National statistics

Local authority revenue expenditure and financing England: 2021 to 2022 final outturn (Revised)

Updated 23 November 2023

Applies to England

In this release:

This statistical release is the fourth release of the 2021-22 local authority revenue expenditure data, and now includes data from 422 of 426 local authorities, up from 415 in the previous release. England estimates have changed very little since the previous release, in March 2023.

There were significant impacts on local authority finances following the outbreak of the COVID-19 pandemic in March 2020, particularly in 2020-21, and consequently expenditure in 2020-21 was substantially higher compared with 2019-20.

Net current expenditure on services

• Local authorities’ total net current service expenditure was £107.1 billion in 2021-22. In real terms, this was 1.5% lower compared to 2020-21, and 8.2% higher than in 2019-20.

• The categories of services with the largest changes in net current expenditure compared to 2020-21 were (in real terms):

  • Highways and transport: down by £2.7 billion (-34%) to £5.3 billion. This peaked in 2020-21 driven by lower public transport fares and parking fees income. In 2021-22 it was still 36% (£1.4 billion) higher than in 2019-20.

  • Children’s Social Care: up by £535 million (+5.0%) to £11.3 billion.

Revenue Expenditure

• The broader measure of local authority Revenue Expenditure (see Definitions section) totalled £111.2 billion across all local authorities in England in 2021-22. In real terms, this is 0.9% lower than 2020-21 and 8.3% higher than 2019-20.

Revenue Account Reserves

• Local authorities’ un-ringfenced revenue account reserves increased over the period of the COVID-19 pandemic from £23.5 billion at 31 March 2020 to an estimated £34.0 billion at 31 March 2022.

Release date: 23 November 2023
Responsible Statistician: Gavin Sayer
Contact: lgf1.revenue@levellingup.gov.uk
Media enquiries: NewsDesk@levellingup.gov.uk

Introduction

Local government expenditure accounts for around a fifth of all government spending and the majority of this is shown in local authorities’ revenue accounts.

This statistical release, and all its associated tables, present outturn data on the revenue expenditure of local authorities in England for the financial year 2021-22. These are based on data from 422 (99.1%) of 426 local authorities in England in 2021-22 and include imputed estimates to provide totals for the whole of England. This is the fourth release of data for Revenue Outturn 2021-22. The first, labelled ‘Provisional’, was published on 20 October 2022. The second, labelled ‘Final’, was published on 8 December 2022. Eleven authorities had not submitted data in time for the third release which was published on 23 March 2023.

The England estimates from the Subjective Analysis Return, which is collected from a sample of local authorities have not been updated, as any update would be negligible. All other data and outputs, which are all published at the individual local authority level, have been updated to include data from the seven authorities that were missing from the release in March and any updated data from other local authorities. The timing of the next release will depend on when we receive data from the remaining missing authorities.

All the data in the release are compiled from the Revenue Outturn (RO) returns submitted by local authorities in England to the Department for Levelling Up, Housing and Communities. Coverage includes, but is not limited to, local councils i.e.: London Boroughs, Metropolitan Districts, Shire Counties, Shire Districts and Unitary Authorities, as well as other type of local authority types: police, fire, waste, park and combined authorities, and the Greater London Authority.

The total number of local authorities is lower than in 2020-21 due to the following local government reorganisations:

• On 1 April 2021, Northamptonshire County Council and the seven district councils within Northamptonshire ceased to exist. These were replaced by the following two unitary authorities:

  • North Northamptonshire council, covering the area of these former district councils: Corby, East Northamptonshire, Kettering and Wellingborough.

  • West Northamptonshire council, covering the area of these former district councils: Daventry, Northampton and South Northamptonshire.

• On 1 April 2021, the Hampshire and Isle of Wight Fire and Rescue Authority was created. Isle of Wight’s fire service has merged with Hampshire Combined Fire and Rescue Authority.

Definitions of terms used in this release can be found in the accompanying Technical Notes document. The full data collection forms and guidance notes can be found in the forms section of our website.

Key contextual information

Functions and responsibilities of local government can change from year to year, so comparisons between financial years may potentially not be wholly valid. Where major changes occur, these are noted.

Figures in this report, and the associated tables and reports, are shown as net current expenditure figures. So, for example, a decrease may be driven by a decrease in expenditure or by an increase in fees or other income relating to that category of services, and conversely.

Impact of COVID-19

As a result of the impacts of COVID-19, local authorities received various additional grants. In the summary tables within this statistical release, we have adjusted totals for grants and reserves to remove those effects that are just due to timing to make the figures as comparable over time as they can be.

The adjustments relate to grants paid in March 2020 and to COVID business rate reliefs grants paid in 2020-21 and 2021-22. These are explained in ‘Revenue Expenditure Financing’.

