Form

General fund revenue account outturn: general guidance notes

Updated 18 May 2023

Applies to England

This guidance should be read in conjunction with the specific guidance notes for completion of individual RO forms, and with CIPFA’s Service Reporting Code of Practice (SeRCOP) 2022-23.

1. Completion of the forms

Local authorities are required by the Secretary of State, under section 168 of the Local Government Act 1972, to complete and return these forms by the date specified. Where services have been contracted out, it is the authority’s responsibility to ensure that it is provided with sufficient information to enable it to complete these forms.

1.1 a. The deadline for return of the RO suite of forms is Friday 28 July 2023. While the deadline for preparation of draft accounts has reverted to the end of May (from start of August), the RO deadline is now midway between i) the late August deadline for 2020-21 and 2021-22 and ii) the late June deadline previously.

b. The 28 July deadline is for provisional data, and you should resubmit your return updated data becomes available.

c. Formal certification of Revenue Outturn and Capital Outturn forms is a new requirement that starts this year. The deadline for submitting a certified Revenue Outturn return is Friday 13 October 2023. Certification is carried out by completing the section at the foot of the first worksheet of the form (worksheet called ‘contact details’).

1.2 The RO suite of forms is linked together within one Excel workbook. Each lower level form automatically feeds the summary forms RS and RSX. Some data is linked to feed the SAR form, thus saving time over their completion and ensuring data consistency. All calculations throughout the spreadsheets are automatic and all blue calculated cells have been protected.

1.3 When first completing the electronic forms, please ensure that you select the correct authority name from the drop down list on the form’s title sheet. Your authority name and “E” code will then automatically appear on all the forms. The title sheet will display which RO forms your authority is required to complete – you should check that all forms appropriate to the services provided by your authority are listed and available within the spreadsheet.

1.4 All entries on the spreadsheets (in black) should be rounded to the nearest £ thousand upon input. Where pasting in data from other software, which may include decimals, please check resulting totals and adjust individual entries to achieve expected rounded results.

1.5 The spreadsheet has been specifically arranged to enable its data to be transferred automatically into our own customised database, using a specialised software package. To avoid corrupting the spreadsheet, you must not alter it by inserting or deleting any rows or columns. Please be especially careful to avoid using drag and drop or “cut and paste” in Excel which will corrupt the formulae producing calculated cells – please use the “delete” key to clear any erroneous entries. It is essential that you save your completed spreadsheet in its original Excel format (i.e. with .xls file extension). Any alteration to the format of the spreadsheet, or sending in your own version, will mean that the data cannot be uploaded to our database and will render the form invalid.

1.6 Interactive validation checks, including cross checks against previous data, are incorporated into the spreadsheets which, providing they remain uncorrupted, will automatically calculate and display warning messages where appropriate. Such warning messages should be checked carefully. If you are unable to change the data to clear a warning, please enter reasons on the separate Memo page. This should reduce the need for the Department for Levelling Up, Housing and Communities to contact you.

1.7 To avoid any delay in submitting returns, where figures are not available in time to meet the deadline, you should enter your best estimates of the outturn, and note the degree of estimation on the separate Memo page in the form. A new form with final figures may be submitted at a later date. In particular, local authorities with responsibility for education should provide their best estimates of education expenditure by the deadline, and provide revised estimates if necessary after the completion of their DfE section 251 returns. Please use the Memo page for all general notes, rather than write these in a covering e-mail or letter. Likewise, local authorities with responsibility for social care should provide their best estimates of adult social care by the deadline, and provide revised estimates if necessary after the completion of their ASC-FR returns to NHS Digital.

1.8 It is most important that your completed Excel forms are returned by the date specified above (at the very latest) by e-mail to lgf1.revenue@levellingup.gov.uk. This e-mail address should also be used for any enquiries over completion of the forms.

