Hello.

My name's Ms. Ikomi.

I'm a citizenship teacher from London, and I'm going to be taking you through today's lesson.

Let's get started.

Today's lesson is called how does the government spend its money? It is part of the wider unit, how does the economy work? By the end of today's lesson, you will be able to explain what the government spends money on and how it makes those spending decisions.

The key words we're going to hear in today's lesson are budget.

This is the government's yearly financial plan showing how much money it will collect and spend on public services, things like healthcare, education, and transport.

The treasury is the government department responsible for managing the country's finances.

We're going to start by thinking about what the government spends money on.

The UK's government's budget is complicated and very difficult to design.

This is because there are a large range of services that the government has to pay for.

It also has to consider the price of borrowing and debt.

We already have debt that we owe as a country.

It's not just the UK that they have to think of, because we also have to think about the international aid that we, as a nation, provide to other countries.

In the Autumn 2024 budget, the labour government allocated 13.

3 billion pounds in aid for 2024 to 2025, so we see that this is a large amount of money that has to be considered, even if it's not directly being used in the UK.

One of the biggest areas of government spending is social protection.

This includes things like welfare payments, such as pensions when people have retired, disability benefits for people who may be living with a disability, and housing assistance to help people pay their rent.

In 2023 to 2024, the government allocated around 361 billion pounds to support individuals in need.

In '23 to '24, the spend for state pensions was 123 billion pounds.

This payment in particular ensures that elderly citizens are receiving financial support, and vulnerable individuals have access to essential benefits to help them survive.

Welfare payments, especially benefits, are often an influential topic in the run up to elections.

Lots of political parties will cite them in their manifesto, where they write down what they were hoping to do, and they use this as a way to persuade the people who are voting, the electorate, to vote for them.

The reason that this is a really important topic is because welfare policies are directly going to impact people's life and their financial security.

If you are, particularly, in a low income, then it's gonna be really important for you to know what the government is going to spend on welfare payments and whether that is gonna go up or down.

Parties often use these policies to appeal to different type of voter groups, either promising more support or stricter controls to reduce spending, that might look like cuts.

For example, there were some welfare policies outlined in party manifestos in the 2024 general election.

These caused debate because they looked quite different depending on the party.

The Conservative Party said that they would tighten up how the benefit system assess capability for work.

They would reform the fit note process, which is what people can use if they have to take a period of time off of work, and introduce tougher sanctions and rules for people who are abusing the system.

The Labour Party said they would tackle the backlog of access to work claims, and reform or replace the Work Capability Assessment.

This is the review that people have to undergo to see whether they are able to work.

The Liberal Democrats said that they would reduce the Universal Credit wait time from five weeks to five days, meaning that people could have access to that payment sooner.

They also said they would set up an independent commission to recommend annual increases, so we can see one example whereby government decisions on spending are very political.

Let's do a check.

What does social protection include? I'd like you to tick or cross the following.

Pause your video and have a go at this now.

Let's check our answers.

Social protection includes pensions, not transport, disability benefits, housing benefits, not international aid, but yes to low income benefits.

Well done if you got those right.

Healthcare is another really important area of government spending, primarily funding the National Health Service, the NHS.

In 2023 to 2024, the government spent 221 billion pounds on healthcare.

That was including access to medical treatment, hospitals, GP services, mental health support.

People can access this for free at the point of care.

This funding helps to ensure that emergency care and surgeries and prescriptions remain available to all UK residents.

General Public Services, which covers the running of government departments, elections, public administration, received 158 billion pounds in funding.

This money helps the government operations to keep running smoothly, and it also means that services are well managed and accessible to citizens.

This is the funding that provides MPs with money to campaign in elections.

The government also invests in lots of other areas such as education.

This ensures that young people receive free school places in the UK.

In the year 2023 to 2024, 112 billion pounds was spent on education.

This supports things like teachers' salaries, school buildings, equipment like textbooks, and additional support needs.

This also includes funding for universities, apprenticeships, and vocational training.

This helps pupils to develop skills that they will need for their future careers.

Let's do another check.

I'd like you to match the category with what it funds.

Pause your video and have a go at this now.

Let's check our answers.

Healthcare funds the NHS.

Education funds school buildings, and general public services fund MPs.

The government spends a significant amount on economic affairs.

That's things like transport, energy, and business support.

Approximately 92 billion pounds was allocated in these areas in 2023 to 2024, such as road maintenance, rail networks, and renewable energy initiatives.

For example, projects like HS2 and road improvements across the country are aiming to boost transport efficiency and economic growth.

Tax money is used for local government services too.

