National statistics

Local authority capital expenditure and receipts in England: 2021 to 2022 final outturn

Published 10 November 2022

Applies to England

1. In this release:

  • Capital expenditure by local authorities in England totalled £26 billion in 2021-22, up £560.4 million (2.2%) in real terms compared to 2020-21.

  • Total expenditure on fixed assets totalled £20.1 billion in 2021-22, up £0.8 billion (4.0%) in real terms compared to 2020-21. This was largely due to increased expenditure on new construction, conversion & renovation, up £1.6 billion (10.8%) compared to 2020-21. This was partly offset by a decrease of expenditure on acquisition of land & existing buildings, down £0.8 billion (28.1%) from 2020-21.

  • Total financial expenditure totalled £5.9 billion in 2021-22, down £210.9 million (3.5%) in real terms compared to 2020-21. Expenditure on grants saw a sizeable increase, up £1.8 billion (91.2%) compared to 2020-21. However, this was offset by decreased expenditure on loans and other financial assistance (down £1.7 billion) and on acquisition of share and loan capital (down £310.8 million).

  • Capital receipts totalled £3.5 billion in 2021-22, up £0.9 billion (32.7%) in real terms than in 2020-21.

  • Capital grants replaced prudential borrowing as the largest source of financing of capital expenditure in 2021-22 at £10.2 billion, up £0.9 billion (9.9%) in real terms compared to 2020-21. Prudential borrowing was £9 billion, down £1.6 billion (15%).

Release date: 10 November 2022
Date of next release: November 2023
Responsible Statistician: Imogen Ormston
Contact: CapitalData@levellingup.gov.uk
Media enquiries: NewsDesk@levellingup.gov.uk

2. Introduction

Capital expenditure comprises the buying, constructing or improving of physical assets, such as buildings, land, vehicles and other miscellaneous property, including streetlights and road signs. It also includes grants and advances that authorities make to other bodies for capital purposes. Because of the project-based nature of capital expenditure, there can be relatively larger variance in expenditure over time compared with revenue expenditure.

This release provides the final outturn for local authority capital expenditure and receipts in the financial year April 2021 to March 2022. These data are derived from Capital Outturn Returns (COR), collated by the Data, Analytics and Statistics Division of the Department for Levelling Up, Housing & Communities (DLUHC). COR forms capture local authority capital expenditure and receipts by economic category and service area, as well as a breakdown of how expenditure is financed, prudential system information, and accumulated capital receipts and major repairs reserve levels. COR service areas are consistent with the Service Reporting Code of Practice (SeRCOP).

A provisional outturn was published in a Statistical Release in June 2022. This was based on information from Capital Payments and Receipts Returns 4 (CPR4) submitted by local authorities in England.

3. COVID-19

The data in this release covers the 2021-22 financial year, which followed a year of significant impact on local authority finances resulting from the COVID-19 pandemic. Some local authorities have continued to experience slippage in expenditure due to COVID-19.

4. Capital expenditure and receipts by economic category

Local authorities report capital expenditure, incurred by buying, building or improving capital assets, and capital receipts, received from the sale of a capital asset.

Total capital expenditure is divided into total expenditure on fixed assets, which includes spending on tangible and intangible fixed assets, and total financial expenditure, which includes grants, loans, and acquisitions of share or loan capital for capital purposes.

As shown in Table 1 and Figure 1, capital expenditure by local authorities in England totalled £26 billion in 2021-22, up £560.4 million (2.2%) in real terms from 2020-21. This follows two years of declining expenditure.

This was largely due to increased expenditure on new construction, conversion & renovation, up £1.6 billion (10.8%) compared to 2020-21. Expenditure on new construction, conversion & renovation was £16.3 billion in 2021-22 and remains the biggest capital expenditure for local authorities, accounting for 62.6% of all capital expenditure in 2021-22.

The most notable other changes were:

  • Capital receipts totalled £3.5 billion in 2021-22, up £868.3 million (32.7%) in real terms than in 2020-21.

  • Expenditure on acquisition of land & existing buildings totalled £2 billion in 2021-22, down £792 million (28.1%) in real terms compared to 2020-21. This is the third consecutive year this has fallen and expenditure is now less than half of what it was when it peaked in 2018-19.


