See Figure 3. In the last four years TME as a proportion of GDP has also increased by 4 percentage
points from 37 per cent to 41 per cent. See Figure 4. This recent growth has taken place during relatively
strong economic conditions, suggesting the recent increase in spending reflects almost entirely a
structural change in spending, rather than cyclical effects.
Figure 3 - Total Managed Expenditure (£bn)Real TM E £billions 2005-06 price s3003253503754004254504755005255501987-88 1989-90 1991-92 1993-94 1995-96 1997-98 1999-00 2001-02 2003-04 2005-06Figure 4 - Total Managed Expenditure (%GDP)TME as a pe r ce nt of GDP32%34%36%38%40%42%44%46%1987-88 1989-90 1991-92 1993-94 1995-96 1997-98 1999-00 2001-02 2003-04 2005-063.2. Departmental spending
Spending Review 2004 sets out spending for the next three years and reflects the Governments priorities
of increasing spending on health, education, transport and overseas aid, as shown in Figure 5.Falling
unemployment and rising economic participation have allowed savings to be made in welfare spending.
A detailed a breakdown of all types of spending in real terms and as a proportion of GDP can be found at
the end of the paper, in Tables 1 and 2.