These are things that might happen on a more local level, such as rubbish collection, the libraries, parks, and social care for people who are vulnerable in the local area.

Local councils receive funding to provide these services to communities.

In 2023 to 2024, around 60 billion pounds was allocated to local councils to help maintain services.

This included care for the elderly and support for vulnerable children.

Emergency services like the police and firefighters are also funded by taxes.

This helps to keep the country safe.

This also applies to the armed forces who are funded by taxes to help protect national security.

In '23/'24, the UK spent around 54 billion pounds on defence.

That included funding for the armed forces to ensure that they're well equipped and prepared for national security threats.

Let's do another check.

I'd like you to change one word in the following sentence to make it correct.

Pause your video and have a go at this now.

Let's check our answers.

We could have changed the word from education to defence.

Our sentence now reads, "In 2023/2024, the UK spent around 54 billion pounds on defence, ensuring the military is well equipped and prepared for national security threats." Let's do another check.

I'd like you to refer to spending that happened in 2023 to 2024.

Discuss two services that the UK spent money on.

Pause your video and have a go at this now.

Two of the services that the UK has spent money on include, one of the largest areas of government spending was social protection, with the government allocating around 361 billion pounds towards this.

This included welfare payments such as pensions, disability benefits, and housing assistance, which support people who are unemployed, disabled, or on low incomes.

The government also spent 221 billion pounds on healthcare, which allowed citizens to access medical treatment, hospitals, GP services, and mental health support for free.

Healthcare funding helps ensure that emergency care, surgeries, and prescriptions remain available to all UK residents.

Next, I'd like you to explain how the UK government spend money on transport, using an example to support your answer.

Pause the video and have a go at this now.

You could have included the UK government spends money on major infrastructure transport projects such as road maintenance and rail networks.

For example, projects like HS2 and road improvements across the country aim to boost transport efficiency and economic growth.

Next, we're going to think about how the government makes those spending decisions.

There are lots of different viewpoints and debates on how the government and other service providers may provision for public services.

It's really important to consider these debates and your own viewpoints.

We have to learn about government spending in order to be able to critically analyse and discuss different issues around how the government spends money.

The government decides how to spend money through a process that is led by the Treasury.

The Treasury is the government department headed by the Chancellor of the Exchequer that manages the country's finances.

Every year, the government sets the budget outlining how much money will be raised through taxes and how much will be spent on public services such as welfare, health, the elderly, and education.

There is a debate about whether the government should prioritise spending on public services or reduce taxation to allow individuals to have more control over their money.

The budget is presented in a red briefcase by the Chancellor of the Exchequer.

You might have seen this happen on the news when they do a news conference outside Downing Street.

There are lots of people working within the government to make the financial decisions that come out of the Treasury.

It's not just one person.

For example, the First Lord of the Treasury is the Prime Minister.

The Chancellor of the Exchequer is actually the Second Lord of the Treasury.

There are lots of other people who are also working within this department to make sure that the decisions that are made are fair and based on research.

Let's do another check.

I'd like you to read the sentences below and choose the correct word to complete each sentence about the Treasury.

Pause your video and have a go at this now.

Let's check our answers.

The Chancellor of the Exchequer is the Second Lord of the Treasury.

The budget is always presented in a red briefcase.

The Treasury are decision makers.

Well done if you got those right.

One of the key ways that spending decisions are made are through government departments.

This might be the Department for Education and Social Care, or the Department for Health.

They receive a budget from the Treasury and they have to decide what they are going to spend that budget on.

Some people argue that more funding should go towards public services such as the NHS, or the Education system because these are related to some of our fundamental human rights.

However, others argue that services like the NHS are inefficient, and, actually, the government should prioritise lowering taxes and allow people to have more control over their finances and maybe choose to use private healthcare.

Public need and emergencies also influence how the government makes its spending decisions.

If there's a crisis such as a pandemic or natural disaster, the government may allocate emergency funding.

That is something that they haven't necessarily planned for previously.

During the COVID-19 pandemic lockdowns, the Treasury introduced furlough schemes to support workers who weren't necessarily going into work every day.

Some people argue that emergency funding can lead to high levels of government debt, whilst others believe it is necessary in order to protect jobs and businesses during difficult times.

Another way that government spending is decided is through Parliament.

The budget is debated and approved by MPs in the parliamentary process.

Some people argue that this ensures that we have democratic accountability.

This is because our MPs, who are elected representatives, are voting on our behalf on how that money will be spent.

However, others argue that spending decisions are often politically motivated.

