Public services spending, including estimates of the total spend on public services 

To estimate the real cost of public spending, we deflate government spending figures using the GDP deflators published by the Office for Budget Responsibility in the Economic and Fiscal Outlook from March 2023. ¹ Office for Budget Responsibility, Economic and fiscal outlook – March 2023, 15 March 2023, https://obr.uk/efo/economic-and-fiscal-outlook-march-2023 To better reflect the underlying inflation conditions present in 2020/21, we estimate our own figures by generating a mid-point that averages across values from 2019/20 and 2021/22. We deflate spending figures in our financial analysis across all Performance Tracker chapters to 2023/24 prices.

In cases where we calculate real-terms changes in figures that relate to individuals – for example, wages or the adult social care means test – we use the consumer price index rather than the GDP deflator. The CPI that we use also comes from the OBR’s Economic and Fiscal Outlook from March 2023.

Change in demand for public services

General practice

To project likely growth in demand for general practice, we use analysis from The Health Foundation. Its main published analysis for ongoing demand, published in October 2021, ² Rocks S, Boccarini G, Charlesworth A and others, Health and social care funding projections 2021, The Health Foundation, 2021, https://www.health.org.uk/publications/health-and-social-care-funding-projections-2021 includes an estimate for how much primary care activity will need to increase to maintain standards, factoring in growing case complexity due to comorbidities. General practice excludes some services that are included in The Health Foundation’s measure of primary care but includes others (such as drugs dispensed in general practice) that it excludes. But we nonetheless assume that demand for genera practice services changes in the same way as demand for primary care.

To ensure comparability with the demand projections shown for other services (for which we do not include service-specific cost pressures or possible productivity gains), we only factor in increases in activity, rather than additional assumptions around changes to pay and productivity.

Hospitals

To project likely growth in demand in hospitals, we again draw on analysis from The Health Foundation. Its analysis provides an estimate of the rate of growth in activity, adjusted for morbidity, needed to meet growing demand for acute care, while maintaining its scope and quality. We assume that demand for acute and specialist trusts (our focus in this chapter) changes in the same way as The Health Foundation’s projection of demand for acute care.

To ensure comparability with the demand projections we show for other services – where we do not include service-specific cost pressures or possible productivity gains – we only factor in increases in activity.

The Health Foundation kindly provided us with a breakdown of its model to allow us to derive an overall estimate of acute care, based on a weighted average of elective, nonelective, A&E and outpatient activities.

Adult social care

For adult social care, we take the projected increase in demand from The Health Foundation’s REAL Centre, published in October 2021. This model incorporates several factors, including increases in pay and projected changes in productivity. We take only the increase in activity projected in the model, as the outlook for pay has changed since it was published.

In other services, we only factor in increases in demand, without incorporating above inflation cost pressures. This is because, for most services, we expect wages to broadly increase in line with economy-wide inflation (the GDP deflator, which will increase less quickly than consumer price inflation), which our spending projections already account for. But this is not the case for adult social care, where a substantial proportion of the workforce is paid the national living wage (NLW), which is set to increase much more quickly than economy-wide inflation. The impact of the NLW is explored in more detail in the adult social care section of this Methodology, below.

Children’s social care

To project demand for children’s social care, we break down children’s social care spending into three service categories based on the data returns that local authorities make to the DfE under Section 251 of the Apprenticeships, Skills, Children and Learning Act 2009. ³ Education and Skills Funding Agency, ‘Section 251: 2021 to 2022’, 8 March 2021, last updated 6 July 2022,
https://www.gov.uk/government/publications/section-251-2021-to-2022 For each category, we make the assumptions about rates of growth set out in Table 10.1.

Table 10.1 Projected growth rates for children’s social care 

Service category	Gross spending 2021/22 (£bn)	Growth rate assumption	Projected growth 2019/20 to 2024/25
Foster placements	£1.9bn	Increases in line with the growth in the rate of foster placements per child between 2007/08 and 2021/22	9.3%
Residential care	£2.1bn	Increases in line with the growth in the rate of residential care placements for children in England between 2007/08 and 2021/22	24.5%
Other expenditure	£6.6bn	Increases in line with the rate of episodes of need per child in England between 2012/13 and 2021/22	0%

As 2020/21 was an unusual year due to the pandemic, we project demand from 2019/20 onwards. In common with the assumptions made for other service areas, to project demand growth we assume that the service remains as efficient as it was in 2019/20 and that the cost of providing each service grows in line with economy-wide inflation. If there are cost pressures beyond the projected increases in demand described above, then spending would have to rise faster. 