2. Coverage and definitions

2.0 Consistency with CIPFA Code of Practice on Local Authority Accounting

Where the guidance makes reference to definitions being the same as those used by International Financial Reporting Standards as interpreted by the CIPFA Code of Practice on Local Authority Accounting, this should be taken to mean that the values reported in this form should be consistent with the recognition and measurement principles of proper accounting practices. However, the reporting requirements of this form do vary from the presentation and disclosure requirements for the statement of accounts. Therefore, there is no expectation that values reported in the RO form are necessarily to be found as separately disclosed lines in the statutory accounts.

2.1 Period covered

The data recorded should be on an accruals basis: thus it should relate only to expenditure and income incurred, or expected to be incurred, in the financial year specified on the form; data relating to a programme of work over a number of years should only be recorded for that portion covered by the period of the form; appropriations to or from reserves during the period should be recorded beneath Net Revenue Expenditure on form RS.

Grant should be included on the same basis as they are recognised in the authority’s Comprehensive Income and Expenditure Account.

The RO forms are in line with the SeRCOP guidance issued to local authorities in the same financial year. Therefore the objective and subjective analysis for the RO 2022-23 are based on guidance as per SeRCOP 2022-23.

2.2 General Fund Revenue Account (GFRA)

These returns relate only to the GFRA, and transactions between it and:

• other accounts (including the HRA) and funds of the authority
• other local authorities
• the outside world Other accounts and funds should generally be excluded – see below.

Contracted out services (outside the LA sector) and payments to Public Corporations should be recorded under running expenses on the appropriate service lines of individual RO forms.

The GFRA may include receipts from small asset disposals not regarded as capital receipts.

Police and Crime Commissioner and Chief Constable: The RO forms should be based on the Police and Crime Commissioner’s group accounts including the Chief Constable’s transactions

2.3 Acting as principle or agent

Where a local authority passes on funding acting as agent, then grant income and the corresponding expenditure should be out of scope of this return, but with the exception of:

• all grants which are specifically for passing on to social care providers; record these payments to providers in eg RO3 line 8 ‘disbursements payments to care providers’ or line 9 ‘other payments to care providers’. This is so that the figure for spend on social care does not miss this funding.

In keeping with CIPFA guidance, an authority is acting as an agent where it does not exercise any decision making on either the eligibility conditions nor on the amounts payable.

2.4 Public Health

There are some conditions attached to how the public health grant can be used and expenditure from the grant must comply with these conditions.

All planned expenditure should be recorded under the appropriate service line. Information on prescribed functions is mandatory. If part of the grant is to be combined (‘pooled’) with funding from other sources, the total public health expenditure (from the grant and any other sources) should be recorded under the appropriate service line (RO3 lines 61-85). There are restrictions on the type of Capital the grant can be used for i.e. it can only be used on capital spend that does not involve borrowing or a finance lease. Capital expenditure should be noted as a separate (public health) Capital Expenditure from Revenue Account (CERA) expense (RS line 766).

There is no fixed limit on how much can be carried over to the next financial year, however, where there are large repeated underspends the Department of Health may decide to reduce allocations in future years. Any part of the grant left at the end of the financial year will need to be kept in a separate, public health reserve (RS line 914). Use of the reserve remains subject to the Conditions on the use of the grant.

2.5 Adult Social Care

Work jointly financed with health authorities / clinical commissioning groups (such as the Better Care Fund) should be recorded, using the full cost of the works, as expenditure in the first three columns of the appropriate service lines of RO3 form, and contributions from these bodies recorded as “other income” thereby being net off in the Net Current Expenditure column.

2.6 Housing Revenue Account (HRA)

All transactions between the HRA and the GFRA should be recorded beneath Total Service Expenditure on form RS. Payments made to the HRA of another authority should be recorded under running expenses on the appropriate housing service lines within RO4 form.

2.7 Business Improvement District (BID) Revenue Account

Contributions and levies paid from the GFRA to the BID Revenue Account should be recorded on appropriate service lines of the RO suite of forms, net of any income paid from the BID Revenue Account to the GFRA. The net cost of BID ballots should be included on RO6 line 428.

