ICAEW chart of the week: End of the first quarter (century)

Our chart this week marks the end of the first fiscal quarter of the 21st century on 31 March 2025 by comparing it with the previous four quarters in the 20th century.

A five column chart showing changes in the public sector net debt to GDP ratio from 1 April 1900 to 31 March 2025 by quarter century. 

1900s Q1: Borrowing of +£7bn or +184% of GDP less debt inflated away of -42% of GDP = +142% of GDP. 

1900s Q2:   +£18bn or +210% of GDP - 182% of GDP = +28% of GDP. 

1900s Q3:   +£26bn or +48% of GDP - 203% of GDP = -155% of GDP. 

1900s Q4:   +£301bn or +72% of GDP - 88% of GDP = -16% of GDP. 

2000s Q1:   +£2,461bn or +130% of GDP - 66% of GDP = +64% of GDP. 

9 May 2025. Chart by Martin Wheatcroft FCA. Design by Sunday. Sources: Bank of England, 'Historical public finances database'; OBR, 'Public finances databank'.

March 2025 marked the end of the first fiscal quarter of the 21st century, comprising the 25 financial years from 2000/01 to 2024/25. Our chart this week takes a look at how it compares with the previous four quarters in the 20th century.

Our chart starts with the first quarter of the 20th century that started on 1 April 1900 and ended on 31 March 1925 – the comparative period a century ago. Public sector net debt increased by £7bn (from just under £1bn to just under £8bn) and by 142 percentage points of GDP (from 33% of GDP to 175% of GDP) over the 25 years. 

As the chart illustrates, the increase in the net debt to GDP ratio reflected an increase in the numerator from borrowing of 184% of GDP, partially offset by 42% of GDP from the ‘inflating away’ effect of economic growth and inflation on the denominator. 

Almost all of the borrowing in the first quarter a century ago was incurred to finance the First World War, while the severe contraction in the UK economy after the war (partly because of the global ‘Spanish flu’ influenza pandemic) meant that the erosion of net debt as a share of GDP from economic growth and inflation was just 42% instead of the 84% it had been in the first 20 years of the century.

Around £15bn of the £18bn or 210% of GDP that was borrowed during the second quarter of the 20th century was during the Second World War years from 1940/41 to 1945/46. This was substantially offset by strong economic growth during the quarter (especially in the five years up to 1949/50 as the nation emerged from the war) that saw debt ‘inflated away’ by 182% of GDP. The consequence was an increase of just 28 percentage points in net debt as a share of GDP to 203% of GDP on 31 March 1950.

The third quarter of the 20th century saw the government borrow a further £26bn, resulting in net debt doubling to £52bn on 31 March 1975. However, net debt fell as a share of GDP by 155 percentage points to 48% of GDP, with borrowing of 48% of GDP being more than offset by a 203-percentage point reduction from economic growth and inflation increasing the denominator in the net debt/GDP ratio.

The last quarter of the 20th century saw a further reduction in the ratio of net debt to GDP of 16 percentage points, from higher borrowing of £301bn or 72% of GDP being offset by an 88% of GDP inflating away effect of economic growth and inflation. Net debt reached £353bn on 31 March 2000, equivalent to 32% of GDP.

The first quarter of the 21st century, based on provisional numbers for the year ended 31 March 2025, saw net debt/GDP increase by 64 percentage points, with £2,461bn or 130% of GDP borrowed over the past 25 years, taking net debt to £2,814bn and net debt/GDP to 96% of GDP after reflecting a 66% of GDP inflating away effect from economic growth and inflation.

One positive from these comparisons is that at least the latest quarter was not as bad as the comparative quarter a century ago. However, for a period of peacetime we still managed to borrow approaching ‘warlike’ sums to fund the costs of a financial crisis, a pandemic (although the comparative period had one of those too) and an energy crisis that all combined to increase public sector net debt massively. Meanwhile, lower levels of economic growth than in the second half of the 20th century mean that we have not inflated debt away as quickly as we might hope.

As we start the second quarter of the 21st century, the hope is that we can avoid wars, boost economic growth, control spending to keep borrowing under control and – at the same time – increase the speed at which debt is inflated away. Doing so will be essential if we are to move the public finances back onto a sustainable path.

ICAEW chart of the week: Canada’s trade with the US

Our chart this week takes a look at trade between the US and Canada, a major factor in Canada’s recent general election.

A step chart illustrating the differences between Canadian imports and exports in 2024.

Left hand column - US exports to Canada: C$601bn = C$36bn energy + C$442bn goods (excluding energy) + C$123bn services. 

