## sipea2024029

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### Health
- Assumption in the spending scenario: real growth of 3½ percent p/a all years to fund NHS Long-Term Workforce Plan.
- Staff note: funding at this growth rate, under the ambitious assumption that annual labor force productivity in the health system would grow by 1½–2 percent, would be sufficient to fund the Long-Term Workforce Plan.
- Implication: health spending rises by 1¾ ppts points of GDP between FY2025/26 and FY2034/35 (assumed in the spending scenario).
- Historical share: health spending is almost entirely (80–90 percent) funding for the NHS via DHSC and local government public health initiatives.

### Social Care
- Delivery: provided by local governments and is means tested (contrast to universal NHS).
- External estimate: UK Health Foundation (September 2023) estimated growth of 3½ percent per year in real terms over the next decade is needed to keep up with demand; 4.3 percent per year in real terms is needed to expand access.
- Scenario assumption: social care real growth of 4.3 percent p/a all years to meet demand and improve access (Health Foundation estimate).

### Housing
- Historical change: spending on housing and communities cut by 32 percent in real terms between FY2010/11 and FY2015/16; spending in FY2022/23 was 1.7 percent above the FY2010/11 level in real terms.
- Need estimate: National Housing Federation (2019) estimated an additional 145,000 social/affordable homes are needed per year; contributes to an estimated 380,000 new homes required per year to alleviate housing need of 3.9 million households over 15 years.
- Scenario assumption: annual real growth of 5 percent (2018–23 average) p/a to meet demand; constant in percent of GDP after FY2029/30.
- Historical note: spending on housing grew by an average annual amount of 11 percent in real terms during 2000-2010.

### Education
- Recent increases: education spending to around 4½ percent of GDP in FY2024/25, from 4 percent of GDP in FY2019/20.
- Scenario assumptions:
  - Maintain education spending at 4½ percent of GDP per year until FY2029/30.
  - Decline thereafter to 4 percent of GDP as ageing implies declining pupil numbers (UK DfE 2023 projections: 9 percent decline in total primary school student numbers in England by 2028; secondary student numbers begin to decline after 2025).
- Composition: primary and secondary schooling account for around 80 percent of education spending.
- Historical trend: funding per pupil in secondary and further/vocational education gradually declined between FY2010/11 and FY2019/20; sharper decline in higher education funding per pupil.

### State Pension and Other Welfare Benefits
- State Pension scenario:
  - Assumed to rise in line with OBR’s January 2024 projection, implying it will rise to around 150 billion pounds by FY2027/28.
  - Drivers: ageing population (working age to retired ratio declines from four-to-one to three-to-one by 2050, despite assumed steady-state net migration of 245,000), increase in State Pension age to 67 during 2026–28 (partly offsetting), and the Triple Lock (pension growth set to rate of average wage growth, assumed to exceed inflation and the 2.5 percent floor).
  - Result: state pension spending rises from 4.8 percent of GDP in FY2022/23 to 5.6 percent of GDP by FY2034/35.
- Other social protection: Other Social Protection (including benefits) assumed to rise with population growth and inflation in all years.

### Public Investment and the Green Transition (CDEL)
- Aggregate CDEL path in scenario:
  - CDEL real growth of 2 percent p/a to FY2029/30 then 1½–2 percent p/a thereafter.
  - Implies CDEL rising from around 3½ percent of GDP in FY2024/25 to around 3¾ percent of GDP by FY2034/35.
- Climate:
  - CCC Balanced Pathway to Net Zero implies annual public investment in green transition needs to increase by £5–10 billion by 2030.
  - Projected CDEL rises from £99 billion in FY2024/25 to £122 billion by FY2029/30, which could accommodate the above.
  - CCC Sixth Carbon Budget report recommends whole-of-economy investment in the green transition of £50 billion by 2030; staff assess a public contribution of around one third would be reasonable.
- Transport:
  - Recent increase in transport spending to 2 percent of GDP in FY2024/25 is assumed to be maintained to FY2029/30, then gradually decline; FY2028–23 average assumed at 1.8 percent of GDP.
  - This incorporates both RDEL and CDEL and could accommodate increased capital spending.
- Health and education capital: rise of CDEL could accommodate increased capital spending on health and education facilities, though precise amounts highly uncertain.

