Iraq, Afganistan takes a large slice, whilst all the ineffective quangos that were set up under blair also take a large slice.
Northern Rock was a drop in the ocean to some of the hand outs this government gives to some third world countrys. This aid usually ends up in some other crooked leaders pocket and never used for its original purpose.
The government itelf also takes a hefty swipe out of what is available.
The rest is down to wastage, miss management and total inefficiency.

Wars, propping up banks, foriegn aid, legal battles caused by the governments lack of respect for individuals and international law, mps pockets, pet projects, creating a police state, focus groups, Europe, and so the list goes on..
Centralised government can never be anything but wasteful, and they treat the taxpayers pockets as if they are their own personal piggy bank.

Where taxpayers money is spent

Total public spending is expected to be around £618 billion for the coming year, around £10,100 for every man, woman, and child in the UK. It is set to rise to £647 billion in 2009-10, and £680 billion in 2010-11.

Where taxpayers money is spent

The pie chart did not copy, but it can be found here:

http://budget2008.treasury.gov.uk/where_money_is_spent.htm

You Brits are small beer, in terms of wasteful and pointless government expenditures and amassing public debt, compared with my own country, the USA. Here, and probably in your country too, one of the least recognized and costliest taxes is not in the form of payments to the US Treasury -- it is inflation, which diminishes the value of our money itself. A near relative is artifically low inerest rates, coupled with enormous deficits, which has brought the US dollar to its lowest value in memory -- again, a cruel and unfair tax.

About the only consolation we have -- and the only consolation for you Brits also -- is that we do not get all the government we pay for. The level of government which we do receive, at ruinous expense, is already far too much. God forbid that we should get even more government, if the wasted money were actually spent for government activities.