what does the government spend money on?

Now, I’m not an accountant and I’m not a statistician and personally I don’t have a political axe to grind, I just want some answers to this question that make sense.

This attitude gives me a lot of freedom: I don’t have to get bogged down in any system of understanding spending unless it really helps. But this attitude also gives me a lot of opportunity to look a right idiot, because I’m effectively feeling my way around this unfamiliar financial and political world, pushing for information that may or may not be useful in the end, asking questions that must seem really stupid to experts.

I think it’s only fair that I document my fools progress so that other people who might be on a similar mission can be helped along their way.

So, from the beginning to right now, this is what I’ve found out about government money.

I should add that public spending is making more and more sense to me these days and while I don’t have all the answers right now, I do have a vision for the future and some useful stuff to share.

In the beginning

When I first thought about government spending I had some vague idea that there would be lists of spending, one for each department or maybe one big list for all of government, showing money in and money out for each department. It would just be a matter of finding these sacred and quite possibly hidden lists. I mean someone in the department must be keeping track of the money in and out, right?

The people at Where Does My Money Go? had something that matched my idea of a list of spending. The list they found on the Treasury website showed different government departments and how much they had spent on certain types of public services. I helped to interpret this and the team went on to make this colourful interactive display.

The beauty of this display is allows drilling down into the details of the spending. This is a relatively new technology and lends itself to spending data nicely, it makes those lists accessible and it doesn’t feel like work to look through them they way it does to look into a spreadsheet.

But we quickly found that the list we had used raised more questions than it answered. We only had spending for certain departments, nothing in detail on local councils, and the only details we had were in these odd sounding categories of spending that were designed to allow comparisons between UN countries.

I had a feeling that there must be more detail that we weren’t getting, but where was it?

Therein’ I pestered the heck out of the poor folks at the Treasury about where these spending lists are stored and what else is stored there.

The short answer is that it was all stored in something aptly called COINS, which is a database for frequently revised budgets and something else that is really, really interesting and that I’ll come back to shortly.

A moment of clarity

While I was looking at this spending it slowly dawned on me that just looking at money in and out isn’t the full story of the way public money is managed. For one thing the lists of money in and out, on their own, soon become unwieldy and make it hard for people to answer questions about public spending.

For another thing, Governments don’t just receive and spend money, their wealth is also made up of the things they own like buildings, roads and also determined by the money they owe — the debts as we all know too well.

This is when I found out that accountants have elegant ways to deal with all of this financial jumble.

Let me explain accountancy in the terms I’ve come to understand it.

There are three main figures to consider.

Let’s split the finances of an organisation into either 1) something it is owed or owns and 2) something it owes to someone else. That is two of the 3 main figures explained already.

Just these two figures can give us a simple but important measure of how healthy the finances are. Hypothetically if the organisation received everything it was owed and then sold off everything it has and used that to pay off all its debts, how much would be left? What is left is our third figure. This is what all the people who invested in the organisation would be left with for their return on their investment.

For the mathematically minded this can be expressed at:

1 – 2 = 3 or owed and owned – debts = return to investors

We should find that if we sum the amount of money that people invest and the profit the organisation makes, the result is equal to the third figure.

Just to put this into context for the case where the organisation is a council or government body, the investors are the taxpayers and the bond buyers.

Another way of looking at these three figures is that organisation is ultimately balancing the money it has for its activities and the money it receives and borrows to make its activities happen. So it balances what it owns and is owed (figure 1) with its debts and investments and profits (figures 2 and 3).

For the mathematically minded that is:

2 + 3 = 1 or investment and profits + debts = owned and owed

just a rearrangement of first expression.

If you ever heard of double entry book-keeping then keeping this equation equal is basically it: accounting for what is produced with what is needed to produce it.

There’s lots more to accounting than this, obviously, but I hope I’ve conveyed that this way of categorising financial information is neat and yields useful information.

Here’s the killer

You might ask: wouldn’t it be ideal if each publicly funded body published their accounts under these categories so we can understand their financial health?

It turns out that the government have been producing resource accounts for every department and every local authority for years, and this is the killer: in 2001, yes, 10 years ago, they even produced a guide to interpreting these accounts so that we, the public, can extract all kinds of useful information.