### Other Drivers and Functional Assumptions
- Defence: assumed to rise to 2½ percent of GDP per year (budget data: 2–2½ percent of GDP in FY2024/25).
- General Public Services: currently around 2¼ percent of GDP; assumed to maintain percent GDP until FY2028/29 then gradually return to FY2010–19 average of 0.6 percent of GDP, assuming Ukraine emergency resolved.
- Environmental Protection: maintain current percent GDP (0.4-0.5).
- Public Order & Safety: maintain 2010–19 average (percent GDP), except in high spending scenario where assumed to grow.
- Economic Affairs: return economic aid to 2010–19 average by FY2029/30; maintain others in percent GDP.
- Recreation, culture and religion: maintain in percent GDP.
- AME: rises with population growth and inflation on average over time; AME is 60 percent of total spending (including non-pension welfare).

### Table 1 — Scenario Aggregates (selected entries)
- RDEL real growth: 2 percent p/a to FY2029/30 then 1½–2 percent p/a.
- CDEL real growth: 2 percent p/a to FY2029/30 then 1½–2 percent p/a.
- Health: Real growth of 3½ percent p/a all years.
- Education: maintain at 4½ percent GDP until FY2029/30, then decline to 4 percent GDP.
- Social Care: Real growth of 4.3 percent p/a all years.
- Housing and Community Amenities: 5 percent real growth p/a to meet demand; constant in percent GDP after FY2029/30.

### Macro-Fiscal Implications
- Revenue projection: IMF staff baseline revenue projection (2024 Article IV Staff Report) implies revenue rises to 40.8 percent of GDP by FY2028/29 due to fiscal drag from frozen personal income tax thresholds; revenue projected to remain unchanged at this level between FY2028/29 and FY2034/35 for scenario purposes.
- Primary expenditure: declines over the ten-year projection horizon, consistent with AME spending declining as a share of GDP per staff baseline.
- Interest payments: rise gradually to 4¼ percent.
- Public Sector Net Borrowing (PSNB): declines to approximately 2 percent of GDP by FY2031/32, but falls no further.
- Public Sector Net Debt (PSND) (ex BoE): increases to 101.3 percent of GDP by FY2034/35 and does not stabilize over the ten-year horizon under the scenario.

### Fiscal Adjustment to Stabilize Debt
- Additional fiscal effort options: revenue-raising measures and spending reform (including indexation of pensions to cost of living instead of the Triple Lock) and efficiency gains via AI and digitalization.
- Modeling assumptions: additional fiscal effort modeled as higher revenue via uniform increase in elasticity of nominal revenue to GDP growth; partial equilibrium exercise (assumes no impact of fiscal effort on growth, inflation, interest rates, exchange rates except where feedback is later incorporated).
- Adjustment paths (Text Table 4 / Table 4):
  - Path 1 (50% prob. over 5-yrs): average annual excess public sector primary balance relative to staff’s baseline = 0.8 ppts. of GDP; debt level at end of horizon relative to staff’s baseline = -3.9; impact on level of real GDP by end of horizon = -1.7; additional annual fiscal adj. needed because of impact on real GDP = 0.3.
  - Path 2 (75% prob. over 5-yrs): average annual excess primary balance = 1.2 ppts. of GDP; debt level at end of horizon = -5.9; impact on level of real GDP = -2; additional annual fiscal adj. needed because of impact on real GDP = 0.4.
  - Path 3 (75% prob. over 10-yrs): average annual excess primary balance = 1.4 ppts. of GDP; debt level at end of horizon = -11.1; impact on level of real GDP = -2.1; additional annual fiscal adj. needed because of impact on real GDP = 0.23.
- Feedback effects: fiscal adjustment estimated to reduce level of real GDP by 1¾–2 ppts per year by FY2029/30, depending on stabilization probability. Incorporating lower output effects on revenues and GDP denominator raises required fiscal effort by an additional 0.35–0.4 ppts. of GDP per year approximately to stabilize debt within five years.
- Fiscal multiplier note: based on an impact fiscal multiplier of 0.4 for revenue measures, decaying to 0.3 in t+1 and 0.2 in t+2.

