Share of country's funds devoted to economic development shrinking, says report

The profile of the U.K's spending is changing dramatically, with health and old age set to have more than twice that allocated to economic development and education, according to a new analysis.

After a decade of deficit-reduction, transport and other non-protected departments will have had their spending cut by over 50% by 2020, whilst spending on the NHS will have risen by 14%, the Resolution Foundation said. The shift means that health resource spending is projected to be two-and-a-half times the size of 15 departments.

The move towards health, and away from areas such as transport, "raises questions about the future role of the state in boosting productivity," the Resolution Foundation said. Whilst capital spending as a share of GDP is to be maintained, "this will still leave public investment well down on historic trends and low by international standards".

With pensions taking up an increasing share of the welfare budget, "the overall share of state spending on old age and health is set to reach 43% by 2020, a rise of around a quarter since 2007". Matt Whittaker, chief economist at the foundation, said: "It's important to step back and consider what the Chancellor's plan means for the role of the state."