Right hand column - Canada exports to the US: C$650bn = C$171bn energy + C$404bn goods (excluding energy) + C$75bn services. 

Step 1  - Trade surplus on energy +C$135bn. 
Step 2 - Trade deficit on goods -C£38bn. 
Step 3 - Trade deficit on services -C$48bn. 

2 May 2025. Chart by Martin Wheatcroft FCA. Design by Sunday. 

Sources: US Bureau of Economic Analysis; US International Trade Commission. C$1.37 = US$1:00.

Trade between Canada and the US has become a major political issue since the inauguration of President Trump, and is generally accepted to have had a significant influence on the outcome of Canada’s general election on 28 April 2025, with former Bank of England Governor Mark Carney elected as prime minister. 

Our chart this week looks at trade between the two countries in 2014, based on statistics from the US Bureau of Economic Statistics and the US International Trade Commission, translated into Canadian dollars at an average exchange rate in 2024 of C$1.37 = US$1.00.

According to these statistics, Canada had an annual trade surplus with the US of C$49bn, representing the difference between imports from the US of C$601bn and exports to the US of C$650bn. 

This can be analysed between a net trade surplus of C$135bn on energy and trade deficits of C$38bn on goods (excluding energy) and C$48bn on services. These represent the difference between US exports to Canada of C$36bn, C$442bn and C$123bn for energy, goods (excluding energy) and services respectively and Canadian exports to the US of C$171bn, C$404bn and C$75bn.

The picture presented by the chart is perhaps not entirely surprising given Canada’s abundant natural resources and the intertwining of its economy with that of its neighbour. Canadians collectively receive large amounts of US dollars for supplying energy that are then used to purchase goods and services from the US and to invest in the US.

President Trump’s on/off tariffs on Canada over the past couple of months, together with retaliatory actions by Canada, are believed to have already had a major impact on trade between the two countries, and this will become more visible as data becomes available over the next few months.

It is difficult to know where trade discussions between the two countries will end up, but Canada does have some cards to play, despite being highly dependent on trade with the world’s biggest economy. While import tariffs were part of their original response and remain an option, they also have the ability – used in past trade disputes – to put export tariffs on commodities such as crude oil and lumber that are essential to US industry and the daily lives of consumers. 

Doing so could add significantly to the inflationary pressures that the US is already experiencing from the tariffs it has placed on imports from China and the rest of the world.

O Canada.

ICAEW chart of the week: One trillion pounds (almost)

Our chart this week takes a look at how UK public sector net debt has increased from £1,816bn to £2,814bn over the past five years – an increase just £2bn short of £1tn.

According to the provisional public sector finance numbers for March 2025 released by the Office for National Statistics (ONS) on 23 April, public sector net debt was £2,814bn on 31 March 2025. This comprised gross debt of £3,198bn, less cash and other liquid financial assets of £384bn.

Our chart this week illustrates how the net amount the nation owes to its creditors has changed over the last five years, starting with net debt of £1,816bn on 31 March 2020. Debt repayments of £541bn were financed by replacement borrowing of £541bn, followed by borrowing of £847bn to fund deficits over the five years (£315bn in 2020/21, £122bn in 2021/22, £127bn in 2022/23, £131bn in 2023/24 and a provisional £152bn in 2024/25) and borrowing for other reasons of £151bn (principally to fund government lending and working capital requirements). The result is an increase of £998bn to reach net debt of £2,814bn on 31 March 2025.

At just short of a trillion pounds, this is the largest amount ever borrowed by the UK government in a five-year period, with only the £0.8tn (£799bn) borrowed over the five years to March 2013 following the financial crisis coming close – when net debt went from £567bn on 31 March 2008 to £1,366bn on 31 March 2013. 

The pandemic and the subsequent energy and cost-of-living crises are, of course, the main drivers behind the need to borrow so much in such a short time, but the worry is that annual borrowing levels are not coming down as quickly as might have been hoped (or budgeted).

Either way, the consequences of building up so much debt will be with us for a long time to come, with debt interest squeezing the amounts available to pay for public services and the tax burden approaching an all-time high, just as demographic change is reducing the proportion of working-age adults, compared with those in retirement.

Of course, as the latest numbers are provisional and the historical ones are often subject to revision, it would only take a couple of relatively small adjustments to the starting or closing debt balances to turn this from just under a trillion pounds to just over a trillion. 

Perhaps a reminder that while a couple of billion pounds is a huge sum of money to you or me (or even to many billionaires), in terms of the UK public finances it is not much more than a rounding error.

This chart was originally published by ICAEW.