### High Spending Scenario (Annex II)
- Overall assumption: DEL (both RDEL and CDEL) rising by 3½ percent per year in real terms on average from FY2025/26 to FY2034/35; AME growing by population growth and inflation on average.
- Key differences from central scenario:
  - Education: maintain 4½ percent of GDP then increase gradually to around 5¼ percent of GDP by FY2029/30 (pre-GFC funding level).
  - Social Care: funding increases by 6 percent per year in real terms.
  - Public Order & Safety: grow by 3.8 percent (2000-2010 real growth rate), increasing from 1.6 percent of GDP currently to 2 percent of GDP by FY2034/35.
  - Housing: affordable housing spending rises by 11 percent per year in real terms until FY2029/30.
  - Environmental Protection: spending increases to accommodate higher green-transition spending than CCC Balanced Pathway.
- High Spending Scenario: fiscal outcomes
  - Primary spending rises throughout the ten-year horizon, reaching 42.4 percent of GDP by FY2034/35.
  - Public Sector Net Borrowing (PSNB) increases to 6½ percent of GDP by FY2034/35.
  - Public Sector Net Debt (PSND) (ex. BoE) rises to 124.7 percent of GDP by FY2034/35.
  - To stabilize public debt over a ten-year horizon, the primary balance would need to be higher by around 2.3 ppts. of GDP per year on average.

### Assumptions and functional spending drivers (TME FY2025/26 – FY2034/35)
- Aggregate spending (central vs high):
  - Central Scenario:
    - RDEL real growth of 2 percent p/a to FY2029/30 then 1½–2 percent p/a;
    - CDEL 2 percent p/a real growth to FY2029/30 then 1½–2 percent p/a;
    - AME rises with population growth and inflation on average over time;
  - High Spending Scenario:
    - RDEL real growth of approx. 3.5 percent p/a in all years;
    - CDEL real growth of approx. 3.5 percent p/a in all years;
    - AME rises with population growth and inflation on average over time.
- Functional expenditure assumptions — Main Drivers:
  - Health: Real growth of 3½ percent p/a all years to fund NHS workforce plan (both scenarios).
  - Education:
    - Central Scenario: maintain at 4½ percent GDP until FY2029/30, then decline to 4 percent GDP as student numbers fall.
    - High Spending Scenario: increase gradually over horizon to 5 ½–5¾ percent GDP (pre-GFC level).
  - Social Protection (Of which: State Pension): Increase in line with OBR 2023 MT estimates, adjusted for 1yr rise of retirement age FY2026/27 (both scenarios).
  - Social Care:
    - Central Scenario: Real growth of 4.3 percent p/a all years.
    - High Spending Scenario: Real growth of 6 percent p/a.
  - Other Social Protection (incl. benefits): Rise with population growth and inflation in all years (both scenarios).
  - Housing and Community Amenities:
    - Central Scenario: 5 percent real growth p/a to meet demand for social homes. Constant in percent of GDP after FY2029/30.
    - High Spending Scenario: 11 percent real growth p/a until FY2029/30, then average real growth of 3 percent p/a.
  - Transport:
    - Central Scenario: maintain at 2 percent GDP until FY2029/30, then at FY2028–23 average of 1.8 percent GDP.
    - High Spending Scenario: maintain at 2 percent GDP in all years.
  - Environmental Protection:
    - Central Scenario: maintain current percent GDP (0.4–0.5).
    - High Spending Scenario: increase to 0.6 percent GDP (2000–10 avge).
- Other Drivers:
  - Defence: 2½ percent GDP per year (both scenarios).
  - Public Order & Safety:
    - Central Scenario: maintain 2010–19 avge (percent GDP).
    - High Spending Scenario: increase real growth to 3.8 percent p/a.
  - General Public Services (including ODA and Ukraine aid): maintain percent GDP until FY2028/29 then gradually return to 2010–19 average (both scenarios).
  - Economic Affairs: return economic aid to 2010–19 avge by FY2029/30; other adjustments as above.
  - Recreation, culture and religion: Central Scenario maintain in percent GDP; High Spending Scenario increase to 2000–10 avge.
- Interest Payments: projected interest payments are consistent with the evolution of primary spending and debt in each scenario, computed using the IMF’s Debt Sustainability Analysis Tools.

