Policy

Giving local authorities more control over how they spend public money in their area

Supporting detail:

Investment in local government capital assets

Councils need to invest in their buildings and equipment so that people can continue to receive high-quality local services. We will ensure that the system gives councils the resources and flexibilities to make this investment.

Local authorities receive central government funding for a major part of their capital investment in the form of capital grants. They can also use income from their own capital assets to finance capital spending.

The new Prudential system encourages local authorities to invest in the capital assets that they need to improve their services. It allows them to raise finance for capital expenditure without government consent as long as they can afford to service the debt out of their revenue resources.

Local authorities must have regard to the ‘Prudential code for capital finance in local authorities’ when setting and reviewing their affordable borrowing limit.

Two guidance documents on capital finance are also available to download below.

Capital finance: guidance on minimum revenue provision (third edition)

This file may not be suitable for users of assistive technology. Request a different format.

If you use assistive technology and need a version of this document in a more accessible format please email alternativeformats@communities.gsi.gov.uk quoting your address, telephone number along with the title of the publication ("Capital finance: guidance on minimum revenue provision (third edition)").

Capital finance: guidance on local government investments (second edition)

This file may not be suitable for users of assistive technology. Request a different format.

If you use assistive technology and need a version of this document in a more accessible format please email alternativeformats@communities.gsi.gov.uk quoting your address, telephone number along with the title of the publication ("Capital finance: guidance on local government investments (second edition)").

Help us improve GOV.UK

Please don't include any personal or financial information, for example your National Insurance or credit card numbers.