2.8 Collection Fund

Transactions within the Collection Fund should be excluded. Amounts in respect of Collection Fund surpluses/deficits for the past financial year, to be transferred to/from the Collection Fund in the current financial year in relation to council tax, should be recorded on RS line 880. See that the calculation of retained income from the business rates retention scheme (RS line 870) is the amount used to finance revenue expenditure and as such that includes any related collection fund surplus/deficit. Include the allowance from the Collection Fund against non-domestic rates collection costs on RO6 line 426.

2.9 Pensions Fund

Transactions within the Pensions Fund should be excluded; but transactions between the Pensions Fund and the GFRA should be included on all appropriate lines. See also paragraph 2.13.

2.10 Trading Accounts

Trading accounts are maintained where services are provided on a basis other than a straightforward recharge of costs or on a cash limited vote basis, such as a quoted price or schedule of rates (see SeRCOP paragraphs 2.28 and 2.29). Trading accounts should be recorded on form TSR. Refer to SeRCOP Section 2, paragraphs 2.28 to 2.37 and TSR guidance notes for full information on what to include. The overall trading account surpluses or deficits are transferred automatically from form TSR to form RS.

Sales from trading organisations to their parent local authority should be recorded by that authority as running expenses on appropriate RO service lines, and as income on form TSR.

Payments for trading services (including services undertaken by other authorities or jointly) and funding of the authority’s own trading services, should be recorded as running expenses on appropriate RO service lines. Any payments received into the authority’s own trading account (or a joint undertaking for which it is the account holder) should be recorded as other income on form TSR.

2.11 Capital Account

Transactions within the Capital Account should be excluded. Where capital expenditure is financed from revenue reserves, or directly from the GFRA, this should be recorded on form RS line 765 as Capital Expenditure charged to the General Fund Revenue Account (CERA) excluding Public Health which should be recorded separately on RS (line 766) and, in the case of capital expenditure financed from revenue reserves, a corresponding negative appropriation from reserves entered on form RS.

Other transactions between the Capital Account and the GFRA should be recorded on appropriate lines of form RS. Expenditure on capital projects that prove abortive should be charged to the appropriate service line in the RO forms.

2.12 Capital items

Capital items comprise:

1) Capital charges:

a) Depreciation
b) Loss on impairment of: i) assets, loans ii) to subsidiaries, and iii) to other parties
c) Gain/loss on fair value movements on: i) investment properties, ii) equity in subsidiaries, associates and joint ventures, and iii) other investment assets and iv) financial derivatives
d) Revaluations taken to surplus or deficit on the provision of services. Include changes in value of investment property recognised in the Surplus / Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement.

2) Credit for capital grants to be charged to the Surplus / Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement.

3) Revenue Expenditure funded from Capital by Statute (RECS): For National Accounts purposes it is a requirement that Net Current Expenditure for each service line does not include RECS as most of these items are treated as capital expenditure. Total RECS recorded on line 936 relating to RECS on the RS and TSR form in the Capital Items section will continue to be entered in the Capital Estimates and Capital Outturn Return (please see relevant guidance for the capital forms for further information).

Definitions for these categories can be found in the specific guidance notes.

As per the Department’s letter of 15 January 2015 regarding “Reducing Data Burdens on Local Authorities”, the capital items on all appropriate service lines under the “Capital items” and “Net total cost excluding specific grants” columns of forms RO1 to RO6, RS and RSX are not required, hence deleted from the forms. However, the overall total is still required broken down into the above elements in the Capital items section of the RS (lines 931 to 936).

For trading accounts, “Capital items” and “Net surplus or deficit” columns for all services have been deleted. However, only total capital items for External trading accounts and Internal trading accounts are required on the TSR lines 697 and 897 respectively. These totals should be broken down into the above elements in the Capital items section of the TSR (lines 931 to 936).

