National statistics

Local authority capital expenditure and receipts in England: 2022 to 2023 final outturn

Updated 4 March 2024

Applies to England

1. In this release:

• Capital expenditure by local authorities in England totalled £27.5 billion in 2022-23, down £228 million (-0.8%) in real terms compared to 2021-22.
• Total expenditure on fixed assets totalled £21 billion in 2022-23, down £486 million (-2.3%) in real terms compared to 2021-22. This was partly due to decreased expenditure on the acquisition of land and existing buildings, which has decreased by £251 million (-11.6%) compared to 2021-22.
• Total financial expenditure totalled £6.6 billion in 2022-23, up £258 million (4%) in real terms compared to 2021-22.
• Housing overtook Highways & Transport as the service area with the greatest expenditure, with Housing increasing to £9 billion (15.5% increase) and Highways & Transport decreasing to £7.5 billion (-5%) in real terms in 2022-23 compared to 2021-22.
• Capital receipts totalled £4.6 billion in 2022-23, up £793 million (21.1%) in real terms than in 2021-22.
• Capital grants remained the largest source of financing of capital expenditure in 2022-23 after overtaking prudential borrowing in 2021-22. Capital grants increased to £11.5 billion, up £599 million (5.5%) in real terms compared to 2021-22. Prudential borrowing decreased to £9.2 billion, down £353 million (-3.7%).

Release date: 26 October 2023
Date of next release: October 2024
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 2022 to March 2023. These data are derived from valid Capital Outturn Returns (COR) from 416 out of 425 local authorities in England. Data has been imputed for the following nine authorities who have not yet submitted: Birmingham, Colchester, Dover, Gloucester, North Warwickshire, Pendle, Ribble Valley, South Cambridgeshire, and South Somerset. These data are collated by the Data, Analysis 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 2023. This was based on information from Capital Payments and Receipts Returns 4 (CPR4) submitted by local authorities in England.

3. Local Government Finance Data Review

DLUHC recently carried out a comprehensive review of local government finance statistics. The review considered the following groups of statistical collections:

• local authority borrowing and investments
• local authority capital expenditure, receipts and financing
• local authority revenue expenditure and financing (Revenue Account Budget, Revenue Outturn and Quarterly Revenue Outturn)

Details of the outcome of the review were published on 11 April 2022 and can be found here: Review of Local Government Finance Statistics.

An update to the review was published on 15 May 2023 and details the progress made against the recommendations. It can be found here: Local government finance statistics: update and review recommendations.

The local authority level data tables accompanying this release include two additional tables covering new data items collected this year. These are:

• Local authority trading companies, subsidiaries, associates and joint ventures by authority, England, 2022-23
• Grants from central government used to finance capital expenditure by authority, England, 2022-23

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 £27.5 billion in 2022-23, down £228 million (-0.8%) in real terms compared to 2021-22. Total financial expenditure increased by £258 million (4.1%), up to a total of £6.6 billion, however this was offset by a decrease of £486 million (-2.3%) in total expenditure on fixed assets, which totalled £21 billion.

The increase in financial expenditure was largely due to an increase in grants, loans and other financial assistance, which increased to £6.1 billion, a £553 million (10%) increase compared to 2021-22. The decrease in expenditure on fixed assets was in part due to a decrease in expenditure on acquisition of land and existing buildings, which fell to £1.9 billion, a £251 million (-11.6%) decrease compared to 2021-22. This is the fourth consecutive year this has fallen and expenditure is now less than 40% of what it was when it peaked in 2018-19. New construction, conversion and renovation remained the largest category of capital expenditure at £17.2 billion, although this decreased slightly by £210 million (-1.2%) compared to 2021-22.

Capital receipts totalled £4.6 billion in 2022-23, up £793 million (21.1%) in real terms than in 2021-22.

Expenditure treated as capital by virtue of Section 16(2)(b) Direction increased to £795 million. This was over three times larger than the previous year and is largely due to special capitalisation directives.

