National statistics

Local authority capital expenditure and receipts in England: 2022 to 2023 provisional outturn and 2023 to 2024 forecast

Published 22 June 2023

Applies to England

1. In this release:

• Capital expenditure by local authorities in England in 2022-23 totalled £26.8 billion, £707 million (-3%) lower in real terms than in 2021-22.

• Housing overtook highways & transport as the service area with the greatest expenditure, with housing increasing to £8.4 billion (9% increase) and highways & transport decreasing to £7.3 billion (-6% decrease) in real terms in 2022-23 compared to 2021-22.

• Capital expenditure is forecast to total £27.3 billion (2022-23 prices) in 2023-24. This is £473 million (2%) higher compared to the 2022-23 provisional outturn.

• Expenditure on housing and highways & transport are forecast to be roughly equal in 2023-24, at £7.7 billion (28.4% of total) and £7.5 billion (27.6% of total), respectively.

• Capital receipts received by local authorities in England in 2022-23 totalled £3.4 billion, £289 million (-8%) lower compared to 2021-22. Capital receipts are forecast to continue decreasing to £2.5 billion in 2023-24.

• Capital grants were the largest source of financing in 2022-23 at £11.5 billion (41% of total), followed by prudential borrowing at £9.2 billion (33% of total). Capital grants are forecast to continue growing as the largest source of financing during 2023-24 to £12.2 billion (45% of total), whilst prudential borrowing is forecast to continue to decrease to £8.5 billion (32% of total).

Release date: 22 June 2023
Date of next release: June 2024
Responsible Statistician: Imogen Ormston
Contact: CapitalData@levellingup.gov.uk
Media enquiries: NewsDesk@levellingup.gov.uk

2. Introduction

This Statistical Release presents National Statistics on capital expenditure and receipts and capital financing for local authorities in England for April 2022 to March 2023 and forecast capital expenditure and receipts and capital financing for April 2023 to March 2024.

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.

The 2022-23 provisional outturn data in this release are derived from Capital Payments & Receipts 4 (CPR4) returns, while the 2023-24 forecast data are derived from Capital Estimates Returns (CER). Both sets of returns are collated by the Data, Analytics and Statistics (DAS) Division of the Department for Levelling Up, Housing & Communities & Local Government (DLUHC).

CPR4 and CER forms capture local authority capital expenditure and receipts by economic category and service area, as well as a breakdown of how expenditure is financed, and prudential system information. The service areas are based on the Service Reporting Code of Practice for Local Authorities 2022-23 (SeRCOP) produced by the Chartered Institute of Public Finance and Accountancy (CIPFA).

The England totals in this release have been adjusted to remove double counting that would otherwise occur from transfers between local authorities and between functional bodies of the Greater London Authority (GLA). In addition, England totals of forecasted capital expenditure include adjustments to remedy perennial over-forecasting. Unadjusted totals are also included in the local authority level data tables that supplement this release. Please see the accompanying technical notes document for further details on the adjustments.

The 2022-23 provisional data in this publication is based on returns from 420 (99%) local authorities in England and 5 imputed records. These local authorities are Bristol, Gloucester, Halton, South Somerset and Stratford-on-Avon. These 5 authorities can be identified where the data source column states “no data” in the local authority data worksheets of capital payments and receipts. The data for these imputed records were estimated using forecast data from each of these local authorities. Please see the accompanying technical notes document for further details on grossing and imputation.

The 2023-24 forecast data is based on valid Capital Estimates Returns from 410 out of 410 (100%) local authorities. The number of authorities is lower than that for the 2022-23 provisional data due to local authority mergers which took place in April 2023.

2.1 Notes on Forecast Data

Each year, the upcoming year’s forecast is adjusted to factor in consistent over-forecasting by local authorities based on trends in recent years. In 2020-21 and 2021-22 the level of overforecasting increased and this has been factored into forecasts for 2022-23 and 2023-24. Consequently, users should be cautious when comparing forecasts over time, and particularly between 2021-22 and 2022-23/2023-24 as these will reflect changes in the adjustments used as well as changes in local authority forecasts.

2.2 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 on review recommendations.