Table 1: Local authority capital expenditure & other transactions and capital receipts by category: forecast and final outturn, England, 2017-18 to 2021-22

Real terms series, all monetary figures in 2021-22 prices

£ millions

Category Type 2017-18 2018-19 2019-20 2020-21 (e) 2021-22
Acquisition of land & existing
buildings
Forecast (adjusted) 2,295 5,363 5,652 5,029 3,997
  Outturn (final) 4,457 4,814 4,487 2,819 2,027
New construction, conversion
& renovation
Forecast (adjusted) 17,918 14,575 15,073 16,473 17,980
  Outturn (final) 15,321 14,239 14,575 14,705 16,294
Vehicles, plant, furniture
& equipment
Forecast (adjusted) 1,673 1,521 1,356 1,592 1,644
  Outturn (final) 1,494 1,417 1,749 1,538 1,529
Intangible fixed assets Forecast (adjusted) 286 391 423 305 357
  Outturn (final) 288 319 289 286 270
Total expenditure on fixed
assets
Forecast (adjusted) 22,172 21,849 22,504 23,399 23,978
  Outturn (final) 21,560 20,789 21,100 19,349 20,120
             
Category Type 2017-18 2018-19 2019-20 2020-21 (e) 2021-22
Expenditure on grants Forecast (adjusted) 2,154 3,922 3,944 3,052 4,228
  Outturn (final) 3,458 2,279 2,721 1,920 3,673
Expenditure on loans and
other financial assistance
Forecast (adjusted) 1,780 2,805 2,596 3,342 2,266
  Outturn (final) 2,001 3,139 2,204 3,146 1,493
Acquisition of share and loan
capital
Forecast (adjusted) 229 616 569 433 251
  Outturn (final) 892 1,935 1,808 1,044 733
Total financial expenditure Forecast (adjusted) 4,163 7,344 7,110 6,827 6,746
  Outturn (final) 6,351 7,354 6,734 6,110 5,899
             
Category Type 2017-18 2018-19 2019-20 2020-21 (e) 2021-22
Total capital expenditure Forecast (adjusted) 26,335 29,192 29,614 30,225 30,724
  Outturn (final) 27,911 28,143 27,834 25,459 26,019
  of which GLA(d) Forecast (adjusted) 3,246 4,283 4,416 4,316 3,507
  Outturn (final) 3,227 4,436 3,998 3,421 3,394
Payment of LSVT levy Forecast (adjusted) 0 0 0 0 0
  Outturn (final) 0 0 0 0 0
Expenditure treated as capital
by virtue of a Section 16(2)(b)
Direction(b)
Forecast (adjusted) 44 64 74 63 174
  Outturn (final) 159 268 190 192 229
Total capital expenditure &
other transactions
Forecast (adjusted) 26,379 29,257 29,688 30,288 30,898
  Outturn (final) 28,070 28,411 28,024 25,651 26,248
             
Category Type 2017-18 2018-19 2019-20 2020-21 (e) 2021-22
Total capital receipts (c) Forecast (adjusted) 3,578 3,157 2,709 4,042 2,405
  Outturn (final) 3,649 4,323 2,990 2,658 3,526

Notes:

(a) Figures are from the ‘England grossed excluding double counting’ total, which should avoid double counting due to any flow of grants, loans or other financial assistance or receipts between local authorities and/or between functional bodies of Greater London Authority (GLA).

(b) Expenditure which does not fall within the definition of expenditure for capital purposes but is treated as capital expenditure by a direction under section 16(2)(b) of the Local Government Act 2003.

(c) The 2019-20 forecast of total capital receipts has been revised to correct a misreported value by Milton Keynes Council. All other years are unaffected.

(d) Forecasts are unadjusted at the GLA level.

(e) Outturn figures for 2020-21 have been revised since the previous publication, as these include a small number of late submissions or resubmissions of data by local authorities. Forecast figures have not been revised.

  • Sources: CER 2017-18 to 2021-22 and COR 2017-18 to 2021-22


Figure 1: Local authority capital expenditure in real terms by economic category, England, 2017-18 to 2021-22

Grouped bar chart showing a consistently large expenditure on ‘new construction, conversion and renovation’ compared to other main expenditure areas.


Figure 2 shows the difference between unadjusted forecasts, adjusted forecasts, and outturn data for total capital expenditure since 2017-18. Forecasts are adjusted as local authority forecasts are consistently higher than subsequent outturn. Differences between them can be caused by slippage in timings of projects, changes in service priorities or in financial capabilities of an authority throughout the year.

Caution should be taken when comparing outturn and forecast data over time in this release. This is especially true for 2020-21 since these forecasts were based on local authority estimates made prior to the impact of coronavirus (COVID-19) outbreak in early 2020.


Figure 2: Total capital expenditure in real terms: unadjusted forecast, adjusted forecast, and final outturn, England, 2017-18 to 2021-22

Line graph showing a consistent overestimation of capital expenditure by the unadjusted forecast and a more accurate estimate by the adjusted forecast. The adjusted forecast is still higher than outturn for the last four years.