Imputation for missing returns

As at the early November cut-off for inclusion in this publication, 4 of 426 eligible local authorities had still not provided data. England totals have been estimated by also drawing on: i) grant allocation data, where this was known, and otherwise on: ii) the proportions within previous RO data for which the missing 4 authorities accounted.

The full data submitted by local authorities, including financing and reserves items, can be found by following the link to the ‘2021 to 2022 individual local authority - outturn’ data tables.

Engagement with users and future enhancements

A Review of Local Government Finance Statistics was carried out in 2021. Consequently, there are plans for some additions to the data collected and how the data are disseminated. Exploration of feasibility is underway and changes will be implemented from 2023.

We are keen to know about the various uses to which these data are put. Therefore, please be in touch to tell us briefly, and with comments and suggestions by emailing lgf1.revenue@levellingup.gov.uk.

Local Authority Expenditure

Most local authority spend is on the provision of services. The Revenue Outturn data records current expenditure by detailed categories of service, and these sum up to ‘Total Service Expenditure’.

‘Revenue Expenditure’ also accounts for any costs, notably those which do not fall wholly within the financial year, but which are charged to the year’s account. Most of these costs relate to repayment and management of debt, financing capital and grants that authorities receive on behalf of a third party.

Tables 1a and 1b provide a summary of the key expenditure lines for all authorities in England for the last five years in cash terms and adjusted for inflation respectively.

Table 1a: Service expenditure net of sales, fees and charges and of other income [Note 1], 2017-18 to 2021-22 (cash terms)

£ million – not adjusted for inflation

Service Category	2017-18	2018-19	2019-20	2020-21	2021-22
Education [note 2]	32,265	32,233	32,603	33,410	34,839
Highways and transport [note 3]	3,997	3,857	3,757	7,844	5,331
Highways and transport (GLA only)	1,269	1,227	1,003	4,280	2,337
Social care [note 4]	24,164	25,452	26,826	29,209	30,242
of which: Children’s Social Care	8,834	9,375	9,920	10,496	11,270
Public Health	3,365	3,278	3,228	3,792	4,232
Housing (excluding Housing Revenue Account)	1,536	1,673	1,775	2,051	2,179
Cultural, environmental and planning	8,293	8,435	8,757	10,107	10,008
Police	11,165	11,426	12,203	13,083	13,607
Fire & rescue	1,972	2,005	2,158	2,194	2,267
Central services	3,065	3,011	3,251	4,077	4,091
Other Services	-19	48	42	519	255
Total Service Expenditure [Note 2]	89,803	91,417	94,600	106,284	107,051
% Difference Year-on-year	-0.7%	1.8%	3.5%	12.4%	0.7%
Total Service Expenditure excluding Education [note 5]	57,538	59,183	61,997	72,874	72,212
% Difference Year-on-year	0.8%	2.9%	4.8%	17.5%	-0.9%
Total Service Expenditure excluding Education & Public Health	54,173	55,905	58,769	69,082	67,980
% Difference Year-on-year	1.1%	3.2%	5.1%	17.5%	-1.6%
Revenue Expenditure [Note 2]	93,104	94,226	98,178	109,639	111,177
% Difference Year-on-year	-0.5%	1.2%	4.2%	11.7%	1.4%

Notes:

1. Other income includes, for example, significant funding for Adult Social Care from the NHS such as via Better Care Fund pooled budgets.
2. Expenditure on education services is not comparable between years due to a number of schools changing their status to become academies, which are centrally funded rather than funded through local authorities.
3. Much of the highways and transport expenditure during 2020-21 and 2021-22 can be attributed to the increase in grants to Transport for London, which arose as a result of lower fare income during the COVID-19 pandemic. Parking income was also significantly down in many authorities in 2020-21.
4. Adult Social Care is not shown separately since figures were published on 20/10/2022 in NHS Digital’s Adult Social Care - Activity and Finance Report, without the exclusions noted.
5. Education is excluded to provide a fairer year-on-year comparison as it is not comparable over time due to schools converting to academies and thus becoming directly funded.

Table 1b: Service expenditure net of sales, fees and charges and of other income [Note 1], 2017-18 to 2021-22 (real terms)

£ million – adjusted for inflation, in 2021-22 prices [Note 2]