### Methodology (Annex I)
- Data: functional breakdown of historical Total Managed Expenditure (TME) from Public Expenditure Statistical Analyses (PESA), HMT (July 2023).
- Functional classification based on OECD CoFOG; spending in each area sums to Public Sector Expenditure on Services (PSES), which differs from TME by an accounting adjustment including depreciation.
- Functional notes:
  - Social protection includes state pension, other cash benefits, and benefits in kind such as social care.
  - Education budget includes early childhood, primary, secondary, tertiary.
  - Transport includes road, rail, public transport.
  - Environmental protection captures some Department for Energy Security and Net Zero spending, including recent economic assistance during Energy Price Crisis.

*Source: IMF — Selected Issues Paper (sipea2024029) — United Kingdom fiscal spending scenarios and macro-fiscal implications.*

### 3.6 percent per year from FY1949–50 to FY2022–23, although only 2.4 percent since 2009), woul

### sipea2024029 - 3.6 percent per year from FY1949–50 to FY2022–23, although only 2.4 percent since 2009), woul

### Health
- Assumption in the spending scenario: real growth of 3½ percent p/a all years to fund NHS Long-Term Workforce Plan.
- Staff note: funding at this growth rate, under the ambitious assumption that annual labor force productivity in the health system would grow by 1½–2 percent, would be sufficient to fund the Long-Term Workforce Plan.
- Implication: health spending rises by 1¾ ppts points of GDP between FY2025/26 and FY2034/35 (assumed in the spending scenario).
- Historical share: health spending is almost entirely (80–90 percent) funding for the NHS via DHSC and local government public health initiatives.

### Social Care
- Delivery: provided by local governments and is means tested (contrast to universal NHS).
- External estimate: UK Health Foundation (September 2023) estimated growth of 3½ percent per year in real terms over the next decade is needed to keep up with demand; 4.3 percent per year in real terms is needed to expand access.
- Scenario assumption: social care real growth of 4.3 percent p/a all years to meet demand and improve access (Health Foundation estimate).

### Housing
- Historical change: spending on housing and communities cut by 32 percent in real terms between FY2010/11 and FY2015/16; spending in FY2022/23 was 1.7 percent above the FY2010/11 level in real terms.
- Need estimate: National Housing Federation (2019) estimated an additional 145,000 social/affordable homes are needed per year; contributes to an estimated 380,000 new homes required per year to alleviate housing need of 3.9 million households over 15 years.
- Scenario assumption: annual real growth of 5 percent (2018–23 average) p/a to meet demand; constant in percent of GDP after FY2029/30.
- Historical note: spending on housing grew by an average annual amount of 11 percent in real terms during 2000-2010.

### Education
- Recent increases: education spending to around 4½ percent of GDP in FY2024/25, from 4 percent of GDP in FY2019/20.
- Scenario assumptions:
  - Maintain education spending at 4½ percent of GDP per year until FY2029/30.
  - Decline thereafter to 4 percent of GDP as ageing implies declining pupil numbers (UK DfE 2023 projections: 9 percent decline in total primary school student numbers in England by 2028; secondary student numbers begin to decline after 2025).
- Composition: primary and secondary schooling account for around 80 percent of education spending.
- Historical trend: funding per pupil in secondary and further/vocational education gradually declined between FY2010/11 and FY2019/20; sharper decline in higher education funding per pupil.

