, and public-private sector partnerships in public services.