For trading accounts, capital items recorded on form TSR are included in the net surplus or deficit figures automatically transferred to form RS; however, to preserve the integrity of the Council Tax Requirement, a corresponding credit to cancel out these capital items, is also automatically transferred to form RS (lines 741 and 742).

2.13 Objective (service) analysis

The RO suite of forms have been designed to record the full range of local authority services, broken down in accordance with the hierarchical structure of SeRCOP Section 3: Service Expenditure Analysis for England and Wales (SEA).

Advice on what to include in each of the RO service lines is given in each form’s guidance notes which clearly show the related SeRCOP service divisions and sub-divisions (in bold). Greater detail may be found under the equivalent headings in the SeRCOP SEA, but the exceptions quoted in RO guidance notes must take precedence in completing these forms, i.e.: a) certain services listed in the SeRCOP SEA are excluded from Total Service Expenditure, and instead recorded below this line on form RS.

b) Most notably, specific and special revenue grants paid into the GFRA should be recorded only on form RG.

c) Where the authority’s service analysis is not sufficiently detailed to provide an accurate breakdown between certain lines of a form, an estimated breakdown must be given; entries on lines cannot be coupled together.

d) Where expenditure is charged out through a multi-service holding account (eg: for a central works depot), only the recharges should be recorded under running expenses on the service line bearing the cost. All residual sums on holding accounts should be recharged to and recorded under running expenses on all relevant RO services lines.

e) Management and support services must either be allocated directly or apportioned and recharged to individual RO service lines in accordance with SeRCOP Section 2: The Definition of Total Cost. The gross cost of management and support services should also be recorded and its allocation/apportionment shown (so that a virtual NIL balance is achieved) on form RO6.

2.14 Subjective analysis

Column headings throughout forms RO1 to RO6 and TSR are intended to be consistent with SeRCOP Section 4, Recommended Standard Subjective Analysis. Section 3 of this guidance shows the relationship between RO column headings and the SeRCOP subjective analysis groups. A more detailed subjective analysis is collected from a sample of authorities who complete the Subjective Analysis Return (SAR) – such authorities should refer to the SAR guidance notes.

2.15 IAS 19: Employee benefits

Since 2010-11, the Accounting Code and SeRCOP require International Accounting Standard 19 (IAS19) to be applied in local authority accounts and budgets. This approach recognises costs in the financial year that the authority took on responsibility for them, especially where benefits are unfunded. Hence the cost of a decision is accounted for in the year it is taken. Costs are recognised in the year in which they are incurred, with payment of benefits and contributions to pension funds treated as a cash flow item as they are made. The pensions reserve ensures this treatment does not impact on the Council Tax Requirement, and only benefits and contributions actually payable for the year have to be financed.

Information on the RO forms should be reported on a non-IAS19 and PFI ‘off-balance’ sheet basis. Thus the benefits and contributions actually payable for the year should be entered in the service lines.

Following IAS19 the Accounting Code requires liabilities for short term accumulating compensated absences (e.g. untaken annual leave entitlement) to be recognised in the accounts. Regulations have been made to prevent such liabilities impacting on the Council Tax Requirement. In RO suite of forms figures should follow the IAS19 treatment for short term accumulating compensated absences, and the reversal should be included in RS line 747 “Appropriations to / from Accumulated Absences Account”.

2.16 Value added tax (VAT)

Include any irrecoverable input VAT with respect to revenue services. Irrecoverable VAT which is directly attributable to the supply of VAT-exempt revenue services should be recorded on relevant service lines. Any other irrecoverable input VAT with respect to revenue services should be recorded as an adjustment to Net Current Expenditure on form RS.

2.17 PFI schemes in accordance with the International Financial Reporting Standards (IFRS)

Under the International Financial Reporting Standards (IFRS) PFI schemes are brought ‘on balance sheet’. Local authorities have been required to account for their PFI schemes on the IFRS basis as from 2009-10.