Service Category	2017-18	2018-19	2019-20	2020-21	2021-22
Education [note 3]	35,276	34,514	34,104	34,170	34,839
Highways and transport [note 4]	4,370	4,130	3,930	8,023	5,331
Highways and transport (GLA only)	1,388	1,314	1,049	4,377	2,337
Social care [note 5]	26,419	27,252	28,061	29,873	30,242
of which: Children’s Social Care	9,658	10,039	10,377	10,735	11,270
Public Health	3,680	3,510	3,376	3,879	4,232
Housing (excluding Housing Revenue Account)	1,679	1,791	1,856	2,097	2,179
Cultural, environmental and planning	9,067	9,032	9,160	10,337	10,008
Police	12,207	12,234	12,765	13,380	13,607
Fire & rescue	2,156	2,147	2,258	2,243	2,267
Central services	3,352	3,224	3,400	4,169	4,091
Other Services	-21	51	44	531	255
Total Service Expenditure [Note 3]	98,184	97,883	98,955	108,703	107,051
% Difference Year-on-year	-2.2%	-0.3%	1.1%	9.9%	-1.5%
Total Service Expenditure excluding Education [note 6]	62,908	63,370	64,851	74,533	72,212
% Difference Year-on-year	-0.7%	0.7%	2.3%	14.9%	-3.1%
Total Service Expenditure excluding Education & Public Health	59,228	59,860	61,475	70,654	67,980
% Difference Year-on-year	-0.5%	1.1%	2.7%	14.9%	-3.8%
Revenue Expenditure [Note 3]	101,793	100,892	102,699	112,134	111,177
% Difference Year-on-year	-2.0%	-0.9%	1.8%	9.2%	-0.9%

Notes:

1. Other income includes, for example, significant funding for Adult Social Care from the NHS such as via Better Care Fund pooled budgets.
2. All figures have been adjusted for inflation. This is described in the Technical Note.
3. Expenditure on education services is not comparable between years due to a number of schools changing their status to become academies, which are centrally funded rather than funded through local authorities.
4. Much of the higher highways and transport expenditure during 2020-21 and 2021-22 can be attributed to the increase in grants to Transport for London, which arose as a result of lower fare income during the COVID-19 pandemic. Parking income was also significantly down in many authorities in 2020-21.
5. Adult Social Care is not shown separately since figures were published on 20/10/2022 in NHS Digital’s Adult Social Care - Activity and Finance Report, without the exclusions noted.
6. Education is excluded to provide a fairer year-on-year comparison as it is not comparable over time due to schools converting to academies and thus becoming directly funded.

Expenditure by service

Service Expenditure is classified under twelve main categories of service type, such as Education, Adult Social Care and Public Health, plus an ‘Other Services’ category catching all expenditure that authorities are unable to allocate to specific areas.

Tables 1a and 1b also show a five-year time series of Total Service Expenditure and Revenue Expenditure. Table 2 provides a more detailed breakdown of the components of each expenditure category for all local authorities in England for 2020-21 and 2021-22.

Expenditure by local authorities on the Education service category has tended to decrease in real terms over recent years, largely due to the ongoing change in status of local authority schools to centrally funded academies. As such, these figures are not comparable over time. Consequently, excluding Education from Total Service Expenditure, provides a fairer year-on-year comparison.

Total Service Expenditure for all local authorities in England was £107.1 billion in 2021-22, a decrease of £1.7 billion (-1.5%) in real terms compared to 2020-21. Total Service Expenditure excluding Education Services was 3.5% lower than 2020-21 in real terms.

The largest components of change in (net current) service expenditure (in real terms) from 2020-21 to 2021-22 were as follows:

i) Highways and transport: down £2.7 billion (-33.6%) to £5.3 billion in 2021-22. This was still 35.6% (£1.4 billion) higher than the total of £3.9 billion in 2019-20. This peaked at £8.0 billion in 2020-21 much of which was due to the increase in grants to Transport for London, which were necessary as a result of much lower fare income; GLA’s net expenditure on highways and transport increased from £1.0 billion in 2019-20 to £4.4 billion in 2020-21, and then decreased to £2.3 billion in 2021-22. Also in 2020-21, many local authorities reported lower income from parking and fares.

ii) Children’s Social Care: +£535 million (+5.0%) to £11.3 billion.

Note on overall estimate of public spending on Adult Social Care

The figures in the tables of this document are, with the exception of table 2x, net of sales, fees and charges, and net of other service-specific income (but not net of grants from Central Government). Other Income includes, for example, significant funding for Adult Social Care from the NHS such as via Better Care Fund pooled budgets.

To reflect the full extent of public expenditure on Adult Social Care, it is necessary to consider funding from the NHS in addition to net current expenditure by local authorities.

NHS Digital’s Adult Social Care Activity and Finance Report 2021-22 was published on 20th October 2022 and shows net current expenditure as reported in its Adult Social Care Financial Returns from local authority social service departments, alongside the planned Better Care Fund (BCF) expenditure on adult social care for 2021-22. This should be added to local authorities’ net current expenditure on adult social care to give the best estimate of total government net current expenditure on adult social care. In 2021-22, that was £2.58 billion.

The majority of these funds are transferred to local authorities. Correspondingly, these are recorded as ‘other income’ in the returns to DLUHC. They are therefore reflected within total (i.e., gross) expenditure, but not within net current expenditure. The remainder of the Better Care Fund planned expenditure is for social care activities delivered by other providers.