ICAEW chart of the week: Regional incomes

Our chart this week looks at how median household disposable income varies across the UK, with the South East region topping the rankings and the West Midlands region at the bottom.

A column chart showing median household disposable income in 2023/24 before and after housing costs by region. 

South East: £3,270 median household disposable income per month in 2023/24 - £490 housing costs per month (including mortgage interest but excluding loan repayments) = £2,780 median household disposable income after housing costs per month in 2023/24.  
London £3,335 - £665 = £2,670. 
East £3,050 - £415 = £2,635. 
Scotland £2,800 - £250 = £2,550. 
South West £2,905 - £355 = £2,550.  
Northern Ireland £2,760 - £225 = £2,535. 
East Midlands £2,755 - £310 = £2,445. 
Wales £2,675 - £295 = £2,380. 
North East £2,625 - £270 = £2,380. 
North West £2,645 - £315 = £2,330. 
Yorks & Humber  £2,625 - £310 = £2,315. 
West Midlands £2,605 - £340 = £2,265. 
 
UK £2,865 - £370 = £2,495. 

17 Apr 2025. Chart by Martin Wheatcroft FCA. Design by Sunday. Source: House of Commons, 'Income inequality in the UK, 12 Apr 2025'.

Our chart this week is adapted from one of the charts in a House of Commons research report on income inequality in the UKpublished on 12 April 2025, showing how median household disposable incomes before and after housing costs vary significantly between the regions and nations of the UK.

As the chart illustrates, median household disposable income in the South East of England during 2023/24 was the highest in the UK at £2,780 per month, reflecting a median disposable income of £3,270 per month, before housing costs of £490 per month. 

London had a higher median disposable income at £3,335 per month, but also much higher housing costs at £665 per month, resulting in a lower median disposable income after housing costs of £2,670 per month.

This is followed by the East of England, with median disposable income after housing costs in 2023/24 of £2,635 per month (£3,050-£415), Scotland £2,550 (£2,800-£250); South West £2,550 (£2,905-£355); Northern Ireland £2,535 (£2,760-£225); East Midlands £2,445 (£2,755-£310), Wales £2,380 (£2,675-£295); North East £2,335 (£2,625-£270); North West £2,330 (£2,645-£315); Yorkshire and the Humber £2,315 (£2,625-£310); and West Midlands £2,265 (£2,605-£340).

Median household disposable income after housing costs in the West Midlands is 19% less than in the South East of England. West Midlands in this case includes Herefordshire, Shropshire, Staffordshire, Warwickshire and Worcestershire, in addition to the West Midlands ‘city-region’ that is centred on Birmingham.

The median household disposable income after housing costs for the UK is £2,495 per month (£2,865-£370) or £574 per week (£659-£85). 

The chart doesn’t show the median for England, which is also £2,495 per month but reflects a higher median disposable income and higher housing costs (£2,885-£390).

For this purpose, household disposable income is equal to income from employment and investments plus cash benefits (state pension, universal credit and other welfare benefits) net of income tax, national insurance, council tax (domestic rates in Northern Ireland), pension contributions, and student loan repayments, among other items. It is not net of VAT or other indirect taxes that households also pay.

Household disposable income is not the same as discretionary or surplus income, as it is before deducting other costs that families need to incur, such as food, energy, clothing, internet and childcare provision to name just a few examples. 

Housing costs include rents (gross of housing benefit), water bills, mortgage interest payments, structural insurance premiums, ground rent and service charges. They exclude the repayment element of mortgage payments, meaning that disposable income after housing costs on a cash basis can be substantially lower than is suggested by the chart.

In addition, as the median household for disposable income before housing costs is different to the median household for disposable income after housing costs, the housing cost numbers in the chart are affected by the much lower costs incurred by most pensioner households, the majority of which have paid off their mortgages and so live rent-free.

Disposable incomes vary widely between households with the bottom and top 10% of households in the UK having a monthly disposable income before housing costs in 2023/24 of less than £1,300 per month or more than £5,475 per month respectively. 

Disposable income also varies between household types, with (for example) a UK median household disposable income before housing costs in 2023/24 of £4,320 per month for a couple with two children under the age of 14, £3,385 per month for a single person with two children under the age of 14, £2,825 per month for a couple with no children, and £1,890 per month for a single person with no children. 

While the variations between households means there are some very well-off households as well as very poor ones in each region, the median numbers do tell us a lot about the relative prosperity of each region, with London and the South East being significantly more prosperous compared with Wales, the three Northern regions of England, and the West Midlands.

This chart was originally published by ICAEW.