Notes:

(a) Outturn figures for 2020-21 have been revised since the previous publication, as these include a small number of late submissions or resubmissions of data by local authorities. Forecast figures have not been revised.

5. Capital expenditure by service area

Local authorities report capital expenditure and receipts across 13 service areas, as shown in Table 2.

Figure 3 shows how capital expenditure across these service areas has changed since 2017-18.

Highways & Transport Services and Housing Services continued to attract the majority of local authority capital expenditure in 2021-22, accounting for £7.4 billion (28.4%) and £7.3 billion (28.0%) of all capital expenditure respectively. Over the last five years, in real terms, the proportion of total capital expenditure attributed to Housing Services has increased by 6%.

Expenditure on Highways & Transport Services was down £685 million (8.5%) in real terms compared to the previous year. Greater London Authority (GLA) continues to have the highest expenditure from a single authority (£2.1 billion) but this has decreased by £417.4 million (16.3%) in real terms compared to the previous year.

Expenditure on Housing Services remained the second-largest area of spend, up by £1.2 billion (19.8%) in real terms compared to the previous year. This was largely driven by increased expenditure by London boroughs and GLA, but increased expenditure was also seen by other authorities.

Expenditure on Trading Services totalled £1.6 billion in 2021-22, down £355.5 million (18.4%) in real terms from the previous year. This is the lowest level of expenditure on trading services over the past five years and is the third consecutive year of decline.


Table 2: Local authority total capital expenditure by service: final outturn, England, 2017-18 to 2021-22

Real terms series, all monetary figures in 2021-22 prices

£ millions

Service 2017-18 2018-19 2019-20 2020-21 (r) 2021-22
Education(b) 3153 2633 2,446 2,150 2,171
Highways & Transport 7306 8423 7,914 8,085 7,400
  of which GLA 1893 3353 2,865 2,562 2,144
Social Care 323 366 393 293 352
Public Health 11 22 22 24 26
Housing 6202 5853 6,409 6,076 7,278
  of which London Boroughs 2335 2091 2,430 2,380 2,864
  of which GLA 741 619 613 315 662
Culture & Related Services 1207 1201 1,315 1,164 1,291
Environmental & Regulatory Services(e) 1315 661 754 746 918
Planning & Development Services 1767 1826 2,002 1,765 2,006
Digital Infrastructure : : 147 178 230
Police 1009 739 804 851 738
Fire & Rescue Services 174 162 173 171 163
Central Services(c) 2154 1886 1,992 2,023 1,867
Trading(d) 3291 4371 3,462 1,934 1,578
Total Capital Expenditure 27911 28143 27,834 25,459 26,019

Notes:

(a) Figures are from the ‘England grossed excluding double counting’ total, which should avoid double counting due to any flow of grants, loans or other financial assistance or receipts between local authorities and/or between functional bodies of Greater London Authority.

(b) A number of schools changing their status to become academies from 2010-11, which are centrally funded rather than funded by local authorities.

(c) Central Services include court costs, local tax collection, and other core council services costs (such as IT). Some local authorities report commercial activity within this category. New categories and guidance were issued in Spring 2018 encouraging such expenditure to be recorded under Trading Services.

(d) Trading Services include the maintenance of direct labour and service organisations, such as civic halls, retail markets and industrial estates, and commercial activity.

(e) 2017-18 data includes Greater Manchester Waste Disposal Authority’s PFI buy-out (£542 million real-terms value).

  • Source: COR 2017-18 to 2021-22


Figure 3: Local authority capital expenditure in real terms by service, England, 2017-18 to 2021-22

Line graph showing increased expenditure on Housing Services in the last year, nearing the level of expenditure on Highways and Transport.

Notes:

  • Other services includes expenditure on Social Care, Public Health, Culture & Related Services, Environmental & Regulatory Services, Planning & Development Services, Digital Infrastructure, Police Services, Fire & Rescue Services and Central Services.


6. Difference between 2021-22 provisional and final outturn

Table 3 details changes in expenditure between provisional and final outturn for 2021-22.

Provisional outturn figures are collected on a quarterly basis in the Capital Payments Return (CPR). For the first three quarters (CPR1-3) local authorities only provide all-service totals of capital expenditure and receipts. For the fourth quarter (CPR4) they provide annual outturn figures at the service level as well as financing and prudential data. The provisional outturn figures in Table 3 are from CPR4.

The level of capital spending varies between CPR4 and COR because local authority accounts are not yet finalised when CPR4 is collected.