Table 2a: Revenue Expenditure and Financing Summary, England, 2020-21 and 2021-22

£ million - not adjusted for inflation

Service Category	Net current expenditure [Note 1] 2020-21 final	Net current expenditure [Note 1] 2021-22 provisional	Net current expenditure [Note 1] 2021-22 final - updated	Change between 2020-21 and 2021-22 final - updated	Percentage Change between 2020-21 and 2021-22 final - updated
Education services	33,410	34,866	34,839	1,429	4
Highways and transport services (excl. GLA)	3,564	2,948	2,994	-571	-16
Highways and transport services (GLA only)	4,280	2,337	2,337	-1,943	-45
Children’s Social Care services	10,496	11,283	11,270	774	7
Adult Social Care services	18,713	19,105	18,972	259	1
Public Health services	3,792	4,213	4,232	440	12
Housing services (excluding Housing Revenue Account)	2,051	2,129	2,179	128	6
including:
Homelessness:         Prevention	302	350	314	12	4
Homelessness:         all other	707	752	766	59	8
Cultural services	2,656	2,397	2,436	-221	-8
Environmental services	5,517	5,516	5,511	-5	0
Planning and development services	1,933	2,105	2,061	128	7
Police services	13,083	13,607	13,607	524	4
Fire and rescue services	2,194	2,349	2,267	74	3
Central services	4,077	4,071	4,091	14	0
Other Services	519	203	255	-264	-51
Total Service Expenditure	106,284	107,127	107,051	767	0.7
Housing Benefits	14,984	14,002	13,907	-1,078	-7
Parish Precepts	596	618	618	22	4
Levies	30	-102	-13	-43	-144
Trading Accounts and Other Adjustments	-642	-393	-433	209	-33
Total Net Current Expenditure	121,253	121,252	121,129	-123	-0.1
Capital financing [note 2]	5,117	5,483	5,482	366	7
Capital expenditure charged to Revenue Account (CERA)	1,720	2,493	2,426	706	41
Flexible use of Capital Receipts	-114	-100	-88	26	-23
Capitalisation by a direction under Section 16(2)b	-116	-69	-69	47	-40
Bad debt provision	320	140	133	-187	-58
Flood defence payments to Environment Agency	39	39	39	0	1
Private Finance Initiative (PFI) schemes - difference from service charge	40	-85	-2	-43	-105
Appropriations to(+)/ from(-) financial instruments adjustment account	46	-5	-11	-58	-125
Appropriations to(+)/ from(-) unequal pay back pay account	1	14	14	13	976
less interest         receipts	1,482	1,507	1,610	127	9
less specific         grants outside         AEF[note 3]	16,433	15,334	15,230	-1,202	-7
less Business         Rates         Supplement	173	323	323	150	87
less         Community         Infrastructure         Levy (CIL)	335	374	413	78	23
less Carbon         Reduction         Commitment	3	0	0	-3	-97
Appropriations to(+)/from(-) dedicated schools grant adjustment account	-241	-290	-300	-59	24
Revenue Expenditure	109,639	111,334	111,177	1,538	1.4

Notes:

1. Net of sales, fees and charges and net of recharges and funding from other local authorities or delivery bodies such as from the NHS (e.g., the Better Care Fund). The RO3 table shows this within the ‘Other income’ as well as local authority gross expenditure.
2. Includes provision for repayment of principal, leasing payments, external interest payments and HRA item 8 interest payments and receipts.
3. Aggregate External Finance; see Definitions in the Technical Note. Specific grants outside Aggregate External Finance have been falling over recent years due to the move from Housing Benefit, which passes through local authorities’ Revenue Accounts (outside of Service Expenditure), to Universal Credit.

Chart A illustrates proportions of expenditure by Service. Education and Social Care services combined continue to represent over half of all local authority service expenditure.

Chart A: Proportion of budgeted service expenditure by service, England, 2021-22

(a) ‘Other’ includes Public Health, Fire and Rescue, Housing, Central and Other services.

Housing benefits

Although not part of Service Expenditure, Housing Benefits are a large component of total local authority spending. Paid by local councils to help individuals currently on low incomes to pay for rents for both private and social housing, these are financed through subsidies from the Department for Work and Pensions (DWP). Housing Benefits expenditure decreased by £1.1 billion (7%) to £13.9 billion in 2021-22. There was a corresponding decrease in subsidies received by local authorities, and this is reflected in the ‘Grants outside Aggregate External Finance (AEF)’ category. These changes are the result of the transition to Universal Credit.

Expenditure and income

Expenditure lines in the summary tables in this release, such as in ‘Total Service Expenditure’ and each of the individual service areas, are net current expenditure i.e. expenditure minus relevant income.