### State Pension and Other Welfare Benefits
- Scenario for State Pension:
  - Assumed to rise in line with OBR’s January 2024 projection, implying it will rise to around 150 billion pounds by FY2027/28.
  - Drivers considered: ageing population (working age to retired ratio declines from four-to-one to three-to-one by 2050, despite assumed steady-state net migration of 245,000), increase in State Pension age to 67 during 2026–28 (partly offsetting), and the Triple Lock (pension growth set to rate of average wage growth, assumed to exceed inflation and the 2.5 percent floor).
  - Result: state pension spending rises from 4.8 percent of GDP in FY2022/23 to 5.6 percent of GDP by FY2034/35.
- Other social protection:
  - Other Social Protection (including benefits) assumed to rise with population growth and inflation in all years.

### Public Investment and the Green Transition (CDEL)
- Aggregate CDEL path in scenario:
  - CDEL real growth of 2 percent p/a to FY2029/30 then 1½–2 percent p/a thereafter.
  - Implies CDEL rising from around 3½ percent of GDP in FY2024/25 to around 3¾ percent of GDP by FY2034/35.
- Climate:
  - CCC Balanced Pathway to Net Zero implies annual public investment in green transition needs to increase by £5–10 billion by 2030.
  - Projected CDEL rises from £99 billion in FY2024/25 to £122 billion by FY2029/30, which could accommodate the above.
  - CCC Sixth Carbon Budget report recommends whole-of-economy investment in the green transition of £50 billion by 2030; staff assess a public contribution of around one third would be reasonable.
- Transport:
  - Recent increase in transport spending to 2 percent of GDP in FY2024/25 is assumed to be maintained to FY2029/30, then gradually decline; FY2028–23 average assumed at 1.8 percent of GDP.
  - This incorporates both RDEL and CDEL and could accommodate increased capital spending.
- Health and education capital: rise of CDEL could accommodate increased capital spending on health and education facilities, though precise amounts highly uncertain.

### Other Drivers and Functional Assumptions
- Defence: assumed to rise to 2½ percent of GDP per year (budget data: 2–2½ percent of GDP in FY2024/25).
- General Public Services: currently around 2¼ percent of GDP; assumed to maintain percent GDP until FY2028/29 then gradually return to FY2010–19 average of 0.6 percent of GDP, assuming Ukraine emergency resolved.
- Environmental Protection: maintain current percent GDP (0.4-0.5).
- Public Order & Safety: maintain 2010–19 average (percent GDP), except in high spending scenario where assumed to grow.
- Economic Affairs: return economic aid to 2010–19 average by FY2029/30; maintain others in percent GDP.
- Recreation, culture and religion: maintain in percent GDP.
- AME: rises with population growth and inflation on average over time; AME is 60 percent of total spending (including non-pension welfare).

### Table 1 — Scenario Aggregates (selected entries)
- RDEL real growth: 2 percent p/a to FY2029/30 then 1½–2 percent p/a.
- CDEL real growth: 2 percent p/a to FY2029/30 then 1½–2 percent p/a.
- Health: Real growth of 3½ percent p/a all years.
- Education: maintain at 4½ percent GDP until FY2029/30, then decline to 4 percent GDP.
- Social Care: Real growth of 4.3 percent p/a all years.
- Housing and Community Amenities: 5 percent real growth p/a to meet demand; constant in percent GDP after FY2029/30.

### Macro-Fiscal Implications
- Revenue projection: IMF staff baseline revenue projection (2024 Article IV Staff Report) implies revenue rises to 40.8 percent of GDP by FY2028/29 due to fiscal drag from frozen personal income tax thresholds; revenue projected to remain unchanged at this level between FY2028/29 and FY2034/35 for scenario purposes.
- Primary expenditure: declines over the ten-year projection horizon, consistent with AME spending declining as a share of GDP per staff baseline.
- Interest payments: rise gradually to 4¼ percent.
- Public Sector Net Borrowing (PSNB): declines to approximately 2 percent of GDP by FY2031/32, but falls no further.
- Public Sector Net Debt (PSND) (ex BoE): increases to 101.3 percent of GDP by FY2034/35 and does not stabilize over the ten-year horizon under the scenario.