Local authorities in England reported £26 billion of capital expenditure at final outturn, up £397.9 million (1.6%) compared to the provisional outturn.

The changes were partly caused by a small number of local authorities whose reported capital expenditure increased significantly since the provisional outturn. Greater London Authority had the largest difference, up £224.6 million compared to provisional. The next largest differences were from West Yorkshire Combined Authority (up £88.1 million), Shropshire (up £85.5 million), Lewisham (up £46.9 million) and Barking & Dagenham (up £37.3 million).

The largest difference between provisional and final outturn was in Trading Services, where the total capital expenditure was £1.6 billion, up £532.8 million (51%) compared to the provisional release. Typically, this category shows more spend at final outturn due to recategorisation, as local authorities are reminded to report commercial acquisitions in this category. Other categories, notably Central Services, show lower spend at final outturn because of this.

Expenditure on Housing Services was £7.3 billion, up £133.5 million (1.9%) compared to the provisional release. This change was largely due to increased expenditure from Greater London Authority and London boroughs, which increased by £127.1 million (23.8%) and £32.6 million (1.2%) respectively compared to provisional figures.


Table 3: Local authority total capital expenditure and total capital receipts: provisional and final outturns by service, England, 2021-22

Cash terms table, all monetary figures as reported

£ millions

Service Provisional Outturn Change % Change
Education 2,138 2,171 34 1.6
Highways & Transport 7,338 7,400 62 0.8
  of which GLA 2,110 2,144 34 1.6
Social Care 325 352 27 8.3
Public Health 26 26 1 2.1
Housing 7,144 7,278 133 1.9
  of which London Boroughs 2,831 2,864 33 1.2
  of which GLA 535 662 127 23.8
Culture & Related Services 1,295 1,291 -3 -0.3
Environmental & Regulatory Services 999 918 -81 -8.1
Planning & Development Services 2,017 2,006 -11 -0.5
Digital Infrastructure 195 230 35 17.9
Police 706 738 32 4.5
Fire & Rescue Services 158 163 5 3.2
Central Services(b) 2,236 1,867 -368 -16.5
Trading(c) 1,045 1,578 533 51.0
Total Capital Expenditure 25,621 26,019 398 1.6
Total Capital Receipts 3,426 3,526 100 2.9

Notes:

(a) Figures are from the ‘England grossed excluding double-counting’ total, which should avoid double counting due to any flow of grants, loans or other financial assistance or receipts between local authorities and/or between functional bodies of Greater London Authority.

(b) Central Services include court costs, local tax collection, and other core council services costs (such as IT). Some local authorities report commercial activity within this category. New categories and guidance were issued in Spring 2018 encouraging such expenditure to be recorded under Trading Services.

(c) Trading Services include the maintenance of direct labour and service organisations, such as civic halls, retail markets and industrial estates.

  • Sources: CPR4 2021-22 and COR 2021-22


7. Financing of capital expenditure

Authorities finance their capital spending in a number of ways. A breakdown of the main elements of local authority capital funding is given below:

  • Capital grants are provided by government departments and other organisations. The majority of governmental grants are not ring-fenced, giving authorities flexibility to choose how to spend this money, provided it is used for capital purposes.

  • Prudential borrowing is borrowing freely undertaken by the local authority within the affordability limits stated by their auditors, as specified in the Local Government Act 2003.

  • Capital receipts are from the sale of capital assets.

  • Revenue resources can be used by local authorities to support capital spend. There is no restriction on revenue funds being used in this way, although accounting convention prevents capital resources being used to cover revenue spend.

As shown in Table 4 and Figure 4, capital grants replaced prudential borrowing as the largest source of financing of capital expenditure in 2021-22 at £10.2 billion, up £914.2 million (9.9%) in real terms compared to 2020-21. Prudential borrowing was £9 billion, down £1.6 billion (15%).


Table 4: Financing of local authority capital expenditure by source: final outturn, England, 2017-18 to 2021-22

Real terms series, all monetary figures in 2021-22 prices

£ millions

Source 2017-18 2018-19 2019-20 2020-21 (r) 2021-22
Total capital grants 8,969 9,905 8,736 9,281 10,195
  Grants from central government departments 6,711 7,711 6,388 6,922 8,069
  Grants from European structural & investment funds 30 73 50 49 51
  Grants from private developers & leaseholders, etc. 1,316 1,361 1,253 1,100 1,148
  Grants from non-departmental public bodies(a) 297 320 472 522 525
  Grants from the National Lottery 80 50 59 48 37
  Grants from Local Enterprise Partnerships 535 390 514 639 366
Total capital receipts 3,063 3,434 2,367 2,113 2,364
Total revenue resources 4,580 4,290 4,696 4,031 4,968
  Housing Revenue Amount 695 666 546 421 648
  Major Repairs Reserve 1,801 1,860 1,911 1,739 1,830
  General Fund (CERA) 2,084 1,765 2,238 1,871 2,489
Total prudential borrowing(b) 11,128 10,776 12,172 10,591 9,000
  Loans & other financial assistance from Local Enterprise 3 36 29 12 10
  Other borrowing & credit arrangements not supported by central government 11,124 10,740 12,143 10,579 8,989
Total resources used to finance capital expenditure(c) 27,740 28,405 27,971 26,016 26,526