Table 1: Local authority capital expenditure & other transactions and capital receipts by category: forecast and final outturn, England, 2018-19 to 2022-23

Real terms series, all monetary figures in 2022-23 prices (£ millions)

Category	Type	2018-19	2019-20	2020-21	2021-22	2022-23
Acquisition of land & existing buildings	Forecast (adjusted)	5,638	5,955	5,332	4,264	2,934
	Outturn (final)	5,060	4,728	2,989	2,162	1,911
New construction, conversion & renovation	Forecast (adjusted)	15,321	15,882	17,464	19,180	17,000
	Outturn (final)	14,969	15,358	15,590	17,382	17,172
Vehicles, plant, furniture & equipment	Forecast (adjusted)	1,598	1,428	1,688	1,754	1,828
	Outturn (final)	1,489	1,842	1,630	1,631	1,596
Intangible fixed assets	Forecast (adjusted)	410	445	323	381	386
	Outturn (final)	336	305	303	288	296
Total expenditure on fixed assets	Forecast (adjusted)	22,968	23,712	24,807	25,579	22,147
	Outturn (final)	21,854	22,232	20,514	21,463	20,977

Category	Type	2018-19	2019-20	2020-21	2021-22	2022-23
Grants, loans and other financial assistance	Forecast (adjusted)	7,071	6,892	6,779	6,929	5,747
	Outturn (final)	5,696	5,190	5,371	5,511	6,064
Acquisition of share and loan capital	Forecast (adjusted)	648	600	459	268	256
	Outturn (final)	2,034	1,906	1,106	782	488
Total financial expenditure	Forecast (adjusted)	7,719	7,491	7,238	7,196	6,002
	Outturn (final)	7,731	7,096	6,477	6,293	6,551

Category	Type	2018-19	2019-20	2020-21	2021-22	2022-23
Total capital expenditure	Forecast (adjusted)	30,687	31,203	32,045	32,775	28,150
	Outturn (final)	29,585	29,327	26,991	27,756	27,528
of which GLA[1]	Forecast (adjusted)	4,503	4,652	4,576	3,741	3,694
	Outturn (final)	4,664	4,212	3,627	3,621	3,650
Payment of LSVT levy	Forecast (adjusted)	0	0	0	0	0
	Outturn (final)	0	0	0	4	1
Expenditure treated as capital by virtue of a Section 16(2)(b) Direction[2]	Forecast (adjusted)	67	78	67	186	184
	Outturn (final)	282	200	204	244	795
Total capital expenditure & other transactions	Forecast (adjusted)	30,755	31,281	32,111	32,961	28,333
	Outturn (final)	29,866	29,527	27,194	28,003	28,323

Category	Type	2018-19	2019-20	2020-21	2021-22	2022-23
Total capital receipts	Forecast (adjusted)	3,318	2,854	4,286	2,566	2,441
	Outturn (final)	4,544	3,150	2,818	3,761	4,554

Notes:

1. Forecasts are unadjusted at the GLA level.
2. 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.

• Sources: CER 2018-19 to 2022-23 and COR 2018-19 to 2022-23

Figure 1: Local authority capital expenditure in real terms by economic category, England, 2018-19 to 2022-23

A 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 2018-19. 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, 2018-19 to 2022-23

A line graph showing a consistent overestimation of capital expenditure by the unadjusted forecast and a more accurate estimate by the adjusted forecast. After four year in which the adjusted forecast was also higher than outturn, the overestimation was much smaller in 2022-23.

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 2018-19.

Highways & Transport Services and Housing Services continued to account for the majority of local authority capital expenditure in 2022-23. Expenditure on Housing Services overtook spending on Highways & Transport services, with the two accounting for £9 billion (32.6%) and £7.5 billion (27.2%) 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 11.8 percentage points.

Expenditure on Housing Services was up by £1.2 billion (15.5%) in real terms compared to the previous year. This was largely driven by increased expenditure by London boroughs and Greater London Authority, but increased expenditure was also seen by other authorities.

Expenditure on Highways & Transport Services was down £398 million (-5%) in real terms compared to the previous year. Greater London Authority (GLA) continues to have the highest expenditure from a single authority (£2 billion) despite a decrease of £304 million (-13.3%) in real terms compared to the previous year.

Expenditure on Trading Services totalled £1.3 billion in 2022-23, down £378 million (-22.5%) 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 fourth consecutive year of decline.