Table 2x shows figures for each service line: the Total (gross) Expenditure and total service specific income. This does not include any grants from government and is composed of: sales, fees and charges, and ‘other income’. The latter comprises from transfers from other local authorities and other delivery bodies, and costs reimbursed e.g. from DWP for temporary accommodation. The Service Expenditure Summary (RSX) table associated with the release contains further columns.

For each service category, the table shows the extent to which a net change in spend in a specific service area is due to change in total expenditure or change in totals of these forms of income.

Sales, Fees and Charges income was lower during the COVID-19 pandemic, and particularly noticeable during 2020-21. This was evident in levels of income from transport fares and fees, parking charges, and charges for leisure and cultural services. A compensation scheme covered the period April 2020 to June 2021.

Table 2x: Expenditure, income and total service expenditure, England, 2020-21 and 2021-22

£ million - not adjusted for inflation

Service Category	Gross expenditure 2020-21	Sales, fees and charges 2020-21	Other income 2020-21	Gross expenditure 2021-22	Sales, fees and charges 2021-22	Other income 2021-22	Gross expenditure change between 2020-21 to 2021-22	Sales, fees and charges change between 2020-21 to 2021-22	Other income change between 2020-21 to 2021-22
Education	37,147	1,020	2,717	39,474	1,669	2,967	2,328	648	251
Highways and transport	10,875	1,661	1,371	9,602	2,482	1,789	-1,273	822	419
Highways and transport excluding GLA [note 1]	6,079	1,661	855	6,439	2,482	963	359	822	108
Children’s Social Care	11,372	161	715	12,248	182	795	876	21	80
Adult Social Care [note 2]	26,638	3,067	4,858	27,257	3,342	4,942	619	276	84
Public Health	4,019	24	203	4,556	23	302	537	-1	98
Housing (excluding HRA [note 3])	3,638	865	722	3,890	965	747	253	100	25
Cultural	3,373	295	421	3,599	672	490	225	377	69
Environmental	7,603	1,296	790	7,781	1,473	798	179	176	8
Planning and development	3,472	927	611	3,772	1,044	667	301	117	55
Police	14,341	502	756	14,999	600	791	658	98	35
Fire and rescue	2,358	55	109	2,434	55	112	76	0	2
Central [note 4]	12,116	1,144	6,895	12,554	1,237	7,226	438	93	331
Other	799	106	174	541	93	193	-257	-13	19
Total Service Expenditure	137,750	11,124	20,343	142,708	13,838	21,820	4,958	2,714	1,477

Notes:

1. Transport for London fares income does not show in Highways & Transport Sales, Fees and Charges, because TfL is a subsidiary company of the Greater London Authority. Consequently ‘gross expenditure’ reported by the GLA is lower than it otherwise would be, because fare income has effectively already been netted off. This is a general point and not specific to the period of the COVID pandemic.
2. Further aggregates of Adult Social Care Expenditure can be found in NHS Digital’s Adult Social Care – Activity and Finance Report (Adult Social Care Activity and Finance Report 2021-22, published 20 October 2022).
3. Housing Revenue Account.
4. Most of the £7 billion ‘other income’ recorded against ‘Central Services’ in 2020-21 and 2021-22 is in fact removing what would otherwise be double counting of recharges of ‘management and support services’ to more specific service categories, and income from other local authorities e.g. for shared services arrangements.

Revenue Expenditure Financing

This section outlines the key sources of funding available to local authorities to finance their spending and how these differ for 2021-22 compared to 2020-21. Any income that authorities received from sales, fees and charges, and grants passed on to a third party, are already netted off in the net current expenditure figures presented in this document. The main sources of funding available to finance revenue expenditure are locally retained business rates, Council Tax, government grants and the use of reserves.

Adjustments to financing items

A number of adjustments have been made to Tables 3, 4 and 5 to remove any effects to grants and reserves totals that are just as a result of their recording and unusual timing. These relate to:

i): Two grant payments made to local authorities at the very end of 2019-20.

ii): Legal requirements relating to payments of business rates income among local authorities, along with accountancy regulations and the timing of grants compensating local authorities for additional COVID-19 business rates reliefs in 2020-21 and 2021-22. Accountancy regulations require that COVID-19 business rates relief grant income received in 2020-21 and 2021-22, including COVID-19 Additional Relief Fund (CARF) are included in local authorities’ revenue accounts. These are shown in their ‘other earmarked reserves’ until the following year when they compensate for what would otherwise be lower retained business rates income.

In relation to i):

• Where authorities included in their Revenue Outturn 2019-20 receipt of tranche 1 of COVID-19 emergency general grant that was paid in March 2020, this is treated as if it had been received in 2020-21.