You might ask: wouldn’t it be ideal if someone collected together all the public accounts? Even better if they summed the accounts into one set by eliminating all double counting where public bodies exchange money between themselves.

It seems that at the same time as the resource accounts started to emerge in the early 2000s, the Treasury started to run something called ‘Whole of Government Accounts’. It brings together, or consolidates, all the resource accounts of pretty much every public body into one set of resource accounts. What a perfect way to categorise all public spending at a high level.

Guess where Whole of Government Accounts is stored? In COINS. Disappointingly when COINS was published all of the Whole of Government Accounts was removed. The Treasury plan to publish the first ever version of Whole of Government Accounts this spring.

The vision for the future

The government is currently publishing more spending information than any of their predecessors. We have all central government spending over £25,000 and soon we’ll have all local government spending over £500.

How do we make some sense out of all this spending data?

Lots of information can be made manageable if it can be categorised well.

I’m interested in using the categorisation system in the resource accounts. According to the introduction to resource accounts, it is possible to calculate departmental costs ranging from staff wages to money spent on programmes with their own objectives, as well as lots of useful information about assets and liabilities (what I referred to as figures 1 and 2 above).

I believe using this accounting system and allowing a user to ‘drill down’, as they currently do in Where Does My Money Go?, from this high level organised system into the details of the spending will give ‘accountability’ to the accounts.

There are many difficulties in data compatibility between the resource accounts and the lists of transactions that are currently being published, but I think with some iterations of the data being published, these difficulties could be overcome.

What do you think?

This has involved a huge amount of work, completely rebuilding the application from the ground up – from the datastore to the dashboard.

Some highlights:

• A complete reworking of the interactive dashboard, with a new version of our flagship financial bubbles visualisation, and new ways to comment on and share what you find.
• An interactive tax calculator, showing where your taxes get spent.
• A clean new design for the whole site.
• An updated and improved datastore with lots of new features including a richer domain model, faceted searching, and integrated graphs.
• Boxfresh new data, with UK government spending up till 2009 (2011 if you count projections!).
• A new Q&A forum where you can ask and answer questions related to spending and where your tax goes.

Next comes phase 3 – and we discuss what that means for Where Does My Money Go below.

A new look for financial bubbles

Our flagship visualisation shows UK government spending by area, using a clicky, bouncy, zoomy bubble diagram that’s fun to play with.

Our first version was very simple: the latest version builds on the full expertise of design house Iconomical and David McCandless of Information is Beautiful. Here are the results:

Shiny! It’s fresher and cleaner, with friendly icons, designed by David (himself a bit of an icon in the visualisation field).

Unlike the first version, which was standalone Flash, the visualisation is now part of a webpage, and each view of the data has its own unique URL.

So it’s now easier to share and comment on spending, using social media. If you’re interested in, say, the fact that last year the UK spent four times as much on ‘old age’ as on ‘family & children’…

… you can now leave comments on this view of the data, or share the view in Twitter and Facebook. Coming soon: the ability to embed the visualisation in your own page, in an iframe.

Our regional and time-series visualisations stay in place, also with social links and unique URLs: and finally, you can also now compare regional differences in spending.

And finally, a small but significant change. You can now navigate from the visualisation to the underlying data. This will become more useful as the data UI improves – but I’m getting ahead of myself.

Where your tax gets spent: Daily Bread

One of the original aims for Where Does My Money Go was to make government spending feel more real and more personal.

We decided that one of the best ways to achieve this would be through tax. This is because tax is universal, and all too easy to evaluate in real terms.

To paraphrase, rather tastelessly: a million pounds is a statistic, but ten pounds is a pizza.

There are plenty of politically motivated tax calculators out there, but we realised that Where Does My Money Go could do something unique. We could show you, in an elegant, non-partisan way, how much of your daily tax goes to health, how much to education, how much to defence.

Again, Iconomical and David brought their wizardry to bear, and here’s the results.

How did we calculate the tax numbers? Following discussion on our Ask site, we used Treasury figures for the total tax paid by households in each income decile, including indirect taxes like VAT and fuel duty.