For National Accounts purposes, however, PFI schemes should be accounted for ‘on balance sheet’ basis only where economic ownership of the asset rests with the Authority.

Economic ownership for national accounts purposes is determined by the same test as applies under UK accounting standards and hence that local authorities applied in preparing their 2008-09 accounts. The basis of that test was set out in Appendix E to the 2008 SORP, and depends on whether the local authority or the contractor has an asset of the property used to provide the contracted services. A party has an asset of the property where that party has access to the benefits of the property and exposure to the risks inherent in those benefits.

When completing the RO suite, therefore, local authorities should continue to record PFI schemes on an ‘off balance sheet’ basis unless they have such economic ownership.

3. Reconciliation between Revenue Outturn Forms and the Service Reporting Code of Practice (SeRCOP)

Expenditure

RO/RS description	SeRCOP description	SeRCOP group
Employees	Direct and Indirect employee expenses (Exclude Agency staff costs: SeRCOP 2022-23 states that Agency staff costs should be included in employee costs (group 1), although on the RO 2022-23 forms this should only be included in Running Expenses (group 2))	(1)
Employees	Contributions to employee-related provisions	(1)
Running expenses (including joint arrangements)	Premises-related expenditure (Exclude: CRC Allowances)	(2)
Running expenses (including joint arrangements)	Transport-related expenditure	(3)
Running expenses (including joint arrangements)	Supplies and services	(4)
Running expenses (including joint arrangements)	Third party payments (Include Agency staff)	(5)
Running expenses (including joint arrangements)	Transfer payments*	(6)
Running expenses (including joint arrangements)	Support services	(7)
Total expenditure	[Employees] + [Running expenses]

*(HRA transfers, mandatory rent allowances, rebates and student awards are recorded only on form RS, below Total Service Expenditure, but should be included here when calculating Gross Total Cost per SeRCOP).

Income

RO/RS description	SeRCOP description	SeRCOP group
Sales, fees and charges	Customer and client receipts (includes fines and rents, but not council housing rents)	(9)
Other income (including joint arrangements)	Other reimbursements and contributions* (Specific/special grants should be recorded in form RG, and non-specific grants are recorded in RS)	(9)
Other income (including joint arrangements)	Recharges (to internal users) (excludes interest receipts which are recorded on form RS)	(9)
Total income	[Sales, fees and charges] + [Other income]

* Revenue income received to finance a function/project jointly or severally undertaken with other bodies. Contributions from other local authorities. Value of costs recharged to outside bodies including other committees.

Government grants are shown separately in this and related returns (budget, and equivalent basis for quarterly return). Thus grants are not net off against expenditure; the exception is where grant is passed on as a payment from another local authority. In such cases, the recipient authority must record the amount spent also in the ‘other income’ column, thereby the amount is net off in the Net Current Expenditure column.

Section 4, Group 9 Income now includes two new elements:

(a) Business Rates Supplements (BRS)
(b) Community Infrastructure Levy (CIL)

For these returns for compliance with National Accounts, these should not be reported on the individual service lines where relevant. The total income from BRS and CIL across all services should only be reported on RS lines 793 and 794 respectively. CIL income should not be netted off the individual service lines.

Refer to SeRCOP Section 4, “Recommended Standard Subjective Analysis” for the full composition of each SeRCOP group.

Agency staff costs memorandum item

Starting from outturn 2022-23, local authorities are required to report for each broad service category their estimated total expenditure relating to agency staff managed directly by the local authority. These costs continue to need to also be reported within the ‘running expenses’ column.

4. Transactions between local authorities, central government and other bodies

4.1 Transactions with central government

Work carried out on behalf of, and reimbursed by a government department should not be recorded on individual RO forms, but any surplus/deficit resulting from such transactions should be included within Adjustments to Net Current Expenditure on form RS.