### Fiscal Adjustment to Stabilize Debt
- Additional fiscal effort required could involve revenue-raising measures and spending reform (including indexation of pensions to cost of living instead of the Triple Lock) and efficiency gains via AI and digitalization.
- Modeling assumptions: additional fiscal effort modeled as higher revenue via uniform increase in elasticity of nominal revenue to GDP growth; partial equilibrium exercise (assumes no impact of fiscal effort on growth, inflation, interest rates, exchange rates except where feedback is later incorporated).
- Adjustment paths (Text Table 4 / Table 4):
  - Path 1 (50% prob. over 5-yrs): average annual excess public sector primary balance relative to staff’s baseline = 0.8 ppts. of GDP; debt level at end of horizon relative to staff’s baseline = -3.9; impact on level of real GDP by end of horizon = -1.7; additional annual fiscal adj. needed because of impact on real GDP = 0.3.
  - Path 2 (75% prob. over 5-yrs): average annual excess primary balance = 1.2 ppts. of GDP; debt level at end of horizon = -5.9; impact on level of real GDP = -2; additional annual fiscal adj. needed because of impact on real GDP = 0.4.
  - Path 3 (75% prob. over 10-yrs): average annual excess primary balance = 1.4 ppts. of GDP; debt level at end of horizon = -11.1; impact on level of real GDP = -2.1; additional annual fiscal adj. needed because of impact on real GDP = 0.23.
- Feedback effects: fiscal adjustment estimated to reduce level of real GDP by 1¾–2 ppts per year by FY2029/30, depending on stabilization probability. Incorporating lower output effects on revenues and GDP denominator raises required fiscal effort by an additional 0.35–0.4 ppts. of GDP per year approximately to stabilize debt within five years.
- Fiscal multiplier note: based on an impact fiscal multiplier of 0.4 for revenue measures, decaying to 0.3 in t+1 and 0.2 in t+2.

### High Spending Scenario (Annex II)
- Overall assumption: DEL (both RDEL and CDEL) rising by 3½ percent per year in real terms on average from FY2025/26 to FY2034/35; AME growing by population growth and inflation on average.
- Key differences from central scenario:
  - Education: maintain 4½ percent of GDP then increase gradually to around 5¼ percent of GDP by FY2029/30 (pre-GFC funding level).
  - Social Care: funding increases by 6 percent per year in real terms.
  - Public Order & Safety: grow by 3.8 percent (2000-2010 real growth rate), increasing from 1.6 percent of GDP currently to 2 percent of GDP by FY2034/35.
  - Housing: affordable housing spending rises by 11 percent per year in real terms until FY2029/30.
  - Environmental Protection: spending increases to accommodate higher green-transition spending than CCC Balanced Pathway.

### Methodology (Annex I)
- Data: functional breakdown of historical Total Managed Expenditure (TME) from Public Expenditure Statistical Analyses (PESA), HMT (July 2023).
- Functional classification based on OECD CoFOG; spending in each area sums to Public Sector Expenditure on Services (PSES), which differs from TME by an accounting adjustment including depreciation.
- Functional notes:
  - Social protection includes state pension, other cash benefits, and benefits in kind such as social care.
  - Education budget includes early childhood, primary, secondary, tertiary.
  - Transport includes road, rail, public transport.
  - Environmental protection captures some Department for Energy Security and Net Zero spending, including recent economic assistance during Energy Price Crisis.

*Source: IMF — Selected Issues Paper (sipea2024029) — United Kingdom fiscal spending scenarios and macro-fiscal implications.*

### 0.6 percent of GDP per year (the 2000–10 average).

### sipea2024029 - 0.6 percent of GDP per year (the 2000–10 average).

### High Spending Scenario: fiscal outcomes
- Primary spending rises throughout the ten-year horizon, reaching 42.4 percent of GDP by FY2034/35.
- Public Sector Net Borrowing (PSNB) increases to 6½ percent of GDP by FY2034/35.
- Public Sector Net Debt (PSND) (ex. BoE) rises to 124.7 percent of GDP by FY2034/35.
- To stabilize public debt over a ten-year horizon, the primary balance would need to be higher by around 2.3 ppts. of GDP per year on average.