ICAEW chart of the week: US and China trade

Our chart this week looks at trade between the US and China following the 145% tariffs imposed on China by President Trump in the latest twist in his global trade war.

A three-column step chart showing the trade balance between the US and China. 

China exports to the US: $439bn goods + $462bn = $462bn total. 

China trade surplus with the US: $263bn. 

US exports to China: $144bn goods + $55bn = $199bn total. 

11 Apr 2025. Chart by Martin Wheatcroft FCA. Source: US Bureau of Economic Analysis, 'International Trade in Goods and Services'.

According to the US Bureau of Economic Analysis, mainland China generated a trade surplus of $263bn in its trade with the US in 2024, being total exports of $462bn from China to the US less imports into China from the US of $199bn.

As our chart of the week highlights, the vast majority of China’s exports to the US in 2024 were goods, with $439bn sold to US businesses and consumers, while services exports amounted to a much smaller $23bn. Meanwhile the US exported $144bn in goods and $55bn in services in the same period.

China’s overall trade surplus of $263bn can be analysed between a surplus on goods trade of $295bn less a deficit on services of $32bn.

These numbers exclude trade between Hong Kong and the US, where Hong Kong has a trade deficit with the US of $22bn, comprising exports from Hong Kong to the US of $22bn ($7bn goods and $15bn services) less imports from the US into Hong Kong of $44bn ($29bn goods and $15bn services).

Goods exports from China to the US of $439bn in 2024 included $206bn in machinery, electrical and electronic products (including $51bn phones, $36bn computers and $18bn batteries), $42bn chemicals and pharmaceuticals, $37bn clothes and accessories, $30bn toys, games and sports equipment, $25bn metals and metal products, $19bn furniture, $19bn plastics and $17bn vehicles, together with $44bn in other goods. 

Goods imported by China from the US of $144bn included $28bn in machinery, electrical and electronic products (including $9bn integrated circuits), $23bn food and drink (much of which was animal foodstuffs), $21bn chemicals and pharmaceuticals, $15bn fuel, $12bn aircraft, and $7bn metal and metal products, together with $35bn in other goods. 

While the imposition of such high tariffs on China is likely to cause US consumers and businesses to switch to other sources where they can, in many cases this will not be possible – especially in the near term. This is likely to be the case for the significant proportion of China’s exports that are intermediate goods used by US manufacturers to make their own products – many US businesses reliant on Chinese inputs could find they are no longer competitive with suppliers from elsewhere in the world that are now subject to ‘just’ 10% tariffs (or 25% in the case of cars, steel and aluminium).

So, while we can’t predict what is going to happen in the global trade war launched by President Trump, the current state of affairs of 10% base import tariffs on almost all countries and 145% tariffs on imports from China seems unlikely to last indefinitely.

This chart was originally published by ICAEW.

ICAEW chart of the week: Trade with the US

Our chart this week looks at trade with the US in light of the 10% tariffs imposed on the UK by President Trump on ‘liberation day’.

A three-column step chart showing the difference between UK exports to and imports from the US. 

UK exports to the US: £58bn goods + £124bn services = £182bn. 

UK trade surplus with the US: £71bn.   

UK imports from the US: £56bn goods + £55bn services = £111bn.  


4 Apr 2025. Chart by Martin Wheatcroft FCA. Design by Sunday. Source: DBT, 'United States Trade and Investment Factsheet, 21 Feb 2025'.

According to the UK Department for Business and Trade, the UK generated a trade surplus of £71bn during the four quarters ended 30 September 2024, being the difference between seasonally adjusted numbers for exports of £182bn from the UK to the US less imports from the US into the UK of £111bn. 

As our chart of the week highlights, goods exports to and imports from the US comprised £58bn and £56bn respectively, while services exports to and imports from the US were £124bn and £55bn.

The trade surplus with the US of £71bn for the year to September 2024 can be analysed between a surplus on goods of just under £2bn and a surplus on services of slightly more than £69bn, according to the statistics collected by the UK Office for National Statistics (ONS).

The £2bn surplus on goods in favour of the UK contrasts with the corresponding US statistics, which report a trade surplus in goods in favour of the US of $12bn (£9bn) in 2024, based on exports from the US to the UK of $80bn (£62bn) less imports from the UK into the US of $68bn (£53bn).

According to non-seasonally adjusted data from the ONS, goods exports to the US in the four quarters to September 2024 totalled £60bn (£2bn more than the £58bn shown in the chart), comprising £37bn in manufactured goods (including £8bn cars, £5bn engines and £2bn aircraft), £7bn pharmaceuticals, £5bn other chemicals, £3bn metals, £3bn food, drink and tobacco, £3bn oil, and £2bn other goods and materials.