3. Capital expenditure and receipts by economic category

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

Capital expenditure is divided into expenditure on fixed assets, which includes spending on tangible and intangible fixed assets, and financial expenditure, which includes the following payments funding capital expenditure: grants, loans, and the acquisitions of share or loan capital.

Table 1 illustrates the change in the pattern of expenditure by economic category of expenditure from 2018-19 to 2023-24 in real terms, based on actual outturn, provisional outturn and forecast outturn data.

Table 1: Local authority capital expenditure & other transactions and capital receipts by category: forecast, provisional and final outturn, England 2018-19 to 2023-24 (real terms in 2022-23 prices, £ millions)

Category	Type	2018-19	2019-20	2020-21	2021-22	2022-23	2023-24
Acquisition of land & existing buildings	Forecast (adjusted)	5,648	5,952	5,306	4,224	2,934	1,609
	Outturn	5,070	4,725	2,974	2,142	1,817	[z]
New construction, conversion & renovation	Forecast (adjusted)	15,349	15,873	17,378	19,002	17,000	17,659
	Outturn	14,995	15,349	15,513	17,220	17,203	[z]
Vehicles, plant, furniture & equipment	Forecast (adjusted)	1,601	1,428	1,679	1,738	1,828	1,835
	Outturn	1,492	1,841	1,622	1,616	1,511	[z]
Intangible fixed assets	Forecast (adjusted)	411	445	322	378	386	304
	Outturn	336	305	302	285	291	[z]
Total expenditure on fixed assets	Forecast (adjusted)	23,009	23,699	24,685	25,341	22,147	21,406
	Outturn	21,893	22,220	20,412	21,264	20,822	[z]

Category	Type	2018-19	2019-20	2020-21	2021-22	2022-23	2023-24
Grants, loans or other financial assistance	Forecast (adjusted)	7,085	6,888	6,745	6,864	5,747	5,671
	Outturn	5,706	5,187	5,345	5,459	5,515	[z]
Acquisition of share or loan capital	Forecast (adjusted)	649	600	457	265	256	187
	Outturn	2,038	1,904	1,101	775	454	[z]
Total financial expenditure	Forecast (adjusted)	7,734	7,487	7,202	7,129	6,002	5,857
	Outturn	7,745	7,092	6,446	6,234	5,969	[z]

Category	Type	2018-19	2019-20	2020-21	2021-22	2022-23	2023-24
Total capital expenditure	Forecast (adjusted)	30,743	31,186	31,887	32,470	28,150	27,264
	Outturn	29,638	29,312	26,858	27,498	26,791	[z]
of which GLA [note 1]	Forecast (adjusted)	4,511	4,650	4,553	3,706	3,694	3,125
	Outturn	4,672	4,210	3,609	3,587	3,673	[z]
Payment of LSVT levy	Forecast (adjusted)	0	0	0	0	0	0
	Outturn	0	0	0	4	0	[z]
Expenditure treated as capital by virtue of a Section 16(2)(b) Direction [note 2]	Forecast (adjusted)	68	78	66	184	184	391
	Outturn	282	200	202	242	773	[z]
Total capital expenditure & other transactions	Forecast (adjusted)	30,810	31,264	31,953	32,654	28,333	27,655
	Outturn	29,920	29,512	27,060	27,743	27,564	[z]

Category	Type	2018-19	2019-20	2020-21	2021-22	2022-23	2023-24
Total capital receipts	Forecast (adjusted)	3,324	2,853	4,264	2,542	2,441	2,545
	Outturn	4,552	3,149	2,804	3,727	3,438	[z]

Table 1 notes:

[note 1] Forecast is unadjusted at the Greater London Authority level.

[note 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.

[z] Not applicable. 2023-24 provisional outturn data will be available in June 2024.

Expenditure treated as capital by virtue of a Section 16(2)(b) Direction has increased to £773 million in 2022-23. This was three times larger than the previous year. This is largely due to special capitalisation directives. It is forecast to fall somewhat to £391 million in 2023-24 in real terms. However, this is still higher than levels seen historically.

3.1 Provisional outturn 2022-23

Local authorities’ provisional outturn capital expenditure in England in 2022-23 totalled £26.8 billion. This is a £707 million (-3%) decrease compared to 2021-22. New construction, conversion & renovation remained the largest type of capital expenditure, accounting for £17.2 billion (64%) in real terms of all capital expenditure in 2022-23.