Notes:

(a) Non-Departmental Public Bodies, organisations that are not government departments but which have a role in the processes of national government, such as the Sport England, English Heritage and Natural England.

(b) The Prudential System, which came into effect on 1 April 2004, allows local authorities to raise finance for capital expenditure - without Government consent - where they can afford to service the debt without extra Government support.

(c) From 2017-18 onwards, intra-local government transfers are being netted off for both expenditure and financing. However, as grants and loans made to other local authorities as part of expenditure may not equal the use of grants and loans from other authorities to finance expenditure within a financial year, financing and expenditure may not match.

  • Sources: COR 2017-18 to 2021-22


Figure 4: Financing of local authority capital expenditure in real terms by source, England, 2017-18 to 2021-22

£ millions

Line graph showing gradual increase of Total Capital Grants and gradual decrease of Total Prudential Borrowing over recent years, with Total Capital Grants now overtaking.


8. Accompanying tables and open data

8.1 Symbols used

: = not available
0 = zero or negligible
- = not relevant
|| = a discontinuity in data between years
(r) = Revised since the previous update of this data

8.2 Rounding

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

8.3 Tables

Accompanying tables are available to download alongside this release. These are:

Table 1a: Local authority capital expenditure & other transactions and capital receipts by category: forecast and final outturn, England, 2017-18 to 2021-22 (Real terms table, all monetary figures in 2021-22 prices)

Table 1b: Local authority capital expenditure & other transactions and capital receipts by category: forecast and final outturn, England, 2017-18 to 2021-22 (Cash terms table, all monetary figures as reported)

Table 2a: Local authority total capital expenditure by service: final outturn, England, 2017-18 to 2021-22 (Real terms table, all monetary figures in 2021-22 prices)

Table 2b: Local authority total capital expenditure by service: final outturn, England, 2017-18 to 2021-22 (Cash terms table, all monetary figures as reported)

Table 3: Local authority total capital expenditure and total capital receipts: provisional and final outturns by service, England, 2021-22 (Cash terms table, all monetary figures as reported)

Table 4a: Financing of local authority capital expenditure by source: final outturn, England, 2017-18 to 2021-22 (Real terms table, all monetary figures in 2021-22 prices)

Table 4b: Financing of local authority capital expenditure by source: final outturn, England, 2017-18 to 2021-22 (Cash terms table, all monetary figures as reported)

Table 5: Local authority total capital expenditure and total capital receipts: final outturn by service and category, England, 2021-22 (Cash terms table, all monetary figures as reported)

Table 6: Local authority prudential system information: final outturn by category, England, 2021-22 (Cash terms table, all monetary figures as reported)

Table 7a: Local authority prudential system information: net debt as at 31 March by class of authority, England, 2017-18 to 2021-22 (Real terms table, all monetary figures in 2021-22 prices)

Table 7b: Local authority prudential system information: net debt as at 31 March by class of authority, England, 2017-18 to 2021-22 (Cash terms table, all monetary figures as reported)

Table 8a: Local authority prudential system information: self-financed borrowing by class of authority, England, 2017-18 to 2021-22 (Real terms table, all monetary figures in 2021-22 prices)

Table 8b: Local authority prudential system information: self-financed borrowing by class of authority, England, 2017-18 to 2021-22 (Cash terms table, all monetary figures as reported)

All data in this release are available at local authority level for:

COR A1: Total capital expenditure and receipts, England, 2021-22

COR A2: Further details of capital expenditure on Social Care, Grants & Loans, Roads, Street Lighting & Road Safety, and Section 16(2)(b) Direction, England, 2021-22

COR B: Financing of capital expenditure, England, 2021-22

COR C: Prudential system information, England, 2021-22

COR D: Accumulated capital receipts and Major repairs reserve, England, 2021-22

2021 to 2022 supplementary data: Housing Revenue Account capital receipts, expenditure and financing

See the Local authority capital expenditure, receipts and financing webpage for all tables and workbooks, as well as related statistical releases.

9. 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.