Meanwhile non-seasonally adjusted data on goods imports from the US in the same period of £57bn (£1bn more than in the chart) comprised £25bn manufactured goods (including £6bn engines, £3bn aircraft and £1bn cars), £15bn oil and gas, £4bn pharmaceuticals, £4bn other chemicals, £2bn metals, £1bn food, drinks and tobacco, and £6bn of other goods and materials.

The US is the UK’s biggest individual trading partner, with exports to the US representing 22% of total UK exports (goods: 16% of total goods exports; services: 27% of total services exports) and imports representing 13% of total imports (goods: 10% of total goods imports; services: 19% of total services imports).

These numbers compare with the UK’s trade with the EU in the year to September 2024, where exports to the EU were £346bn or 41% of total exports (goods: £178bn or 48% of total goods exports; services: £168bn or 36% of total services exports) and imports from the EU were £445bn or 52% of total imports (goods: £312bn or 55% of total goods imports; services: £133bn or 45% of total services imports).

The UK government was no doubt relieved to have ‘only’ been targeted with 10% tariffs by President Trump. It will also be hopeful that the position of both the UK and US believing they have a small surplus in their goods trade with each other will help in the negotiations for a UK-US trade deal that could potentially see those tariffs lifted.

The government will also be hoping that the global trade war on goods doesn’t affect the UK’s services trade too much, given its importance as an export earner.

This chart was originally published by ICAEW.

ICAEW chart of the week: Pre-Spring Forecast forecast

Our chart looks ahead to next week’s Spring Statement by looking back at the fiscal forecast prepared by the OBR last October.

A seven-column chart showing the OBR forecast for the deficit from October 2024, prior to its March 2025 to accompany the Spring Statement. 

2023/24 Outturn: Current budget deficit (£61bn) + net investment (£70bn) = Fiscal deficit (£131bn). 

2024/25 Forecast: (£55bn) + (£72bn) = (£127bn). 

2025/26 Forecast: (£26bn) + (£80bn) = (£106bn). 

2026/27 Forecast: (£5bn) + (£83bn) = (£88bn). 

2078/28: £11bn current budget surplus + (£83bn) net investment = (£72bn). 

2028/29: £9bn + (£81bn) = (£72bn).  

2029/30: £10bn + (£81bn) = (£71bn). 

21 Mar 2025. Chart by Martin Wheatcroft FCA. Design by Sunday. Sources: ONS, 'Public sector finances, Jan 2025'; OBR, 'Economic and fiscal outlook, Oct 2024'.

There has been some confusion on both the title of next week’s Spring Forecast and whether it will or will not constitute a formal ‘fiscal event’. 

Traditionally, each Chancellor of the Exchequer stands up in Parliament twice a year to announce policy decisions on tax, spending and borrowing, and to set out the latest economic and fiscal forecasts, which since 2010 have been prepared by the independent Office for Budget Responsibility (OBR). One of these fiscal events is a ‘Budget’, which involves requesting parliamentary approval of the annual budget for the upcoming financial year, while the alternate has historically been described as a ‘Statement’.

Chancellor Rachel Reeves set out an ambition on taking office for there to be only one fiscal event a year – an Autumn Budget – mostly in the hope of creating a more stable tax system by reducing the frequency of tax changes, but also to provide a more stable budgeting framework for the public sector. However, she is still legally required to present fiscal forecasts to Parliament twice a year, and so HM Treasury’s decision to relabel the second event as a Spring Forecast was originally intended to emphasise that there wouldn’t be any major tax or spending changes between Budgets.

Unfortunately for the Chancellor, weak economic data – and what that implies for the profile of public spending of tax receipts and public spending over the next five years – mean that she has been unable to achieve her hope of a policy-decision-free Spring Forecast on this, her first attempt. 

Instead, the government has brought forward from later in the year its anticipated reform of disability benefits to ensure the associated cost savings are reflected in the new OBR forecast, while there are also rumours that she may, for the same reason, revise down the total amount of public spending allocated to this summer’s three-year Spending Review.

The tight fiscal situation is illustrated by our chart this week, which sets out how the current budget balance was expected to turn from deficits of £61bn, £55bn, £26bn and £5bn between 2023/24 and 2026/27 to surpluses of £11bn, £9bn and £10bn between 2027/28 and 2029/30.

Our chart also shows how public sector net investment of £70bn, £72bn, £80bn, £83bn, £83bn, £81bn and £81bn between 2023/24 and 2029/30 added to the current budget balance was expected to result in fiscal deficits of £131bn, £127bn, £106bn, £88bn, £72bn, £72bn and £71bn between 2023/24 and 2029/30 respectively.

