Policy paper

Local government finance statistics: update on review recommendations

Published 15 May 2023

Applies to England

Introduction

Local government finance (LGF) statistics are produced by the Department for Levelling Up, Housing and Communities (DLUHC) using data supplied by all local authorities in England. The statistics are published throughout the year in statistical releases and live tables on the Department’s website.

In April 2022, DLUHC published the findings of the Review of local government finance statistics. The aim of this review was to identify:

1. Which data needs are currently being met and which are not
2. The highest priority changes to consider taking forward
3. The additional or reduced burden on both authorities and DLUHC of making changes

Several key recommendations were made as a result of this review. These broadly fell into 6 categories:

1. Improving the presentation and accessibility of statistics
2. Filling data gaps
3. Exploring data frequency and data timeliness
4. Exploring alternative methods of data collection
5. Exploring the feasibility of using administrative data sources to supplement survey collection
6. Enhancing local authority engagement

As set out in the original review, we intend to make changes over a 3-year period, beginning in 2023. One year on, this update sets out progress made against each of these recommendations and the next steps to meet them. A list of upcoming milestones can be found in Annex A.

1. Improving the presentation and accessibility of statistics

LGF data tables should be published in a machine-readable format, with a time series

Across revenue, capital and local tax statistics, work has been ongoing to prepare data for publication in a machine-readable format. Within the last few months, we have been consulting users to understand what format of machine-readable data would be most appropriate for their uses. We will begin publishing this data later this year, starting with a limited release across capital, revenue and local tax statistics.

Following this, we will be working to extend the number of historical years as far back as we are able to and to extend to a wider range of datasets. We have focussed a lot of effort this year into publishing our releases and tables in an accessible format to support the needs of all users.

A graphic or table to show links between LGF data tables should be published

We have been working on this internally over the past 12 months. Further development is needed to ensure that this is informative for users whilst remaining simple enough to be easily understood. This will focus especially on the links between different collection series (revenue, local tax and capital). These links and overlaps are complex and require consideration of how they can be clearly presented to a non-technical audience. We aim to publish this towards the end of 2023.

Data visualisations should be published alongside LGF data tables to aid user understanding of the data

Over the past year, we have begun to implement this change across collections. We have begun to include maps within some publications to assist users in understanding the figures presented to them.

We are also considering how we can create more interactive visualisation dashboards. This work will become a higher priority once the machine-readable data strand is complete.

Metadata published alongside LGF statistics should include information on local authority restructures and changes to local authority responsibilities to enable users to manipulate data to meet their needs

As part of our work on creating machine-readable timeseries data, we are creating a metadata file which will sit alongside this. This will help users understand the changes to local authorities and will also cover the changes to the data variables over this time, for example showing where data items were merged. We hope this will enable users to better manipulate data for their purposes.

2. Filling data gaps

This recommendation includes publishing more granular breakdowns within existing data tables, as well as publishing information on areas not currently covered by the statistics which included a list of proposed changes for both the capital and revenue data collections. This formed the basis of 2 consultations with local authorities to further our understanding of the feasibility of the proposed changes for local authority data providers.

Consultation

Two consultations were sent out to local authorities over the summer in 2022. The first related to the capital data collections, and the second related to revenue data collections (including social care). Local authority contacts were invited to comment on a total of 22 proposed changes; and in addition to provide comment on the proposed certification of capital outturn and revenue outturn returns. The full list of proposals included in the consultations can be found in Annex B.

There was a good response to both consultations with over 170 comments on the capital consultation and over 120 comments on the revenue and social care consultation. DLUHC would like to thank all local authority contacts who took the time to respond.

Implementation

All responses to the consultations were considered. The views expressed were used to group proposals into those that could be implemented in 2023; those that would require further work before they could be implemented and were therefore to be implemented in 2024; and those which would require the most work and further resource before they were suitable. It is still to be decided if the final group will be implemented in 2024 or will need to wait until 2025.

The categorisation of these proposals can be found in Annex B. These timelines are consistent with those originally set out in the Review of Local Government Finance Statistics.

Proposals for 2023 have now been signed off by relevant advisory groups, including the Gateway Group, who approve all proposed changes affecting data collected as part of the Single Data List. Changes to local authority returns have now begun.

Users will first see associated data changes in June 2023 when local authority revenue expenditure and financing budget 2023-24 is published. Further changes in 2023 are as follows:

• August: Capital Payments and Receipts live tables 2023-24 Q1 – updated forecast of capital finance requirement; and more granular housing expenditure data

• September: Quarterly Revenue Outturn (QRO) 2023-24 Q1 – addition of Housing Revenue Account items

• October: Provisional Revenue Outturn 2022-23 – addition of small number of additional data items and identifying spend on agency staff by broad service grouping

• November: Local authority capital expenditure, receipts and financing final outturn 2022-23 – a list of local authority trading companies, subsidiaries, associates and joint ventures; and memorandum items to show the grants local authorities have used to finance capital expenditure

Later this year we will finalise the list of proposals to be implemented from 2024. There may be a small number of more challenging proposals which require more extensive work and these may carry over into 2025.

3. Exploring data frequency and timeliness

The review recommended setting up a working group to discuss potential changes to in-year data collection as discussions on this challenging topic did not result in a clear set of proposals for change during the review.

The group first met in March 2022 and included 7 local authority representatives as well as being attended by DLUHC, the Office for National Statistics (ONS), HM Treasury (HMT) and the Local Government Association (LGA). As a result of the working group meetings held, it was established that it should be feasible to require a fourth quarter forecast at the time when QRO3 is provided. This would provide a much earlier update for the full financial year than has been available; the Office for National Statistics and the Treasury have always been concerned that they had to wait until after the summer for the first Revenue Outturn data set.