• Where authorities included in their Revenue Outturn 2019-20 regular business rates relief grant income that was brought forward to March 2020, this is netted off for 2019-20. Regular business rates relief grants feed into the final amount of retained business rates income in their 2020-21 Revenue Outturn return.

And in relation to ii):

• In the year when the compensatory grants were received, the reported amounts are netted off from: a) total grants, b) reserves movements and c) the reserve levels at the end of the year.

• The amounts reported in the following year’s figures are netted off from the reserve levels at the start of the year and adjusted from the movement out of reserves. The amounts are instead shown in the Retained Income from the Business Rates Retention Scheme line. Further details can be found in the accompanying technical notes.

Revenue expenditure financing in 2020-21 and 2021-22

Table 3 shows the funding of revenue expenditure in 2020-21 and 2021-22.

The broader measure of local authority Revenue Expenditure (see Definitions section) totalled £111.2 billion across all local authorities in England in 2021-22. In real terms, this is 0.9% lower than 2020-21 and 8.3% higher than 2019-20.

The large increase in revenue expenditure from 2019-20 to 2020-21 (+9.2% in real terms), was predominantly financed by increased central government grants. Central government grants (adjusted, notably removing COVID-19 business rate relief compensatory grants) financed £65.7 billion of local authority revenue expenditure in 2020-21, up from £48.4 billion in 2019-20, largely reflecting increased funding due to the impact of COVID-19. In 2021-22, the comparable (adjusted) grants total was £63.0 billion; this was lower because there was less COVID grant funding in 2021-22 than in 2020-21.

Table 3: Revenue expenditure financing, England, 2020-21 and 2021-22

£ million - not adjusted for inflation

Service Category	Net current expenditure 2020-21	Net current expenditure 2021-22	Change £	Change %
Revenue expenditure	109,639	111,177	1,538	1.4
Financed by: Government Grants	71,713	66,483	-5,231	-7.3
Add onto 2020-21 the COVID-19 emergency funding (first tranche) £1.6bn paid March 2020	1,375	…	…	…
Remove COVID-19 business rates reliefs paid in 2020-21	7,369	…	…	…
Remove 2021-22 COVID-19 business rates reliefs, including CARF [note 1]	…	3,433	…	…
Government Grants adjusted [note 2]	65,720	63,049	-2,670	-4.1
of which: Specific grants     inside AEF [note 3]	49,862	50,303	441	0.9
including: Dedicated         Schools Grant (DSG)	26,600	27,810	1,210	4.6
Public Health Grant         [note 4]	3,061	3,109	48	1.6
Pupil Premium Grant	1,213	1,184	-28	-2.3
New Homes Bonus	905	622	-283	-31.2
COVID -19 LA Surge         Funding	861	…	…	…
Adult Social Care         Infection Control Fund         (Round 1 and 2)	1,014	…	…	…
Local Services Support     Grant (LSSG)	21	28	7	33.2
Revenue Support Grant	1,613	1,622	9	0.6
Police grant	7,776	8,228	452	5.8
Sales, Fees and Charges Compensation Scheme	1,161	167	-994	-85.6
COVID-19 Emergency Funding (tranches 2,3,4)	3,436	…	…	…
COVID-19 Expenditure Pressures Grant	…	1,589	…	…
Council Tax Hardship Fund	475	…	…	…
Tax Income Guarantee	…	455	…	…
Local Council Tax Support Grant 2021-22	…	658	…	…
Council tax requirement	33,141	34,434	1,293	3.9
Retained income from Business Rate Retention Scheme [note 5]	16,865	17,663	799	4.7
Of which: COVID-19     business rates reliefs paid     in 2020-21 [note 6]	…	5,877	…	…
Adjusted appropriations to(-) / from (+) revenue reserves [note 2, 7, 8]	-6,189	-3,094	3,095	-50.0
of which:
Appropriations to (-) /     from (+) Schools’ reserves	-615	-150	465	-75.6
Appropriations to (-) /     from (+) Dedicated     Schools Grant	-98	-10	87	-89.4
Appropriations to (-) /     from (+) Public Health     financial reserves	-164	-147	18	-10.8
Appropriations to (-) /     from (+) Other Earmarked     reserves (adjusted)	-4,493	-2,527	1,967	-43.8
Appropriations to (-) /     from (+) unallocated     financial reserves	-819	-260	559	-68.3
Council tax collection fund surplus (+) / deficit (-) [note 9]	88	-567	-654	-
Other items	56	-357	-412	-

Notes:

1. Comprises expanded retail discount and COVID-19 Additional Relief Fund (CARF) in 2021-22. Amounts are as reported in these returns. These are lower than the grant totals since some authorities removed these amounts. Adjusted measures are unaffected because we net off only the amounts that were not removed.
2. All figures in this release are the best estimates possible having received returns for 2021-22 from 99% of eligible local authorities in England.
3. Specific grants inside AEF also includes the following grants: Private Finance Initiative (PFI), Universal Infants Free School Meals, Housing Benefit Subsidy and Council Tax Support Admin Grant, and all Other grants inside AEF. Please see the Specific and Special Revenue Grants data table (‘RG’) for more detail.
4. Public Health Grant allocations for the Metropolitan Districts of Greater Manchester are not reflected due to the devolution deal for the Greater Manchester area.
5. The adjustments in this table include adding the compensatory COVID business rate relief grants that were paid in 2020-21 into this total of Retained income from the Business Rates Retention Scheme.
6. Figures are as reported in these data returns. A minority of authorities under-reported in this sub-category, and so the figure differs from the total reported in 2020-21. The other measures (except those marked as ‘unadjusted’) in this and other tables are not affected by this.
7. Use of Reserves includes all appropriations to (-) and from (+) Revenue Account Reserves.
8. Movements to and from reserves have been adjusted for timing effects to make them as comparable as possible over time.
9. Council Tax collection fund surplus/deficit includes net collection fund surplus/deficits from the previous year.

Revenue expenditure financing trend over recent years

Table 4 shows funding of revenue expenditure in terms of government grants and locally retained income (retained income from rate retention scheme and Council Tax) since 2017-18. The table also shows whether overall local authorities have made net appropriations to or from reserves.

From 2014-15 onwards local authorities have been more reliant on locally retained income because business rates moved from being a centrally redistributed function to one where authorities retain a percentage of what they collect.

The proportion of revenue expenditure (excluding use of reserves and council tax collection fund surplus) funded from grants had fallen from 54.1% in 2017-18 to 49.9% in 2019-20, with corresponding increases in the income retained by local authorities. In 2020-21, local authorities received additional grant funding in response to COVID-19 which increased the proportion of revenue expenditure funded from grants to 56.8%. In 2021-22, this was 54.8%.

Since 2017-18, some authorities have been able to retain more than a 50% share of local business rates revenue in deals foregoing particular grants. Additionally, single year rate retention pilots took place in 2017-18, 2018-19 and 2019-20, where different authorities and different percentage shares were involved. This led to a marked increase in retained business rates income and a similar decrease in Revenue Support Grant income in these years.

The increases over the year in Council tax requirement is the result of the combination of growth in tax base and in levels of council tax.

Table 4: Financing of revenue expenditure, England, since 2017-18 [Note 1]

£ million - not adjusted for inflation

Outturn	Revenue expenditure	Government grants (adjusted) [Note 2]	% of Total [Note 3]	Retained income from Business Rate Retention Scheme	Of which: 2020-21 COVID-19 business rates reliefs [Note 4]	Council Tax	Locally retained income	% of Total [Note 3]	Adjusted use of reserves [Note 5, 6]	Council Tax collection fund surplus and Other items [Note 7
2017-18	93,104	50,457	54.1	15,162		27,641	42,803	45.9	-630	473
2018-19	94,226	48,076	50.3	17,973		29,563	47,536	49.7	-1,878	513
2019-20	98,178	48,393	49.9	17,216		31,452	48,669	50.1	766	350
2020-21	109,639	65,720	56.8	16,865		33,141	50,006	43.2	-6,189	143
2021-22	111,177	63,049	54.8	17,663	5,877	34,434	52,098	45.2	-3,094	-923

Notes:

1. All figures in this release are the best estimates possible having received returns for 2021-22 from 99% of eligible local authorities in England.
2. Includes non-specific grants like COVID grants (excluding business rate relief grants), Revenue Support Grant and Police Grant as well as all the various ‘Specific grants inside aggregate external finance’.
3. As a percentage of total expenditure excluding use of reserves and Council Tax Collection Fund surplus and other items.
4. As reported. A minority of authorities under-reported in this sub-category but this should not have affected the aggregates.
5. Use of Reserves includes all appropriations to (-) and from (+) Revenue Account Reserves.
6. Movements to and from reserves have been adjusted for timing effects to make them as comparable as possible over time.
7. A number of authorities reported charges in 2021-22 in respect of collection fund deficits.

Reserves

Reserves are funds set aside to finance future expenditure, often for liabilities, expected pressures or other contingencies.

Table 5 shows the level of authority revenue reserves from 2017-18 to 2021-22. The Housing Revenue Account (HRA) also has reserves figures although these are not included in this table because these are separate from the General Fund Revenue Account (GFRA).

As noted in ‘Revenue Expenditure Financing’, reserves figures in the summary tables in this publication are presented adjusted for timing effects of grants relating to COVID, particularly additional business rates relief grants. This is so that the figures are as comparable as possible to other periods. There have nevertheless been larger than usual discrepancies in 2020-21 and 2021-22, for example between reported reserves levels at the end of one financial year and the start of the next.

