Abdulalah Al-Jobore
Unit 38 - Business and the economic environment
P3
P3 identify the impact of government spending on a selected business
Government spending
The government policy and spending are interlinked with each other as more often the spending
follows the government policy and specially in term of the fiscal policy where it all about money and
spending strategy. Overall, the government spending could have a huge impact on Jaguar Land
Rover as it is affecting the demand of products and service in the economy, which could really
impact on a small and large scale.
Government spending refers the spending by the public sector from the government on goods and
service such as public service including education, health care and so on. This is usually influenced by
the type of the government that is controlling and ruling the country and its economic. The UK
government and other modern countries oversea, take in account the fact that they have to stabilise
their economies by spending the government money from taxes and other type of revenues in
different are where it is required to stimulate or reduce the aggregate demand. This is also
interlinked with regional policy where the government have spending more money on specific
regions in the country where they are considered as economically poorer than its other region
neighbours, as it might be experiencing more problems and issues that has to be addressed by the
government in order to improve the economic as a whole.
According to UK Public Spending, in the fiscal year ending in 2019, the total UK public spending,
including ‘’central government and local authorities, was £817.5 billion.’’. This huge spending figure
was covering £165.8 billon on pensions, £151.9 billion on health care, and £87.7 billion on
education. This shows that the pensions and the social welfare protection is the largest element of
the government spending, with health care (NHS) and education the biggest elements in the
government spending [1]. This government spending could have some positive and negative impacts
on Jaguar Land Rover as well as their business confidence.
Public service via central and local government agencies
Within the UK, the public service refer to any service provide by the government agency including
things that helps the people to have a better living standards and environment such as education,
health care (NHS) and police. The UK government priorities for the UK as whole is to put more
investments in public service and more specially the health care (NHS) and education and as a part
of the improving strategy towards the economy of the country.
The public service within the UK is divided between the central government and the local
government. One of the example of services that runs by the central government is the National
Health Service as part of the health care sector, however they are some part of the health care
sector where it runs locally by the local government, which have primary care trusts to deal with the
health care in the area including investment and spending. Education strategy usually considered by
the local authorise which it looks after the education needs of the local individuals, however the
Department for School and Families usually have the overall decision on how the education sector
has to be operated in the country as whole. In additions, the Audit Commission is one of the central
government agency that is operating in order to monitor the local government agency compare how
well they are doing in term how wisely they are spending the government money .
Therefore, the government spending on public services could have both sided impacts on Jaguar
Land Rover. This is because if the government decided to increase government spending on public
sectors such as social welfare protection, health care and education, this is might means there will
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