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New
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Year 10

How does the Government get its money?

I can explain what the Budget is and how the Government funds the country.

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New
New
Year 10

How does the Government get its money?

I can explain what the Budget is and how the Government funds the country.

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These resources will be removed by end of Summer Term 2025.

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Lesson details

Key learning points

  1. The Budget is a financial framework that annually shows how the Government generates and allocates money.
  2. The Government funds the country through six primary revenue streams including taxation, borrowing, natural resources.
  3. Taxation is the main source of government revenue, with income tax, VAT and corporate levies funding public services.
  4. The Government incurs debt by issuing bonds, creating national liabilities that must be repaid with interest.
  5. Natural resources, such as oil from the North Sea, and public assets like land are sold or taxed to generate revenue.

Keywords

  • Budget - the Government's yearly financial plan, showing how much money it will collect and spend on public services like healthcare, education and transport

  • Funds - provides money for something, for example, the Government raises and allocates money

Common misconception

The Budget just shows how money is allocated across the country.

The Budget maps all income and expenditure so it shows us what money goes where and how money is generated, not just allocated.


To help you plan your year 10 citizenship lesson on: How does the Government get its money?, download all teaching resources for free and adapt to suit your pupils' needs...

You could look at an example of a company's budget so pupils could see a comparison between this budget and the Government Budget. Alternatively, you could access the Chancellor's Budget speech online and show part of it to pupils.
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Content guidance

  • Depiction or discussion of sensitive content
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Supervision

Adult supervision recommended

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Licence

This content is © Oak National Academy Limited (2025), licensed on Open Government Licence version 3.0 except where otherwise stated. See Oak's terms & conditions (Collection 2).

Lesson video

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6 Questions

Q1.
Match the terms to their correct definitions.
Correct Answer:inflation,the rate at which prices of goods and services rise over time
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the rate at which prices of goods and services rise over time

Correct Answer:recession,a period of economic decline, often leading to increased unemployment
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a period of economic decline, often leading to increased unemployment

Correct Answer:austerity,government policies aimed at reducing spending
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government policies aimed at reducing spending

Q2.
Which of the following is a sign of a healthy economy?
Correct answer: stable inflation
sharp increases in taxes
falling consumer spending
rising government debt
Q3.
Fill in the blank: The UK Government takes advice on economic policy from the .
Correct Answer: Bank of England
Q4.
Why might bus services be cut during a recession?
The Government wants to discourage public transport use.
Bus companies make more money by reducing routes.
There are fewer people using buses during a recession.
Correct answer: The Government needs to prioritise essential services with limited funds.
Q5.
Fill in the blank: One important measure of a country's economic health is its , which represents the total value of goods and services produced.
Correct Answer: gross domestic product, GDP, gross domestic product (GDP)
Q6.
Why does the Government aim to keep inflation low but positive?
It ensures people never have to pay more for goods and services.
It allows wages to stay the same over time.
Correct answer: It helps prevent prices from rising too quickly or falling too much.
It keeps the cost of borrowing money high.

6 Questions

Q1.
What does the Budget show?
the financial plans of private companies
the salaries of all government employees
Correct answer: how the Government generates and spends money
the value of properties owned by the monarch
only how money is allocated across the country
Q2.
Which of the following is not a primary way in which the Government raises money?
Correct answer: printing more money
borrowing
selling natural resources
fines and fees
Q3.
Which of these industries has been fully privatised in order to raise money for the UK Government?
the police
the NHS
Correct answer: the railways
the fire service
Q4.
Why is taxation important for government funding?
It allows the Government to avoid borrowing.
It only affects wealthy individuals.
Correct answer: It provides the main source of income for public services.
It ensures businesses make profits.
Q5.
Fill in the blank: The Government borrows money by issuing , which create national debt that must be repaid with interest.
Correct Answer: bonds
Q6.
Match the terms to their correct definitions.
Correct Answer:Budget,a yearly plan presented by the Chancellor of the Exchequer
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a yearly plan presented by the Chancellor of the Exchequer

Correct Answer:funds,provides money for something, such as public services
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provides money for something, such as public services

Correct Answer:income,the money the Government raises, mainly through taxation
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the money the Government raises, mainly through taxation

Correct Answer:expenditure,the money the Government spends on public services and other costs
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the money the Government spends on public services and other costs