The Chancellor’s primary fiscal rule is to achieve a current budget surplus by 2029/30, but the £10bn headroom against this target represents just 0.9% of projected receipts of £1,440bn and 0.7% of projected total managed expenditure of £1,510bn in 2029/30. 
A deteriorating economic outlook is believed to have seen this headroom evaporate in the working projections presented by the OBR to the Chancellor as part of the Spring Forecast process – at least before taking account of any offsetting decisions by the Chancellor.

Similarly, the Chancellor may also need to take action to ensure that her secondary fiscal rule – for the debt-to-GDP ratio to fall between March 2029 and March 2030 – is met. This test (not shown in the chart) also had a relatively low headroom of £16bn in the Autumn Budget forecast and further changes to government plans may also be required to stay within it.

Many of the references in the media and elsewhere to the Spring Statement next week are likely to be from people who didn’t see the announcement from HM Treasury about the name change. We did get the memo, but on reflection we think sticking with the former title is going to be more appropriate on this occasion.

This chart was originally published by ICAEW.

ICAEW chart of the week: Quangos

Talk of a ‘bonfire of quangos’ prompted our chart this week to look at how the number of central government public bodies has grown significantly over the past decade.

A three-column chart showing the number of quangos in January 2015, 2020 and 2025. 

2015 - 24 ministerial departments, 23 non-ministerial departments, 346 agencies and public bodies, 12 public corporations and 70 high-profile groups = 474 in total.

2020 - 25, 20, 408, 12 and 90 = 555.

2025 - 24, 20, 424, 19 and 116 = 603. 


14 Mar 2025. Chart by Martin Wheatcroft FCA. Design by Sunday. Source: HM Government, 'gov.uk/government/organisations'.

The prime minister’s recent pledge to tackle the “flabby” state has brought into focus the growth over the past decade in the number of what used to be called quangos (quasi-autonomous non-governmental organisations) but now tend to be described as arms-length public bodies.

Our chart this week is taken from the list of government departments, agencies and public bodies on gov.uk, showing how the number of central government public bodies has grown from 474 in January 2015, to 555 in January 2020 and to 603 in January 2025. 

These numbers exclude the three devolved administrations, local authorities, schools, hospitals, police and fire services etc, and so are only a subset of the estimated 10,000 public bodies that exist in the UK. Scottish and Welsh government departments and many Scottish and Welsh public bodies are excluded from the list, but Northern Ireland public bodies are included, presumably because they are run from London during periods when the Northern Ireland executive is suspended.

The number of government departments increased from 24 in 2015 to 25 in 2020 with the creation of the Department for Exiting the European Union (DExEU) and the Department for International Trade (DIT) offset by the merger of the energy and business departments. This fell back to 24 in 2025 following the abolition of DExEU, the merger of the Department for International Development with the Foreign Office, and the merger of DIT with the business department (a reduction of three) offset by the recreation of a separate Department for Energy Security and Net Zero and the establishment of a new Department for Science, Innovation and Technology (an increase of two).

Non-ministerial departments are 20 arms-length bodies that have budgets voted on in Parliament, including the Supreme Court, HM Revenue & Customs, National Savings & Investments, Crown Prosecution Service, National Crime Agency, Serious Fraud Office, Government Legal Department, Government Actuary’s Department, Food Standards Agency, Forestry Commission, HM Land Registry, the National Archives and the UK Statistics Authority, as well as assorted regulators comprising the Charity Commission, Competition and Markets Authority, the Office for Rail and Road, Ofgem, Ofqual, Ofsted and the Water Services Regulation Authority. There were 22 in 2015, but Ordnance Survey was reclassified to be a public corporation, while UK Trade & Investment became part of DIT when it was formed and is now part of the Department for Business and Trade.

The number of agencies and public bodies increased from 346 in January 2015 to 408 in 2020 and 424 in January 2025. These are arms-length public bodies generally funded from government departmental budgets, ranging from the Advisory Committee on the Microbiological Safety of Food, Arts Council England, the British Business Bank, the Civil Nuclear Police Authority and Companies House to the Imperial War Museum, Law Commission, Maritime and Coastguard Agency, National Lottery Heritage Fund, Office for Students, Peak District National Parks Authority, Pubs Code Adjudicator, Rail Accident Investigation Branch, Royal Mint, Sport England, Student Loans Company, UK Atomic Energy Authority, UK Space Agency, and Youth Justice Board for England and Wales, to name but a few.