Notwithstanding these data quality considerations, it is clear that local authority reserves have increased during the period of the COVID-19 pandemic. Revenue Account non-ringfenced reserves are estimated to total £34.0 billion at 31 March 2022, compared to £23.5 billion at 31 March 2020.

The ’other earmarked’ reserves figures (for 1 April 2021 and 31 March 2022) changed significantly following an extensive exercise during winter 2022-23 challenging local authorities that had provided figures that appeared to be inconsistent. These figures have changed very little since the March 2023, to the extent that the figures are presented here (shown as £ billion and rounded to one decimal place) are unchanged. The change since the December 2022 release (to England totals) are shown in this table:

	At 1 April 2021 December 2022 release	At 1 April 2021 This release unchanged from March 2023)	At 31 March 2022 December 2022 release	At 31 March 2022 This release unchanged from March 2023)
Adjusted other earmarked reserves (£bn)	26.7	25.9	29.4	28.5
Total non-ringfenced reserves (=adjusted other earmarked + unallocated rerves) (£bn)	32.0	31.1	34.9	34.0

Table 5: Level of revenue reserves, England, since 2017-18

£ million - not adjusted for inflation

Outturn	Schools reserves	Dedicated Schools Grant (DSG) reserves [Note 3]	Public Health reserves	Adjusted Other earmarked reserves [Note 1, 2] Non-ringfenced	Unallocated reserves Non-ringfenced	Adjusted Non-ringfenced reserves Total [Note 1, 2]	Adjusted Total (excluding DSG) reserves [Note 1, 2, 3]
At 1 April: 2017	1,835	…	243	16,934	4,182	21,116	23,195
2018	1,596	132	235	17,711	4,261	21,972	23,803
2019	1,582	6	231	19,427	4,220	23,624	25,459
2020	1,521	-364	216	20,125	4,674	24,800	26,537
2021	2,133	-61	387	25,948	5,194	31,142	33,662
At 31 March: 2018	1,659	…	239	17,641	4,286	21,927	23,825
2019	1,612	-8	236	19,709	4,264	23,973	25,821
2020	1,429	-397	212	18,774	4,681	23,455	25,096
2021	2,136	-267	381	24,555	5,479	30,034	32,551
2022	2,283	-50	533	28,475	5,454	33,929	36,745
Changes in 2021-22
Movements to (+) and from (-) reserves	150	10	147	2,527	260	2,786	3,083
as a percentage of 1 April 2021	7.0%	-17.1%	37.9%	9.7%	5.0%	8.9%	9.2%
England reserves excluding Greater London Authority
Movements to (+) and from (-) reserves	150	10	147	2,386	254	2,641	2,937
as a percentage of 1 April 2021	7.0%	-17.1%	37.9%	10.0%	5.5%	9.3%	9.5%

Notes:

1. Movements to and from reserves and reserves levels have been adjusted for timing effects to make them as comparable as possible over time.
2. All figures in this release are the best estimates possible having received returns for 2021-22 from 99% of eligible local authorities in England.
3. Dedicated Schools Grant was introduced in this return in 2018-19. It had previously been collected and continues to be collected in the Department for Education’s Section 251 returns. Interpretation of this since 2020 needs to be considered alongside the line 797 ‘Appropriations to(+)/from(-) dedicated schools grant adjustment account’. Consequently, to enable comparability over time, Adjusted Total Reserves excludes the category of Dedicated Schools Grant reserves.

Accompanying tables

Tables

Accompanying dropdown tables presenting detailed revenue expenditure and financing figures for 2021-22 for all returns from local authorities received by early November 2023 are available to download alongside this release.

These tables present all revenue information, by local authority, in a similar format as returned to the Department for Levelling Up, Housing and Communities. This data forms the basis of the tables in this release.

Description	Form
Revenue Outturn Summary	RS
Service Expenditure Summary	RSX
Specific and Special Revenue Grants	RG
Education Services	RO1
Highways and Transport Services	RO2
Social Care and Public Health	RO3
Housing Services	RO4
Cultural, Environmental, Regulatory and Planning Services	RO5
Protective, Central and Other Services	RO6
Trading Services Revenue Account	TSR
Subjective Analysis Return	SAR

Symbols used

…     =   not available
0      =   zero or negligible
-        =   not relevant
||       =   a discontinuity
(R)  =   Revised since the last statistical release
M     =   RO return not received in time for publication, therefore imputed figures used

Rounding

Where figures have been rounded, there may be a slight discrepancy between the total and the sum of constituent parts.

Technical Notes

Please see the accompanying technical notes document for further details.

Information on Official Statistics is available via the UK Statistics Authority website.

Information about statistics at DLUHC is available via the Department’s website .