Such work includes:

• works on motorways and trunk roads
• supply of teaching staff and related services in penal establishments
• reception centres
• youth employment

See also Acting as principle or agent

4.2 Transactions with single purpose authorities

4.2.1 Health Authorities and Trusts; Fishery Boards

Work carried out on behalf of, and reimbursed by health authorities / clinical commissioning groups should not be recorded on individual RO forms, but any surplus/deficit resulting from such transactions should be included within Adjustments to Net Current Expenditure on form RS, line 748

Work jointly financed with health authorities / clinical commission groups (such as the Better Care Fund) or Fishery Boards should be recorded, using the full cost of the works, as expenditure within the first three columns on the appropriate service lines of relevant RO forms. (and contributions from these bodies recorded as “other income”, thereby being netted off in the Net Current Expenditure column)

4.2.2 Integrated Transport Authorities (ITAs); Waste Disposal Authorities (WDAs)

Authorities making levy payments to the above single purpose authorities should record these on the appropriate RS levy lines only; whereas the single purpose authorities should record income from such levies on appropriate RS levy lines, and should also fully record their expenditure (and any non-levy income) on all appropriate service lines of individual RO forms.

4.3 Joint and other arrangements between local authorities

4.3.1 Joint arrangements

Where formal joint arrangements exist between authorities, the account holder should break down the expenditure and income under appropriate subjective headings, and against appropriate RO service lines; the contributions received by the account holder from the other authorities should be recorded in column 5 (Other Income, including Joint Arrangements). The other authorities should record only their contributions to the account holder in column 2 (Running Expenses, including Joint Arrangements).

Where informal joint arrangements exist, all authorities should record their expenditure and income under appropriate subjective headings, against appropriate RO service lines; any transactions between the authorities should be recorded by each authority in the appropriate Joint Arrangements column (2 or 5).

Authorities involved with joint arrangements should confirm with their partners that all concerned are adhering to this guidance, to avoid possible double counting or omission of data.

The above guidance is also true for treatment of expenditure and income for Shared Partnerships and Local Authority Trading Companies.

4.3.2 Agency arrangements

Where one local authority carries out work as an agent of another (including district councils operating functions delegated by their county council):

a) the local authority actually carrying out the work should

(i) record gross expenditure and gross income over all appropriate service lines
(ii) also include the reimbursement received in column 5 (other income including joint arrangements) over all appropriate service lines

b) the authority requiring the work should record its payment to the agent authority in column 2 (running expenses incl. joint arrangements) over all appropriate service lines.

4.3.3 Contributions

Contributions made to or received from another local authority or local body, should be included by both contributing and receiving authorities, and recorded on relevant RO service lines, under either running expenses (column 2) or other income (column 5), as appropriate.

4.3.4 Accountable bodies for partnerships

Authorities involved in partnership schemes, should count money transferred to or from other partners within the partnership as expenditure or income, and therefore record it on appropriate RO service lines:

a) if the partner is not a local authority – under running expenses (column 2); or

b) where the partner is a local authority, then the Accountable Body authority should not record any of the expenditure/income relating to that partner: instead, the authority receiving the payment should record it, as well as the expenditure involved, on their RO forms

This arrangement is designed to avoid double counting, and authorities should check to ensure that their partners are adhering to this guidance.

4.3.5 Local Area Agreements

For those authorities that are the Accountable Body (i.e. Unitary Authorities, County Councils, London Boroughs and Metropolitan Districts) only the grant retained by that authority or passed on to a body that is not a local authority for which the RA 2021-22 forms are being completed (e.g. NHS, third sector bodies, and parish and town councils) should be recorded on the main portion of the form.

This expenditure should be recorded at the relevant service line(s) of the RA form, while the grant income excluding the element passed on to local authority partners (e.g. to District Councils, Police Authorities, Fire & Rescue Authorities, Waste Authorities, Passenger Transport Authorities and National Parks Authorities) should be recorded under Specific and Special Grants, ‘Other Grants Inside AEF’.