The increase between 2015 and 2020 was exaggerated by the inclusion of Northern Ireland public bodies and some reclassifications of existing bodies to the public sector, such as Network Rail and the Financial Reporting Council. However, after the cull undertaken by the coalition government between 2010 and 2015, there was a steady pace of new public bodies created, ranging from the Birmingham Organising Committee for the 2022 Commonwealth Games, College of Policing, Commission for Countering Extremism, Independent Anti-Slavery Commissioner to the Oil and Gas Authority (now North Sea Transition Authority), Office of Tax Simplification and the UK Holocaust Memorial Foundation.

Despite the abolition of the Office of Tax Simplification, the number of quangos has continued to rise since 2020, with many more created over the past five years. These have included the Advanced Research and Invention Agency, Electricity Settlements Company, Flood Re, Great British Energy, Incubator for Artificial Intelligence, Infected Blood Compensation Authority, Regulatory Horizons Council and Queen Elizabeth Memorial Committee, among many others.

Our chart also illustrates how the number of public corporations has increased from 12 in January 2015 and 2020 to 19 in January 2025, despite the reclassification of BBC World Service and S4 as agencies. These are self-funded public bodies or publicly owned businesses owned by the state, which in January 2025 comprised the Architects Registration Board, BBC, Channel 4, Civil Aviation Authority, Crossrail International, DfT Operator, Historic Royal Palaces, London and Continental Railways, National Energy System Operator, NEST, National Physical Laboratory, Office for Nuclear Regulation, Oil and Pipelines Agency, Ordnance Survey, Pension Protection Fund, Post Office, Royal Parks, Sheffield Forgemasters and the UK National Nuclear Laboratory.

The remaining category is what are described as high-profile groups, which grew from 70 identified bodies in January 2015 to 90 in January 2020 and 116 in January 2025. These are mostly organisations inside government departments, such as the Defence Infrastructure Organisation and National Space Operations Centre within the Ministry of Defence, HM Passport Office and Immigration Enforcement within the Home Office, and the Office for Product Safety and Standards and Office of Trade Sanctions Implementation within the Department for Business and Trade. This group also includes professions within government, such as the government economic and statistical services, policy, legal, planning, property, security, tax, social research, and science and engineering professions, and the commercial, finance and operational research functions, for example. 

The planned bonfire of quangos is likely to find that it is a lot more difficult than it sounds. While it is possible to scrap, merge or reform many of these organisations – whether they meet the definition of a quango or not – almost all of these organisations exist for a reason.

This chart was originally published by ICAEW.

ICAEW chart of the week: Gold

With President Trump planning to visit Fort Knox to check up on the US government’s gold reserves, my chart for ICAEW this week looks at just how much gold is owned by governments around the world.

According to the latest statistics from the World Gold Council, sourced principally from the International Monetary Fund (IMF), governments and international financial institutions around the world own 35,864 tonnes of gold. Much of this gold sits in the Bank of England, Fort Knox and in central bank vaults around the world.

At a price of around £74 per gram, the total value of ‘government gold’ adds up to somewhere in the region of £2.7trn. This is estimated to be around one-sixth of the total above-ground stock of gold in the world.

While the US is the largest individual holder of official gold reserves with 8,133 tonnes of gold worth around £600bn, the 27 countries of the EU and the European Central Bank collectively own a total of 11,719 tonnes of gold worth approximately £870bn. This includes Germany with 3,352 tonnes, Italy 2,452 tonnes, France 2,437 tonnes, Netherlands 615 tonnes, the European Central Bank 507 tonnes, Poland 448 tonnes, Portugal 383 tonnes, Spain 282 tonnes, Austria 280 tonnes, Belgium 227 tonnes, Sweden 126 tonnes, Greece 115 tonnes, Hungary 110 tonnes, Romania 104 tonnes and other EU member states with 281 tonnes.

The next biggest holder of gold is the IMF with 2,814 tonnes (worth around £210bn), followed by Russia with 2,336 tonnes (£175bn), China 2,280 tonnes (£170bn), Switzerland 1,040 tonnes (£77bn), India 876 tonnes (£65bn), Japan 846 tonnes (£63bn), Türkiye 615 tonnes (£46bn), Taiwan 424 tonnes (£31bn), Uzbekistan 383 tonnes (£28bn), Saudi Arabia 323 tonnes (£24bn), the UK 310 tonnes (£23bn), Lebanon 287 tonnes (£21bn) and Kazakhstan 284 tonnes (£21bn).