When you enter your income, we figure out which decile you’re in, and then your tax proportionally. This calculation (with more details) is available through our API.

Obviously, there’s some handwaving here: individuals are different from households; VAT will vary with what you buy; and precise allocation of spending is always metaphorical.

But we believe this is about as meaningful as these things get. We work out how much tax you pay to central government: and we know where central government revenues (which are almost entirely tax) go.

Again, you can link to individual views of the data: here’s the breakdown for someone who earns £144,000 a year, slightly more than David Cameron.

Data updates

We’ve also made some substantial improvements to the datastore. These include:

• Search: You can now search all the data in the datastore, for a supplier name or phrase, and get results quickly. And you can refine your search results quickly for a particular supplier – see the screenshot below.
• Payments visualised over time: For each search result and each supplier, we also show a graph of payments over time. The screenshot below shows payments to Capita.
• Data: We’ve loaded the latest Treasury data (CRA 2010), which shows actual spending up until 2009. A few weeks ago, we also added central government spending over £25k.
• Technical improvements: The datastore now runs off an OLAP domain model – and we’re currently upgrading it even further to use Mongo. Both increase its power and flexibility.
• Comments: And finally, you can now comment on individual entries in the datastore.

For those who aren’t sure what the datastore is – it’s the site that drives the visualisations. Currently, that’s pretty much all it does, but we have ambitions to make it much more usable and powerful.

What next for WDMMG?

So, that was phase 2 of Where Does My Money Go. We hope you like it.

What next? Broadly, we know that phase 3 will involve making the site easier to use, and getting more people involved.

Last week, we started to outline the priorities for this phase, and we decided that they included:

• Datastore: UI improvements so it’s easier to search the data, and the ability to annotate items of spending with information.
• Crowdsourcing: Expanding our potential dataset by allowing users to add spending items.
• International work: Working with initiatives in other countries to map budget data, making our tools more resuable in the process.

But we need your views, on phase 2, phase 3 and on the future: please sign up for our discussion list to join the conversation.

Exciting stuff – the current government came to power promising a new era of open data, and this is probably its most significant release so far. The papers today are full of scandalous tales of £170,000 on bottled mineral water, but the real stories are still buried deep in the data.

Here at Where Does My Money Go, we were lucky enough to be given early access to the data. Rufus and I have spent a few days loading it into our data store, and we’ve made 150 raw CSV files and 200,000 spending items into something you can search and explore online.

A map of government spending

So what can you do with the data store?

Firstly, you can simply search it – here’s all payments made to IT supplier Atos Origin, for example. The data begins on 12th May 2010, so we learn that since then, 613 separate payments have been made.

On search results, we calculate the total spending for those results, draw atimeline of payments, and show which departments spent most.

Since outsourcing is clearly the business to be in, let’s check out Capita:

Capita has received a remarkable £3.35 billion, just in the five months since May 2010! (To put this in context, we know from our spending visualizations that we spent £5 billion on primary education in the whole of 2009.)

We’ve also created an individual page for each spending item, showing all the information we have about it from the files released today. The Capita figures include a huge single payment of more than £600 million, so let’s check that out.

Ah, pensions. As you can see, we’ve added the ability to make one-click Freedom of Information requests about individual items. If you click the button, it’ll take you straight to a page on WhatDoTheyKnow, pre-populated with all the information you need to make an FOI request.

That’s because spending items by themselves don’t always tell the whole story. This isn’t the gold itself: it’s just a map of where the gold might be.

Here be dragons

This is genuinely exciting data, and it can’t have been an easy task for the Cabinet Office to get it out of departments – we’re thrilled to have it.

Departments are clearly still learning how to release data in standard formats. But the fact that I’ve just spent an hour writing Python to convert 40416 into 26/8/2010 (yay, Excel serial numbers) doesn’t dim my happiness.

That said, there are some additions and changes we’d really like to see in future releases.

