Understanding the Public Services Industy

Public Services Industry Review
with very low private spending and relatively low public spending. However it has a
substantially larger health PSI as a share of GDP than the other countries 65 .
5.11 There is less variation in funding sources for education across countries, although
Spain stands out as spending substantially less on education as a percentage of GDP.
Public provision makes up the lion’s share of education spending in all countries.
Sweden and the US have the largest share of PSI provision of education, with the UK
in third place.
Figure 5.6: Size of public and private spending on education as percentage of GDP
16
14
PSI
Other public spending
Private spending
12
10
% GDP
8
6
4
2
0
US France Spain Sweden Australia UK
Source: Oxford Economics
Notes: Private spending calculated from country IO tables
Other public spending and PSI calculated from country COFOG tables and Oxford Economics analysis
Other areas of services
5.12 Not all areas of spending are as suitable for this sort of comparison as health and
education, particularly where it is less straightforward to estimate the relevant level of
consumer spending. However, for some functions of government such as defence it is
unlikely that there will be much consumer spending to take into account, and in these
cases it is simpler to compare the PSI and non-PSI public spending across countries as
a share of GDP. Some examples are shown in Figure 5.7.
65 Note that the UK figures include GPs’ salaries in public spending rather than the PSI.
64