Total expenditure on fixed assets totalled £20.8 billion in 2022-23, down £442 million (-2%) in real terms from 2021-22. This decrease was driven primarily by a decline in expenditure on acquisition of land & existing buildings, which decreased by £325 million (-15%) compared to 2021-22.

Total financial expenditure totalled £6 billion in 2022-23, down £265 million (-4%) in real terms from 2021-22. The main driver of this decrease was acquisition of share and loan capital, which was £321 million (-41%) lower than in 2021-22.

Provisional outturn capital receipts totalled £3.4 billion in 2022-23, £289 million (-8%) lower compared to 2021-22.

3.2 Forecast outturn 2023-24

Figure 1 shows the difference between forecast and outturn data for total capital expenditure and total capital receipts since 2018-19. Forecasts are adjusted to factor in consistent overforecasting by local authorities. 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.

Capital expenditure is forecast to total £27.3 billion in real terms during 2023-24. This is £473 million (2%) higher than the 2022-23 provisional outturn of £26.8 billion. New construction, conversion & renovation is forecast to remain the largest type of capital expenditure, accounting for £17.7 billion (65%) in real terms of all capital expenditure in 2023-24.

Total expenditure on fixed assets is forecast to total £21.4 billion in 2023-24, an increase of £584 million (3%) in real terms from 2022-23. This is forecast to be primarily driven by an increase in expenditure on new construction, conversion & renovation, which is forecast to increase by £456 million (3%) and remain the largest category of expenditure on fixed assets. Acquisition of land & existing buildings is forecast to continue decreasing in 2023-24 to £1.6 billion, £208 million (-11%) lower than in 2022-23.

Total financial expenditure is forecast to total £5.9 billion in 2023-24, down £112 million (-2%) in real terms from 2022-23. The main driver of this decrease is forecast to be acquisition of share and loan capital, which is forecast to be £267 million (-59%) lower than in 2022-23. However, this overall decrease is forecast to be partially offset by a small increase in grants, loans or other financial assistance, which makes up 97% of total financial expenditure and is forecast to increase to £5.7 billion (3%) in 2023-24.

Provisional outturn capital receipts are forecast to total £2.5 billion in 2023-24, £893 million (-26%) lower compared to 2022-23.

Figure 1: A comparison of adjusted forecast and outturn for total capital expenditure and receipts, England 2018-19 to 2023-24 (real terms in 2022-23 prices, £ billions)

A time series line graph showing total capital expenditure and capital receipts, provisional (2022-23), unadjusted and adjusted forecast (2023-24). Unadjusted forecasts are much higher than their respective outturns, whilst the adjusted forecasts are much closer to the outturns.

4. Capital Expenditure by Service Area

Table 2 illustrates the pattern of expenditure for the broad categories of services since 2018-19 in real terms.

Table 2: Local authority capital expenditure & other transactions and capital receipts by service: forecast, provisional and final outturn, England 2018-19 to 2023-24 (real terms in 2022-23 prices, £ millions)

Category	2018-19 Outturn (final)	2019-20 Outturn (final)	2020-21 Outturn (final)	2021-22 Outturn (final)	2022-23 Outturn (provisional)	2023-24 Forecast (adjusted)
Total Education	2,773	2,576	2,268	2,295	2,102	2,434
Total Highways & Transport	8,870	8,335	8,529	7,821	7,344	7,519
of which GLA [note 1]	3,531	3,017	2,702	2,266	1,972	1,775
Total Social Care	385	414	310	372	368	392
Total Public Health	23	23	25	28	21	14
Total Housing	6,164	6,750	6,410	7,692	8,350	7,748
of which London Boroughs [note 2]	2,202	2,559	2,510	3,026	3,341	3,139
of which GLA [note 1]	652	646	332	699	1,078	862
Total Culture & Related Services	1,265	1,385	1,228	1,365	1,307	1,432
Total Environmental & Regulatory Services	696	795	787	970	1,209	1,100
Total Planning & Development Services	1,923	2,109	1,862	2,120	2,253	2,347
Total Digital Infrastructure	[z]	155	188	243	200	167
Total Police	778	847	897	780	706	772
Total Fire & Rescue Services	171	182	180	172	194	183
Central Services [note 3]	1,986	2,098	2,134	1,973	1,794	1,977
Trading [note 4, 5]	4,603	3,645	2,040	1,668	943	1,178
All Services Total	29,638	29,312	26,858	27,498	26,791	27,264

Table 2 notes:

[note 1] Forecast is unadjusted at the GLA level.