• Unique identifiers. Suppliers have an exciting variety of names in this data, because different departments call them different things: Arval, Arval UK Ltd, Arval (UK) Ltd… If the data consistently included unique VAT registration numbers, it would be much easier to analyse, and to link it with other datasets, like Companies Open House. And that’s where it’s going to get really interesting.
• Consistent classifications. The data tells us the general area of spending for each item – ‘Legal Services’ or ‘Overseas Subsistence’. However, these aren’t used consistently across departments. That’s why we haven’t visualized spending in different areas (yet) – it was just too hard to compare.
• Redaction. Departments are allowed to remove items that should not be released under the Freedom of Information Act. This is legal and sensible. However, FOIA is vague, and we don’t know when items have been removed. The Local Public Data Panel warned councils that redactions should be (a) very rare and (b) justifiable. We think it’s very important that the Treasury’s guidance to departments say the same thing.

Go forth and explore

So here we have it: (almost) all spending above £25,000, opened up for the first time. Quite a day.

Here at Where Does My Money Go, we think spending data is exciting because it shows us what the big, sprawling, confusing thing called government actually does. Today, finding out got a whole lot easier.

Just browsing the data is instantly intriguing: why are we giving money to News International? What about 04 Bras Limited? And who even knew there was an International Potato Center?

But the real power of this data will become clear in the months to come, as developers and researchers – you? – start to link it to other information, like the magisterial OpenlyLocal and the exciting WhosLobbying. Please make use of our API and loading scripts to do so.

Finally, we know that our data explorer needs to become clearer and less buggy. We’ll be working on this in the coming weeks, and if you have any suggestions, please get in touch.

25k Departmental Spending Data in the Where Does My Money Go? Data Store

As a sample of the things you can find here are some examples of what you can find:

• Spending with Capita
• Spending by the Ministry of Defence

• Explorer: http://rufuspollock.org/wdmmg/explorer.html
• Source: http://bitbucket.org/okfn/wdmmg-js/src/tip/src/explorer.html

Warning: won’t work in IE (atm due to lack of svg support) and works best (i.e. fastest) in Chrome!

I’d be interested in any feedback and any suggestions for experience with protovis or any other javascript libraries (I’ve also used flot and thejit a bit). In particular one thing a bit lacking currently in protovis is any animation (something that’s goodin thejit …).

Features:

• True ‘explorer’: you can choose any set of breakdown ‘keys’ to visualize
• Primary ‘financial bubbles’ view with interactive navigation into bubbles
  • Support for arbitrary depth of data ‘tree’ so you can keep navigating down (though currently limited by user interface to select at most 3 levels)
• Multiple other visualizations including treemap, sunburst, dendrogram and ‘icicle’
• Time support
• View the source data in table or as json

I’m sure there’s tons to improve especially on the usability (e.g. should default labels have amounts in them?) so if you take a look please let me know any feedback.

Some specific limitations:

• Does not work in IE — but hope to fix this using svg.js soon
• Colours and general ‘look’ could be improved — help wanted!
• Occasional bugs e.g. weird redraws — if you find one please let me know

We’ve been working with Publish What You Fund and the Department for International Development (DfID) to visualise aid spending from 2004-2009, by region and international agency, using existing data.

This is a work in progress but we’re really delighted to have got these pages together in time for today. We’ll be adding new data when it becomes available next month with the annual publication of Statistics on International Development as well as integrating the information more into the site where possible.

Do let us know your thoughts.

It is the ‘somewhere’ we’ve been looking into recently — we’ve been investigating the stage where the money leaves the government hands, who benefits and in what way?

The Treasury devoted some resource to answering this exact question.

The Treasury Data

The data set the Treasury have is called the Country Regional Analysis (CRA). We’ve collected all years of this report back to 2005 in a CKAN package.

How the data is gathered

Every year the Treasury gather the CRA data by giving each central government department a spreadsheet. There is an example CRA spreadsheet on the CRA page.

You can see that the Treasury fill the spreadsheet with the department’s spending codes (programme object group) from COINS. The department is then asked to work out which regions, in the country, benefited from each of their spending codes.

The regions are quite crude, the whole of England is split into 9 regions and then there is the option of Northern Ireland, Scotland and Wales.

There is also an option for everyone in the world befits, this is called Non-ID.