We expect that this change would meet this need, whilst keeping the additional burden on local authorities modest. The most appropriate, pragmatic approaches to providing QRO figures were also discussed (these are to be promoted in the guidance) and a linked proposal rebranding this data return as Quarterly Revenue Update (QRU). These proposals were taken forward and got a positive response from the consultation which took place in the summer of 2022.

4. Exploring alternative methods of data collection

As part of this recommendation, we have begun exploring the feasibility of automating data collection. DLUHC has begun work with ONS on an initial feasibility study. We hope that this study will provide further clarity on whether it is possible to get existing information directly from local authority systems, and for which collections this might be possible. We intend to conclude this initial stage in summer 2023 and will plan next steps based on the findings.

5. Exploring the feasibility of using administrative data sources to supplement survey collection

This recommendation was for ONS to work with DLUHC to consider what sources of data might be used to supplement existing collections. This has been picked up by ONS as part of their 3-year project looking at harnessing benefits of administrative data including research into Pay As You Earn (PAYE) real time information (RTI) and Value-added Tax (VAT). The scope of the project is much wider than local government finance data, but the findings will be relevant.

6. Enhancing local authority engagement

Host annual webinars on each of the collections for data providers to attend and raise any questions

The first were a pair of webinars held in March with revenue returns data contacts. These highlighted key points to note and the most common issues and misunderstandings relating to data provided in the revenue collections. Two further webinars were held in the summer of 2022. These focussed primarily on the consultation on changes to data collections, relating to the filling data gaps recommendation discussed above. One was held for Capital data collections and another for Revenue and Social Care. These were well attended and well received. We will continue to host further webinars and tailor their focus around any significant changes where appropriate.

Facilitate the set-up of a group for data providers in local authorities to discuss completing data collection forms

We are continuing to consider this recommendation and how we can implement it in a way that is helpful to data providers in local authorities, whilst considering the input required by DLUHC. We want to ensure that any solution under this recommendation is easily monitored by the DLUHC data team so that local authorities are getting accurate and timely information regarding data collections where they have queries.

Provide further information to local authorities on how data users from across central government use the data provided by local authorities

Following this recommendation, in December 2022, we published an update to the Uses of local authority spending and finance data returns. This document explains how the data received from the local authorities is used by DLUHC, HMT, the Office for Budget Responsibility (OBR) and ONS.

Annex A: LGF data workplan – upcoming milestones

Date	Milestone
August 2023	Capital Payments and Receipts data changes
Summer 2023	Local tax timeseries data publication
Summer 2023	Conclusion of feasibility study for automation of data collection
September 2023	Quarterly Revenue Outturn (QRO) data changes
Autumn 2023	Metadata alongside LGF statistics publication
Autumn 2023	Capital and revenue timeseries data publication
October 2023	Provisional Revenue Outturn 2022-23 data changes
November 2023	Local authority capital expenditure, receipts and financing final outturn 2022-23 data changes
Winter 2023	Publication of graphic or table to show links between LGF data tables
Spring 2024	Begin collecting further additional data from local authorities
Autumn 2024	Further data additions to capital and revenue publications

Annex B: Proposed changes

Table 1: Proposed changes to capital data collections and proposed implementation dates

Proposal	Category
1. Publish additional data tables to show the value of the stock of local authority assets.	2024
2. Publish a list of local authority trading companies, subsidiaries, associates and joint ventures.	2023
3. Publish memorandum items to show the grants local authorities have used to finance capital expenditure.	2023
4. Publish an updated forecast of capital finance requirement on a quarterly basis.	2023
5. Collect and publish more granular housing expenditure data to show HRA and non-HRA split.	2023
6. Publish additional balance sheet information.	2024/ requires further work
7. Survey a sample of local authorities to collect information on the capital grants paid to households and non-profit institutions serving households (NPISH).	2024
Certification of return	2023

Table 2: Proposed changes to revenue and social care data collections, and proposed implementation dates

Proposal	Category
1. Collect and publish data to show agency staff expenditure for each service area.	2023
2. Collect and publish data to show recharges for management and support services against each service sub-category.	2024
3. Collect and publish data to show income from other authorities for services provided on their behalf and income transferred from other bodies.	2024/ requires further work
4. Explicitly show housing expenditure split by HRA and non-HRA in the QRO.	2023
5. Sub-categories on residential care and fostering services on Children Looked After.	2023
6. Sub-categories on looked after and non-looked after asylum seeking children.	2023
7. Collect and publish information on Better Care Fund (BCF) income and other NHS income.	2024
8. Splitting Social Care and Public Health into separate components (Children’s Social Care, Adult Social Care, Public Health) in part A of the subjective analysis return (SAR-A).	2023
9. Splitting Social Care into separate components (Children’s Social Care, Adult Social Care) in part B of the subjective analysis return (SAR-B).	2023
10. Remove line on COVID-19 discharge costs in RO3 (Line 7).	2023
11. Remove line on Personal Protective Equipment in RO3 (Line 99).	2023
12. Remove “PPE Memorandum Items - optional” lines in RO6 (Lines 601 and 610).	2023
13. Update QRO guidance to clarify that the form should be completed using best available data.	2023
14. Include a Quarter 4 forecast for each of the service sub-categories in the QRO3.	2024
Certification of return	2023
Exploratory proposal: to test whether there was consensus for switching QRO categories to a longer list of components.	Not proceeding