[note 2] Forecast is adjusted at the London Borough level.

[note 3] Central services include court costs, local tax collection, and other core council services costs (such as IT).

[note 4] Trading services include the maintenance of direct labour and service organisations, such as civic halls, retail markets and industrial estates, and commercial activity.

[note 5] Typically, expenditure on trading services 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.

[z] Not applicable.

4.1 Provisional outturn 2022-23

Expenditure on housing overtook spending on highways & transport as the largest service of capital expenditure in 2022-23, accounting for £8.4 billion (31%) and £7.3 billion (27%) of total capital expenditure, respectively.

Expenditure on housing increased in 2022-23 by £658 million (9%) compared to 2021-22, whilst spending on highways & transport decreased in 2022-23 by £477 million (-6%) compared to 2021-22.

Expenditure on trading services saw a substantial decline in 2022-23 compared to 2021-22, decreasing by £725 million (-43%). Typically, expenditure on trading services 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.

4.2 Forecast outturn 2023-24

Expenditure on housing is forecast to continue to be higher than spending on highways & transport as the largest service of capital expenditure in 2023-24, accounting for £7.7 billion (28.4%) and £7.5 billion (27.6%) of total capital expenditure, respectively.

Despite this, expenditure on housing is forecast to decrease in 2023-24 by £602 million (-7%) compared to 2022-23, whilst spending on highways & transport is forecast to increase in 2023-24 by £175 million (2%) compared to 2022-23.

5. Financing of Capital Expenditure & Other Transactions

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 except where special capitalisation directives are made by virtue of a Section 16(2)(b) Direction.

5.1 Provisional outturn 2022-23

Table 3 shows a breakdown of levels of financing from different sources.

Table 3: Financing of local authority capital expenditure by source: forecast, provisional and final outturn, England 2018-19 to 2023-24 (real terms in 2022-23 prices, £ millions)

Category	2018-19 Outturn (final)	2019-20 Outturn (final)	2020-21 Outturn (final)	2021-22 Outturn (final)	2022-23 Outturn (provisional)	2023-24 Forecast (adjusted)
Total grants used to finance capital expenditure	10,430	9,199	9,791	10,774	11,496	12,181
Grants from central government departments	8,120	6,727	7,302	8,528	9,310	10,171
Grants from European structural & investment funds	77	53	52	54	134	22
Grants from private developers & leaseholders, etc.	1,434	1,320	1,161	1,213	1,214	1,275
Grants from non-departmental public bodies [note 1]	337	497	551	554	667	626
Grants from the National Lottery	52	62	51	39	25	25
Grants from Local Enterprise Partnerships	410	541	674	386	145	63
Total capital receipts used to finance capital expenditure	3,616	2,493	2,229	2,498	1,984	1,910
Total revenue account resources used to finance capital expenditure	4,518	4,945	4,253	5,250	5,444	4,346
Housing Revenue Account	701	575	444	685	672	572
Major Repairs Reserve	1,958	2,013	1,835	1,934	1,903	1,702
General Fund Revenue Account	1,858	2,357	1,974	2,631	2,869	2,072
Total prudential borrowing [note 2]	11,348	12,818	11,173	9,511	9,207	8,483
Loans & other financial assistance from Local Enterprise partnerships	38	30	12	11	20	72
Other borrowing & credit arrangements not supported by central government	11,310	12,788	11,161	9,500	9,187	8,411
Total resources used to finance capital expenditure & other transactions [note 3]	29,913	29,456	27,445	28,034	28,131	26,920

Table 3 notes:

[note 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.

[note 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.

[note 3] From 2017-18 onwards, intra-local government transfers are subtracted from 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. Over the last four years, the amount of intra local authority payments in forecast data has been notably different in the financing table compared to expenditure data. This results in the financing total (adjusted, excluding double counting) being different to the corresponding total in the expenditure tables.