Some of the ways of tracing the funds are easy, say, if there is a spending code for a local initiative that people from only one region are entitled to.

A more complex analysis would be something like if there is a spending code for a museum that people travel from all over the country to see, then a statistician is called upon, and they will determine which parts of the country benefit from this service, probably based on visitor surveys etc.

How to get something useful out of the CRA

The 2009 CRA data had lots of inconsistent use of classification of the spending. The classification of spending used in the CRA is the the United Nations system called Classification of the Functions of Government (COFOG). In CRA 2009 some items of spending has only one level of detail in COFOG and most other lines had two levels of detail of COFOG. To be consistent we attempted to get all lines of spending to have the most detailed level of spending. We wrote scripts to fix many of these problems.

The 2010 CRA is much better but still requires some work. The 2010 CRA comes in two sets. Both sets describe the same spending, it is just one (called table 9) describes the areas the money was spent in more detail, and the other data set (called table 10) describes the type of spending in more detail.

Table 9 and 10 have to following fields in common:

• Department code
• Department name
• COFOG level 1
• HMT Functional Classification
• Programme Object Groups
• Programme Object Group alias
• ID and non ID
• CAP or CUR
• spending for dates 2004-05 to 2009-10

when we find a match between table 9 data and table 10 data for the fields above then we need to give it:

the NUTS 1 region code and spending for 2010-11 from table 9

and the ‘CG LG or PC’, COFOG 2 and HMT subfunction class from value from table 10

Then the full detail of the spending in one line.

When this join is done, there is one more problem to fix with the data. This issue all stems from the fact that local authorities do not have programme object groups.

We think the best solution is to replace the ‘dummy sprog …’ programme object group that is used in the CRA for local authority spending, with something like ‘Local Authority Spending’ rather than using ‘Unknown’.

What we have done with the CRA

We, at ‘Where Does My Money Go?’ have used the Treasury’s data for this display: But I’m sure there are many more uses to be had.

What interests me about the climate change issue are the two competing requirements: on the one hand we have to provide affordable energy to meet an increasing energy demand as the population grows, on the other hand we have to dramatically reduce our carbon emissions (by 80% on 1990 levels by 2050) as set in the 2008 Climate Change Act.

The competition arises from the fact that the technologies that tend to emit carbon in the greatest levels are currently the most affordable and cost effective.

Unless there is a dramatic improvement in the cost effectiveness of low carbon energy sources or a dramatic reduction in the energy used then requirement 1 and 2 will conflict to a greater and greater degree in the next 40 years.

I’m not the only one who sees trouble ahead.

Last week the Department for Energy and Climate Change presented the public with an open source tool, which aims to show the effect of tweaking the supply and demand aspects of our energy system, and the effects this will have on our carbon emissions.

The tool is a carbon calculator that looks like this:

Once you have tweaked to get Britain the right carbon reduction and energy supply for 2050, and your happy with the results, there is a public consultation you can complete to let the government know.

The tool shows what is physically possible.

It does not show, within what is physically possible, what is economically possible. That is the next step.

I’ve been doing some research into the cost of energy systems.

I’d been looking for good, detailed data on how much the government spends on our current energy infrastructure, and since working on WDMMG I’ve found, pretty much, what I was looking for. I learnt about the Country Regional Analysis that HM Treasury publishes yearly to show the parts of the country that have benefit from UK public spending.

I took the Country Regional Analysis report and I’ve separated out all the codes that impact on our energy infrastructure and carbon emissions and their associated costs for 2008/09.

You can see the results of my investigation at my Many Eyes account.

I’m being quite careful about the summing these costs, as some of the figures are negative, which I believe means that they are income generating. But more research is required on this.

I have also been requesting the Department of Energy and Climate Change’s spending on different energy sources. So far you can see that for 2008/09 I’m getting a cost of £26 million, in total.

I’ll be writing a follow up post to this one, when I have a display of these Department of Energy and Climate Change costs.

I hope that calculating the costs of our current energy system will form a good baseline for discussions about the cost of our energy system leading up to 2050.

If you would like to work on this project with me then please add your details to our get involved page.