Therefore, governments might prioritise short-term policies to get votes, as opposed to thinking about longer-term investments for welfare and public services.

Let's do another check.

Finish the following sentence, "Deciding spending through debating in the House of Commons ensures A, automatic approval, B, financial secrecy, C, democratic accountability, or D, unequal representation.

Pause your video and have a go at this now.

The correct answer is C, democratic accountability.

The government also has to consider long-term investment when making spending decisions.

Money is allocated for different structural projects that are going to support the infrastructure of the country across many generations.

That might be things like roads and railways, or thinking about renewable energy, which might have an impact on the economy in the future.

You might have heard big projects like HS2 being mentioned.

Supporters argue that this will create jobs and boost growth, whilst critics say that they could be too expensive and might take money away from other immediate public service needs, maybe things like schools and care for the elderly.

Economic conditions will play a really important role in government spending.

When the economy is strong, the tax revenues will increase.

That means that the government will have more money to spend and they can put that into the welfare and public services.

During recessions, where there is a decline in growth, the Treasury might have to cut spending or increase borrowing.

That might lead to debates about where money is being prioritised.

Some people argue that reducing government debt is really important for future stability.

Others argue that investing in public services should be the priority, even if it means borrowing more.

There are debates that show that spending decisions are really complex.

Lots of people have different viewpoints on how to balance economic growth, public service provision, and long-term financial responsibility.

Jacob's giving us an insight into one side of the debate.

Jacob says, "I think we should spend more on education because it will be us controlling the economy in the future." Sofia says, "I think it's more important to spend it on welfare and benefits to improve the living conditions of people on low incomes." I'd like you to discuss this with a partner, "Why might the government increase spending on public order and safety? What might the funding be spent on" in this situation? Pause your video and have a go at this now.

I asked you to discuss with a partner the following question.

You might have said that the Government might increase spending on public order and safety if the crime rate increases, or instances of public order offences have increased.

The funding, in this case, might be spent on more police to control public order, or investing more money in things like street lights to improve safety.

However, this might also be the result of raising Council Tax, in order to balance the budget.

Let's put this into practise.

I'd like you to draw a mind map to outline how the UK Government decides on how to spend money.

Pause your video and have a go at this now.

I asked you to draw a mind map outlining how the UK government decides how to spend money.

You might have included the Government considers the Treasury budget.

They consider different departments and how they are going to spend that money.

They think about public needs and emergencies.

They consider the debate within Parliament and what MPs think.

They look at long-term investment, potentially at infrastructure, and they also consider the wider economic conditions.

Next, we're going to think about the different perspectives on how the Government make spending decisions.

Which of the following Oak National Academy pupils do you agree with? Explain your answer.

Izzy says, "I think the Government need to reduce hospital waiting times and give more money to the NHS in the next budget.

We need to think about the health of the nation first." Alex says, "I think the budget needs to tackle housing first because the cost of rent is so high.

I think this should be prioritised over the NHS because people are homeless." Lucas says, "I think the Government need to reduce spending on public services altogether to keep taxes down and let people save money, rather than be in debt." Choose which opinion you agreed with and explain why.

Pause your video and have a go at this now.

I asked you to choose which opinion you agreed with.

If you agreed with Izzy, your answer might have looked like this.

"I agree with Izzy that the Government should prioritise the NHS because healthcare is essential for everyone.

Long hospital waiting times could be dangerous and more funding could improve patient care.

A healthier population also means fewer people off work, which ultimately benefits the economy." If you agree with Alex, you might have said, "I agree with Alex because I think tackling housing first is more important because everyone needs a safe place to live.

Homelessness is a significant problem, and high rent costs make it difficult for people to afford quality housing.

If people don't have stable and safe homes, their health and wellbeing suffer too, which would also put a strain on the NHS." If you agree with Lucas, you might have said, "I agree with Lucas because the Government should reduce public spending to lower taxes so people can keep more of their own money.

If individuals have more financial freedom, they could choose where to spend or save, rather than relying on government services.

Too much public spending can also lead to debt, which could harm the economy in the long run." Today, we've been learning about how the Government spends its money.

We have learned that the government spends money on essential public services such as healthcare, education, welfare, defence, and infrastructure.

Funding decisions are made by the Treasury, government departments, and debated in Parliament to ensure democratic accountability.

Spending is influenced by public needs, economic conditions, and long-term investment priorities.

There are debates about whether more money should go into areas like the NHS or housing, and whether reduced public spending would benefit taxpayers.

Government spending aims to balance economic growth, public welfare, and financial responsibility.

That's the end of today's lesson.

Thank you for joining me.