Table 2: Local authority total capital expenditure by service: final outturn, England, 2018-19 to 2022-23

Real terms series, all monetary figures in 2022-23 prices (£ millions)

Service	2018-19 Outturn (final)	2019-20 Outturn (final)	2020-21 Outturn (final)	2021-22 Outturn (final)	2022-23 Outturn (final)
Education[1]	2,768	2,578	2,279	2,316	2,098
Highways & Transport	8,854	8,339	8,571	7,894	7,496
of which GLA	3,525	3,018	2,716	2,287	1,983
Social Care	385	414	311	375	384
Public Health	23	23	25	28	39
Housing	6,153	6,753	6,441	7,764	8,969
of which London Boroughs	2,198	2,561	2,522	3,055	3,757
of which GLA	651	646	334	706	1,180
Culture & Related Services	1,262	1,386	1,234	1,377	1,339
Environmental & Regulatory Services	696	795	790	979	1,290
Planning & Development Services	1,920	2,110	1,871	2,140	1,954
Digital Infrastructure	[z]	155	189	245	179
Police	777	847	902	787	772
Fire & Rescue Services	170	182	181	174	200
Central Services[2]	1,982	2,099	2,145	1,992	1,502
Trading[3]	4,595	3,648	2,050	1,683	1,305
Total Capital Expenditure	29,585	29,327	26,991	27,756	27,528

Notes:

1. A number of schools changing their status to become academies from 2010-11, which are centrally funded rather than funded by local authorities.
2. Central Services include court costs, local tax collection, and other core council services costs (such as IT).
3. Trading Services include the maintenance of direct labour and service organisations, such as civic halls, retail markets and industrial estates, and commercial activity.
4. Source: COR 2018-19 to 2022-23

Figure 3: Local authority capital expenditure in real terms by service, England, 2018-19 to 2022-23

Notes:

1. 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.

A line graph showing increased expenditure on Housing Services in the last two years, surpassing the level of expenditure on Highways and Transport in 2022-23.

6. Difference between 2022-23 provisional and final outturn

Table 3 details changes in expenditure between provisional and final outturn for 2022-23.

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 £27.5 billion of capital expenditure at final outturn, up £737 million (2.8%) compared to the provisional outturn.

The increase in the final outturn compared to the provisional outturn was largely caused by an increase in expenditure on housing, which increased by £619 million (7.4%). This was largely driven by an increase in expenditure on housing from London Boroughs and from the Greater London Authority, which increased by £416 million (12.5%) and £102 million (9.5%) respectively compared to their provisional figures. Expenditure on highways and transport was another driver behind the increase in capital expenditure in the final outturn compared to the provisional outturn, which increased by £152 million (2.1%).

Expenditure on trading services increased by £362 million (38.4%) compared with provisional figures. 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 central services decreased by £292 million (-16.3%).

Total Capital Receipts increased by £1.1 billion (32.5%) compared with provisional figures. This was mainly driven by increases in the Sale and disposal of tangible fixed assets, and in Repayments of grants, loans, and other financial assistance, which increased by £709 million (24.2%) and £428 million (84.9%) respectively compared to their provisional figures.

Table 3: Local authority total capital expenditure and total capital receipts: provisional and final outturns by service, England, 2022-23

Cash terms table, all monetary figures as reported (£ millions)

Service	Provisional	Outturn	Change	Percentage Change
Education	2,102	2,098	-4	-0.2
Highways & Transport	7,344	7,496	152	2.1
of which GLA	1,972	1,983	11	0.6
Social Care	368	384	16	4.3
Public Health	21	39	18	85.7
Housing	8,350	8,969	619	7.4
of which London Boroughs	3,341	3,757	416	12.5
of which GLA	1,078	1,180	102	9.5
Culture & Related Services	1,307	1,339	32	2.4
Environmental & Regulatory Services	1,209	1,290	81	6.7
Planning & Development Services	2,253	1,954	-299	-13.3
Digital Infrastructure	200	179	-21	-10.5
Police	706	772	66	9.3
Fire & Rescue Services	194	200	6	3.1
Central services[1]	1,794	1,502	-292	-16.3
Trading[2]	943	1,305	362	38.4
Total Capital Expenditure	26,791	27,528	737	2.8
Total Capital Receipts	3,438	4,554	1,116	32.5

Notes:

1. 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.
2. Trading Services include the maintenance of direct labour and service organisations, such as civic halls, retail markets and industrial estates.
3. Sources: CPR4 2022-23 and COR 2022-23

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 and this trend has continued in 2022-23, with capital grants increasing to £11.5 billion, up £599 million (5.5%) in real terms compared to 2021-22, whilst prudential borrowing decreased to £9.2 billion, down £353 million (-3.7%).