To do this we’ve been busy collecting (and cleaning) government time series include projections from 2008, 2010 (before the budget) and 2010 (after the budget), into the google spreadsheet below. Each projection is contained in a different sheet. At present this is only at the level of GDP, total expenditure, total taxation, deficit etc. There’s also a description sheet which gives a bit of information about the structure.

http://spreadsheets.google.com/ccc?key=tFggM4NNja9rSzUd_qQTv9w#gid=4

An initial view of a couple of sheets of this work are now available in the budgetizer:

http://www.wheredoesmymoneygo.org/budget/budgetizer/

This is very much an alpha visualisation – the main thing at this stage is the code to read from multiple sheets and visusalise them as graphs.

Even with this simple view, you can see that while the annual overspend (expenditure over receipts) falls under the post-budget plan, the total deficit remains huge compared to GDP (compared to where it has been over the last 30 years)

Having built this, the plan is to add features to allow users to interactively experiment with different senarios. Even doing this roughly is quite a lot harder as it requires projecting the consequence of changes of policy multiple years into the future.

We thought we were getting everything with the COINS release. In fact we were missing the best part of all: the Whole of Government Accounts.

Before he became chancellor George Osborne promised:

We will publish, shortly after coming to office, the Treasury’s COINS database that reports several thousand programme spending items in a consistent format across departments

Sure enough, in June, with George as our brand new chancellor, we saw the publication of COINS.

I’d been investigating the COINS (Combined Online Information System) prior to release and was expecting great things.

Like many others, we thought we would get a very detailed picture of the financial health of every government-funded body, because as the Treasury’s guide to COINS (pdf) explained: COINS is used for “the preparation of Whole of Government Accounts (WGA)”.

Now, I knew that the Whole of Government Accounts (WGA) requires each public authority to complete a detailed record of what they own and what they have bought.

You can take a look at the form each authority has to fill out, it is called an L-pack.

You’ll see the kind of information the WGA gathers, details about bank accounts, shares owned and services bought. There were 553 Local Authorities and 320 NHS trusts and foundations who completed this form last year – that’s a lot of data.

On top of that, each central government body has to fill out a C-pack. Once complete, all the L-Packs and C-Packs are uploaded to COINS.

Then, on COINS, the completed records are audited. The auditing involves the WGA team checking that each exchange of money between departments is accurately recorded by both parties.

Auditing, I believe, means “matching up” buyers and providers of services and goods. For example, a perfect match would be if Barnet Council records the purchase of an item costing £5.5m from Enfield Council, and Enfield Council records the sale of the same item at £5.5m to Barnet Council. The COINS scripts would eliminate this to zero.

However if Barnet Council records the purchase of an item costing £5.0 m from Enfield Council and Enfield Council records a sale of the item as £5.5 m to Barnet Council, then COINS would eliminate 5.0m and and put 0.5M into suspense. The suspense account then needs to be investigated more, to see where the mistake is. This investigation is the job of the WGA team.

The WGA has been running every year, for 10 years. And how many results have the public seen from the whole exercse? Exactly zero.

When COINS was published I expected to see this rich body of WGA data, but none of it was there.

So, I investigated, resulting in my request for the WGA for 2008/09.

The reply was unlike anything else I have seen. The Treasury conducted a public interest survey which consisted of a list of pros and cons for release of the WGA data. The list of pros were that the public would benefit by seeing more of the process.

Amongst the list of cons where:

Ministers and officials need space in which to develop policy, including space for the development of policy through an interactive process of testing and refining ideas. This process could be weakened if information was released prematurely or when proposals where not finalised, as this could lead to poorer decision-making

Overall the cons won and my request was rejected.

There are no plans to publish any of the 10 years worth of “dry run” data from the WGA. But the 2009/10 data will be published in spring 2011 – I’m told this report will be similar to company accounts level of detail.

So, when we hear about greater transparency on public spending, it is important to bear in mind that we have made great progress but we don’t have the full picture yet.

About Lisa Evans

Lisa Evans is Lead Researcher on Where Does My Money Go? an independent non-partisan project run by the Open Knowledge Foundation which makes government spending and finances understandable to the general public – showing each of us where every pound of our taxes go

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