Bonds are issued by companies
and the Government
The government issues bonds called Gilts
The Government sells bonds to fund expenditures. They are called "Gilts" that have short and long maturities.
Government bonds pay the least interest because they are considered very safe - it is unlikely that the UK Government will go bust!
Gilts are considered almost as safe as cash. You can buy and sell them easily. They are very liquid and investors know with near certainty that they will get their money back at maturity.
Just bear in mind that between issuance and maturity, gilt prices vary and so if you sell before maturity, you may make a capital gain or loss. This is explained in more detail here ...
Companies issue "corporate bonds"
Companies use bonds to fund other maturing debt (including other bonds), for acquisitions, growth and general expenditures.
The main reasons issuer's like bonds is that they tend to have maturities of between 5-12 years and they only pay interest. Long-dated funding means that companies don't have to worry about refinancing it frequently as they do with bank debt and paying interest-only means they can retain more cash in the business for growth.
For you, the investor, this translates into an investment opportunity that is long-dated and which pays you a consistent amount of interest on the amount invested.