Schools 

To project how much schools would have to spend to meet increased demand, we separate primary and secondary schools because: 

• on average, the government spends slightly more on each secondary school pupil than on each primary school pupil 
• the DfE projects that the number of primary school pupils will fall over the period 2019/20–2024/25 while the number of secondary school pupils will increase. 

As 2020/21 was an unusual year, we base our projections on spending in 2019/20 (see Table 10.3). We multiply the 2019/20 level of spending per pupil in primary and secondary schools by expected growth in pupil numbers between 2019/20 and 2024/25 and add together the implied figures for spending on primary and secondary schools. We assume that the costs of the inputs used in providing school services rise in line with economy-wide inflation. 

Table 10.3 Projected growth rates for schools 

Service category	Gross spending 2019/20 (£bn)	Growth rate assumption	Projected growth 2019/20 to 2024/25
Primary schools	£19.8bn	The number of pupils grows in line with DfE projections for the number of primary school children	-6.3%
Secondary schools	£18.5bn	The number of pupils grows in line with DfE projections for the number of secondary school children	7.5%

Criminal courts 

We project demand for the crown and magistrates’ courts separately. 

For the crown court, we calculate demand as the number of cases received each year, weighted by the average hearing time for cases completed in each year. We do this separately for cases that are ‘for trial’ and other cases (such as appeals and sentencing). We assume that: (i) longer hearing times are a result of cases being more complex, rather than the court operating inefficiently; and (ii) the cases received would have had similar hearing times to the ones disposed of, within case type (cases for trial and others), in the year in question. 

For magistrates’ courts, where the data we have is less detailed, we measure demand simply as the number of cases received each year. 

We weight magistrates’ and crown court demand to come to an overall measure of court demand. We do this using two components. First, we use the number of sitting days in the crown court and magistrates’ courts in 2018. ⁴ Maynard P, Response to parliamentary question, UK Parliament, 10 June 2019, retrieved 27 October 2023, https://questions-statements.parliament.uk/written-questions/detail/2019-06-03/259164 
  Second, we use the average costs per sitting day in the crown court and magistrates’ courts, which the National Audit Office reported in 2016, as these are the latest available figures. ⁵ Comptroller and Auditor General, Efficiency in the Criminal Justice System, Session 2015–16, HC 852, National Audit Office, 2016, p. 10, https://www.nao.org.uk/wp-content/uploads/2016/03/Efficiency-in-the-criminal-justice-system.pdf  This implies that 61% of court demand comes from the crown court and around 39% comes from the magistrates’ courts. We then project demand forward separately for the crown and magistrates’ courts. 

The main driver of our projection of court demand is the increase in police officers; the government met its commitment to increase officer numbers by 20,000 on top of 2018/19 figures by April 2023. ⁶ Hannah G, ‘Police recruitment target hit, now to secure the benefits’, National Audit Office, 26 April 2023, https://www.nao.org.uk/insights/police-recruitment-target-hit-now-to-secure-the-benefits We assume that an increase in the number of officers means the police can charge more cases, because as it stands the number of charges is only a small fraction of total crimes reported. The number of charges per police officer has fallen steadily for several years, in part due to underfunding elsewhere in the criminal justice system. 

We assume that once officers are embedded the number of charges per officer will return to and stay at 2019/20 levels. However, we assume that there is a lag of three years between recruitment and a return to 2019/20 levels of charges, as this is the time it has taken between the start of the uplift programme and an increase in that indicator. We therefore project that charges per officer will return to 2019/20 levels in 2026/27, increasing uniformly between 2022/23 and 2026/27. 

In the magistrates’ courts, we assume that the least serious ‘summary’ cases are unaffected by the number of police officer charges as some of these are brought by non-police organisations and they are simple, routine offences. With all other cases, in both the crown and magistrates’ courts, increases occur in line with the lag described above. 

Prisons 

To project demand for prisons, we use the Ministry of Justice’s (MoJ) central estimate for prisoner numbers over the five years from 2022 to 2027, which was published in February 2023. ⁷ Ministry of Justice, ‘Criminal court statistics quarterly: April to June 2023’, 28 September 2023, retrieved 27 October 2023, https://www.gov.uk/government/statistics/criminal-court-statistics-quarterly-april-to-june-2023

The MoJ’s central estimate is that the prisoner population will rise by 13.5% between March 2020 and March 2025 (and by 20.9% between March 2021 and March 2025). This projection incorporates the recruitment of the additional 20,000 police officers and the estimated impact of other policies, including: the provisions for increasing the release point for violent and sexual offenders sentenced to a standard determinate sentence of four to seven years; the statutory instrument to increase custodial sentences for serious offenders with a custodial sentence of seven years or more; the Serious Crime Act 2015; the Offensive Weapons Act 2019; and the Domestic Abuse Bill 2020.