### Assumptions and functional spending drivers (TME FY2025/26 – FY2034/35)
- Aggregate spending (consistent with functional assumptions below):
  - Central Scenario:
    - RDEL real growth of 2 percent p/a to FY2029/30 then 1½–2 percent p/a;
    - CDEL 2 percent p/a real growth to FY2029/30 then 1½–2 percent p/a;
    - AME rises with population growth and inflation on average over time;
  - High Spending Scenario:
    - RDEL real growth of approx. 3.5 percent p/a in all years;
    - CDEL real growth of approx. 3.5 percent p/a in all years;
    - AME rises with population growth and inflation on average over time.
- Functional expenditure assumptions — Main Drivers:
  - Health:
    - Real growth of 3½ percent p/a all years to fund NHS workforce plan (both scenarios).
  - Education:
    - Central Scenario: Following recent increases, maintain at 4½ percent GDP until FY2029/30, then decline to 4 percent GDP as student numbers fall.
    - High Spending Scenario: Increase gradually over horizon to 5 ½–5¾ percent GDP (pre-GFC level).
  - Social Protection (Of which: State Pension):
    - Increase in line with OBR 2023 MT estimates, adjusted for 1yr rise of retirement age FY2026/27 (both scenarios).
  - Social Care:
    - Central Scenario: Real growth of 4.3 percent p/a all years to meet demand & improve access (Health Foundation est.).
    - High Spending Scenario: Real growth of 6 percent p/a to meet demand and fully cover user costs.
  - Other Social Protection (incl. benefits):
    - Rise with population growth and inflation in all years (both scenarios).
  - Housing and Community Amenities:
    - Central Scenario: 5 percent real growth (2028–23 avge) p/a to meet demand for social homes. Constant in percent of GDP after FY2029/30.
    - High Spending Scenario: 11 percent real growth p/a (pre-GFC average) to meet demand for social homes, until FY2029/30, then average real growth of 3 percent p/a.
  - Transport:
    - Central Scenario: After recent increases, maintain at 2 percent GDP until FY2029/30, then at FY2028–23 average of 1.8 percent GDP.
    - High Spending Scenario: After recent increases, maintain at 2 percent GDP in all years.
  - Environmental Protection:
    - Central Scenario: Maintain current percent GDP (0.4–0.5).
    - High Spending Scenario: Increase to 0.6 percent GDP (2000–10 avge).
- Other Drivers:
  - Defence: 2½ percent GDP per year (both scenarios).
  - Public Order & Safety:
    - Central Scenario: Maintain 2010–19 avge (percent GDP).
    - High Spending Scenario: Increase real growth to 3.8 percent p/a, average of past 5 years and 2000–10 average, including capital spending.
  - General Public Services (including ODA and Ukraine aid): Maintain percent GDP until FY2028/29 then gradually return to 2010–19 average (both scenarios).
  - Economic Affairs (including Sc. & Tech; Economic Aid (energy crisis); agriculture & fisheries):
    - Central Scenario: Return economic aid to 2010–19 avge by FY2029/30; maintain others in percent GDP.
    - High Spending Scenario: Return economic aid to 2010–19 avge by FY2029/30; increase ag. & fisheries spending to 2000–10 avge; maintain others in percent GDP.
  - Recreation, culture and religion:
    - Central Scenario: Maintain in percent GDP.
    - High Spending Scenario: Increase to 2000–10 avge.
- Interest Payments:
  - Projected interest payments are consistent with the evolution of primary spending and debt in each scenario, computed using the IMF’s Debt Sustainability Analysis Tools.

### Tables and projections referenced
- Table II.1. United Kingdom: Assumptions: Scenarios for TME FY2025/26 – FY2034/35 (Central Scenario / High Spending Scenario) — functional and other drivers as summarized above.
- Table II.2. United Kingdom: High-Spending Scenario—Detailed Spending Projections by Function.
- Table II.3. United Kingdom: High-Spending Scenario—Implications for Fiscal Aggregates.

*Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2024/english/sipea2024029.pdf*

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_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2024/english/sipea2024029.pdf_