Capital grants made up 39.6% of total financing of capital expenditure in 2022-23 compared to 38.4% in 2021-22, whilst prudential borrowing made up 31.9% in 2022-23 compared to 33.9% in 2021-22.

Table 4: Financing of local authority capital expenditure by source: final outturn, England, 2018-19 to 2022-23

Real terms series, all monetary figures in 2022-23 prices (£ millions)

Source	2018-19	2019-20	2020-21	2021-22	2022-23
Total capital grants	10,411	9,205	9,839	10,876	11,475
Grants from central government departments	8,105	6,731	7,338	8,608	9,166
Grants from European structural & investment funds	77	52	52	54	91
Grants from private developers & leaseholders, etc.	1,431	1,320	1,166	1,225	1,290
Grants from non-departmental public bodies[1]	336	498	553	560	710
Grants from the National Lottery	53	61	51	39	43
Grants from Local Enterprise Partnerships	410	541	678	390	175
Total capital receipts	3,609	2,494	2,240	2,522	2,864
Total revenue resources	4,509	4,948	4,274	5,300	5,360
Housing Revenue Account	700	576	446	691	476
Major Repairs Reserve	1,954	2,014	1,844	1,952	1,876
General Fund (CERA)	1,855	2,358	1,984	2,655	3,008
Total prudential borrowing[2]	11,327	12,825	11,228	9,601	9,248
Loans & other financial assistance from Local Enterprise	38	30	12	11	12
Other borrowing & credit arrangements not supported by central government	11,290	12,795	11,216	9,589	9,236
Total resources used to finance capital expenditure	29,859	29,471	27,581	28,297	28,948

Notes:

1. 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.
2. 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.

• Sources: COR 2018-19 to 2022-23

Figure 4: Financing of local authority capital expenditure in real terms by source, England, 2018-19 to 2022-23

A line graph showing gradual increase of Total Capital Grants and gradual decrease of Total Prudential Borrowing over recent years, with Total Capital Grants being the highest category for the last two years.

8. Accompanying tables and open data

8.1 Symbols used

0 = zero or negligible

[x] = Data missing / not available

[z] = Not applicable

[r] = Revision

[b] = Discontinuity

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, 2018-19 to 2022-23 (Real terms table, all monetary figures in 2022-23 prices)

Table 1b: Local authority capital expenditure & other transactions and capital receipts by category: forecast and final outturn, England, 2018-19 to 2022-23 (Cash terms table, all monetary figures as reported)

Table 2a: Local authority total capital expenditure by service: final outturn, England, 2018-19 to 2022-23 (Real terms table, all monetary figures in 2022-23 prices)

Table 2b: Local authority total capital expenditure by service: final outturn, England, 2018-19 to 2022-23 (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, 2022-23 (Cash terms table, all monetary figures as reported)

Table 4a: Financing of local authority capital expenditure by source: final outturn, England, 2018-19 to 2022-23 (Real terms table, all monetary figures in 2022-23 prices)

Table 4b: Financing of local authority capital expenditure by source: final outturn, England, 2018-19 to 2022-23 (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, 2022-23 (Cash terms table, all monetary figures as reported)

Table 6: Local authority prudential system information: final outturn by category, England, 2022-23 (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, 2018-19 to 2022-23 (Real terms table, all monetary figures in 2022-23 prices)

Table 7b: Local authority prudential system information: net debt as at 31 March by class of authority, England, 2018-19 to 2022-23 (Cash terms table, all monetary figures as reported)

Table 8a: Local authority prudential system information: self-financed borrowing by class of authority, England, 2018-19 to 2022-23 (Real terms table, all monetary figures in 2022-23 prices)

Table 8b: Local authority prudential system information: self-financed borrowing by class of authority, England, 2018-19 to 2022-23 (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, 2022-23

COR A2: Further details of capital expenditure on Social Care, Grants & Loans, Roads, Street Lighting & Road Safety, and Section 16(2)(b) Direction, England, 2022-23

COR B: Financing of capital expenditure, England, 2022-23

COR C: Prudential system information, England, 2022-23

COR D: Accumulated capital receipts and Major repairs reserve, England, 2022-23

2022 to 2023 supplementary data: Housing Revenue Account capital receipts, expenditure and financing

COR E: Local authority trading companies, subsidiaries, associates and joint ventures by authority, England, 2022-23

COR F: Grants from central government used to finance capital expenditure by authority, England, 2022-23

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.