The total for other countries adds up to 3,194 tonnes worth, or around £235bn or so, including Thailand 235 tonnes, Singapore 220 tonnes, Algeria 174 tonnes, Iraq 163 tonnes, Venezuela 161 tonnes, Libya 147 tonnes, Brazil 130 tonnes, Philippines 130 tonnes, Egypt 127 tonnes, South Africa 125 tonnes, Mexico 120 tonnes, Qatar 111 tonnes, South Korea 104 tonnes and the Bank for International Settlements 102 tonnes. 

While the level of official gold holdings is partly driven by the economic size of the countries concerned, it also depends on their reserve strategies, with US, German, French and Italian gold holdings making up around 75%, 74%, 72% and 71% of their official reserves respectively, in contrast with 6%, 9%, 11% and 15% for China, Switzerland, India and the UK, for example. 

President Trump’s plan to visit Fort Knox to personally inspect his nation’s gold holdings reflects one of the benefits of investing in a physical commodity such as gold – you can count gold bars, weigh them and check their purity, as well as admire its shiny quality. He may have a less satisfying experience in verifying any future strategic crypto-currency reserve, where entries in a ledger are somewhat more ephemeral.

This chart was originally published by ICAEW.


ICAEW chart of the week: UK Regular Forces

My chart for ICAEW this week illustrates how soldier, sailor and aircrew numbers have fallen from 338,000 fifty years ago to a new low of 136,000 on 1 Jan 2025. Could this be the turning point now that defence spending is back on the agenda?

Stacked area chart showing decline in the size of the UK Regular Forces from 338,000 in 1975 to 136,000.  

Analysed between the British Army (167,000 to 74,000), Royal Navy (76,000 to 32,000) and the Royal Air Force (95,000 to 30,000). 

The numbers fall in the late 1970s then increase again in the early 1980s before falling from 1985 onwards, accelerating in the late 1990s. The numbers stabilised between 2002 and 2008 before starting to fall again, except for a small peak around 2012 and another small peak (at a much lower level) in 2022, before falling again since then. 

Chart by Martin Wheatcroft FCA. Design by Sunday. 

Source: Ministry of Defence, 'Quarterly service personnel statistics: 1 Jan 2025'.

The latest armed forces personnel statistics published by the Ministry of Defence on 20 February 2025 report that UK Regular Forces fell from 136,861 on 1 October 2024 to 136,117 on 1 January 2025, which we have rounded to 136,000 for the purpose of my chart this week. This is made up of just under 74,000 members of the British Army, just under 32,000 in the Royal Navy, and just over 30,000 in the Royal Air Force (RAF).

These numbers exclude around 4,000 Gurkhas, 32,000 volunteers in the Army, Navy and RAF Reserves (including some who are mobilised) and around 8,500 other military personnel.

This is a significant decline from the 338,000 regular service personnel (167,000 in the British Army, 76,000 in the Royal Navy and 95,000 in the RAF) that were in the UK’s armed forces on 1 April 1975. 

While some of this decline is due to automation and a shift of some activities from military to civilian staff, the main reason for the decline has been decisions by government to reduce our military capabilities over the past 50 years. Starting with the ‘peace dividend’ following the end of the Cold War, defence spending has been cut by successive governments to fund an expanding welfare state. 

As a result, serving military personnel fell rapidly during the 1990s to reach 208,000 on 1 April 2000 (110,000 in the British Army, 43,000 in the Royal Navy and 55,000 in the RAF). Numbers started to fall again from around 2005, before accelerating downwards during the austerity years of the 2010s, and then again in the past few years following the pandemic and the energy crisis.

Recent debate about the capacity of the British Army to deploy a peacekeeping force to Ukraine has highlighted how few soldiers the UK now has, given our existing commitments and an increasingly concerning international security position.

Overall, the 136,000 UK Regular Forces comprise around 4% of the 3.4 million total military personnel in NATO. In 2024 this comprised 1,300,000 in the US armed forces, 1,383,000 in EU countries who are also members of NATO (including 216,000 Polish, 205,000 French, 186,000 German, 171,000 Greek and 117,000 Spanish soldiers, sailors and aircrew), Türkiye 481,000, UK 138,000 (last year), Canada 77,000 and other non-EU European countries 39,000 (mainly Norway 24,000). 

This may not be the nadir for the UK armed forces in terms of military strength, as numbers are likely to continue to fall over the next few quarters. However, the indications are that the UK is likely to switch to a path of increasing both defence spending and the number of soldiers, sailors and aircrew as it responds to calls from the US for European countries to increase their contribution to NATO and, more importantly, to address a much higher international risk environment.

This chart was originally published by ICAEW.