£132.5bn that is not counted, and why

What they are

HM Treasury publishes spending in two ways. Spending on services divides the year's spending between departmental groups and functions, and is what every section on this site is measured against. Total managed expenditure is the National Accounts measure, the one the public finances are reported in. They cover almost the same money. HM Treasury explains the difference in PESA 2026, Annex E, paragraph E.5:

"The main difference from TME is that expenditure on services does not include general government capital consumption (depreciation) and does not reverse the deduction of certain VAT refunds in the budget-based expenditure data. It also includes a small number of items that are in budgets but not in TME."

So the adjustments are mainly two things:

• Depreciation. The National Accounts count the wearing out of roads, buildings and equipment each year as a cost. No money is paid when that happens. The money was spent when the asset was bought, and that payment is in spending on services in the year it was made.
• VAT refunded within government. Public bodies pay VAT on what they buy, and HMRC refunds some of it to them. The payment to the supplier is already in spending on services; the refund is money moving from one part of government to another, and ends where it began.

Neither has a recipient outside government that could be followed, and neither belongs to one section, so PESA does not divide them between sections. Counting them would lower every percentage on this site without changing what can be followed.

The figures

PESA does not publish the £132.5bn split into depreciation, VAT refunds and the rest, so it is not split here. A related reconciliation, from departments' budgets to total managed expenditure, is in PESA 2026 table 1.13 and Annex D.

PESA 2026 on GOV.UK · How the figures are made