As shown in Figure 2, capital grants continue to grow as the largest source of financing of capital expenditure in 2022-23, increasing by £722 million (7%) to £11.5 billion compared to 2021-22. Capital grants make up 41% of all resources used to finance capital expenditure.

Prudential borrowing has continued to decline as a source of capital expenditure financing in 2022-23, decreasing by £304 million (-3%) compared to 2021-22. Prudential borrowing makes up 33% of all resources used to finance capital expenditure.

5.2 Forecast outturn 2023-24

Capital grants are forecast to continue increasing as the largest source of financing of capital expenditure in 2023-24, increasing by £685 million (6%) to £12.2 billion compared to 2022-23. Capital grants are forecast to make up 45% of all resources used to finance capital expenditure.

Prudential borrowing is also forecast to continue its trend in declining as a source of capital expenditure financing in 2023-24, decreasing by £724 million (-8%) compared to 2022-23. Prudential borrowing is forecast to make up 32% of all resources used to finance capital expenditure.

Figure 2: Adjusted forecast and actual financing of local authority capital expenditure, England 2018-19 to 2023-24 (real terms in 2022-23 prices, £ billions)

A time series line graph showing provisional (2022-23) and adjusted forecast (2023-24) financing of local authority capital expenditure and other transactions. Total grants continue the trend of increasing and remaining the largest source of financing, whilst prudential borrowing continues decreasing.

6. Additional Information

6.1 Accompanying 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, provisional and final outturn, England 2018-19 to 2023-24 (real terms in 2022-23 prices, £ millions)

• Table 1b: Local authority capital expenditure & other transactions and capital receipts by category: forecast, provisional and final outturn, England 2018-19 to 2023-24 (cash terms, £ millions)

• Table 2a: Local authority capital expenditure by service: forecast, provisional and final outturn, England 2018-19 to 2023-24 (real terms in 2022-23 prices, £ millions)

• Table 2b: Local authority capital expenditure by services: forecast, provisional and final outturn, England 2018-19 to 2023-24 (cash terms, £ millions)

• Table 3a: Financing of local authority capital expenditure & other transactions by source: forecast, provisional and final outturn, England 2018-19 to 2023-24 (real terms in 2022-23 prices, £ millions)

• Table 3b: Financing of local authority capital expenditure by source: forecast, provisional and final outturn, England 2018-19 to 2023-24 (cash terms, £ millions)

• Table 4a: Local authority total capital expenditure and total capital receipts by service and category: provisional outturn, England 2022-23 (real terms, £ millions)

• Table 4b: Local authority total capital expenditure and total capital receipts by service and category: forecasted outturn, England 2023-24 (cash terms, £ millions)

• Table 5a: Local authority prudential system information by category: provisional outturn, England 2022-23 (real terms, £ millions)

• Table 5b: Local authority prudential system information by category: forecasted outturn, England 2023-24 (cash terms, £ millions)

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

• Capital Estimates Return, Section A, Part 1 (CER A1), England, 2023-24 Forecasted Outturn: Expenditure, Other Transactions & Receipts

• Capital Estimates Return, Section A, Part 2 (CER A2), England, 2023-24 Forecasted Outturn: Further Details on Expenditure on Grants & Loans and Roads

• Capital Estimates Return, Section B (CER B), England, 2023-24 Forecasted Outturn: Financing Total Capital Expenditure & Other Transactions

• Capital Estimates Return, Section C (CER C), England, 2023-24 Forecasted Outturn: Prudential System Information

All tables and workbooks, as well as related statistical releases, can be accessed at: Local authority capital expenditure, receipts and financing

Local authority level provisional outturn data are available to download alongside this release. This is:

• CPR4 Live Table: Capital Payments and Receipts 4 (CPR4), 2022-23, England

This table can be accessed at: Live tables on local government finance - Capital payments and receipts

6.2 Technical Notes

Please see the accompanying technical notes document for further details. This can be found at: Local authority capital expenditure and receipts in England: 2022 to 2023 provisional outturn and 2023 to 2024 forecast

Information on Official Statistics is available via the UK Statistics Authority website: The UK Statistical System

Information about statistics at DLUHC is available via the Department’s website: Statistics at DLUHC