Accredited official statistics

Local authority capital expenditure and receipts in England: 2025 to 2026 provisional outturn and 2026 to 2027 forecast

Published 18 June 2026

Applies to England

In this release:

• In cash terms, capital expenditure by local authorities in England in 2025-26 provisionally totalled £32.1 billion, £508 million (2%) higher than in 2024-25. In real terms, this £32.1 billion is £514 million (-2%) lower than in 2024-25.

• Housing and highways & transport are the service areas with the greatest expenditure, totalling (£10.8 billion) and (£9.3 billion) respectively in 2025-26. Together they account for 63% of all service expenditure.

• Capital expenditure is forecast to total £32.8 billion in 2026-27. This is £684 million (2%) higher in real terms compared to the 2025-26 provisional outturn.

• Expenditure on housing is forecast to remain the largest service area in 2026-27, at £11.3 billion (34% of total).

• Capital receipts received by local authorities in England in 2025-26 totalled £3.9 billion, £485 million (-11%) lower compared to 2024-25. Capital receipts are forecast to remain broadly stable at £3.9 billion in 2026-27.

• Capital grants were the largest source of financing in 2025-26 at £15.9 billion (47% of total), followed by prudential borrowing at £11.1 billion (33% of total).

• Capital grants are forecast to remain the largest source of financing during 2026-27 at £17.1 billion (49% of total), and prudential borrowing the second largest at £10.7 billion (31% of total).

Release date: 18 June 2026
Date of next release: June 2027
Responsible Statistician: Imogen Johnson-Ormston

Contact: CapitalData@communities.gov.uk
Media enquiries: NewsDesk@communities.gov.uk

1. Introduction

This statistical release presents Accredited Official Statistics on provisional capital expenditure and receipts and capital financing for local authorities in England for April 2025 to March 2026 and forecast capital expenditure and receipts and capital financing for April 2026 to March 2027. All comparisons in this section are in real terms.

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 2025-26 provisional outturn data in this release are derived from Capital payments & receipts 4 (CPR4) returns, while the 2026-27 forecast data are derived from Capital estimates returns (CER). Both sets of returns are collated by the Data, Analysis, Statistics and Surveys (DASS) Division of the Ministry for Housing, Communities and Local Government (MHCLG). All comparisons are in real terms in 2025-26 prices unless otherwise stated. These are calculated with ONS/OBR’s implied GDP (whole economy) deflator, whose latest figures show +3.2% inflation during 2025-26 and +2.0% in 2026-27.

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 2026-27 (SeRCOP) produced by the Chartered Institute of Public Finance and Accountancy (CIPFA).

All 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 Figure 1 and 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 2025-26 provisional outturn data in this publication is based on returns from 407 out of 413 (99%) local authorities in England, with imputed records for all 6 authorities who did not submit data in time for this release. These local authorities are Basingstoke & Deane, Bedford, Cannock Chase, Eastleigh, Hertsmere and Newham. These 6 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 for the 2025-26 financial year, provided to MHCLG in spring 2025. Please see the accompanying technical notes document for further details on the grossing and imputations.

The 2026-27 forecast data is based on valid capital estimates returns from 414 out of 415 (99.8%) local authorities. Only one Local Authority (North York Moors) did not submit data for this publication. The number of authorities is higher than the 413 for the 2025-26 provisional data due to local authority changes which took place 2026. These are outlined below.

Two newly created local authorities:

• Cheshire and Warrington Combined Authority

• Cumbria Combined Authority

1.1 Notes on provisional data

Provisional data is provided to us by LAs shortly following the end of the financial year. This means in many cases it is before accounts are fully finalised. This results in some differences between provisional outturn (included in this release) and final outturn (due to be published in November). In most years, these differences are small in percentage terms. Last year the observed difference was larger. Users should be aware of this and take account of the possibility that final outturn figures may be different (likely higher) than the data at this time suggests.

1.2 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.

Each year, we continue to review and refine this methodology to apply the best adjustments possible. The technical notes accompanying this release set out the exact methodology in more detail.

2. 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 2021-22 to 2026-27, 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 2021-22 to 2026-27 (real terms in 2025-26 prices, £ millions)

Category	Type	2021-22	2022-23	2023-24	2024-25[r]	2025-26	2026-27
Acquisition of land & existing buildings	Forecast (adjusted)	4,837	3,317	1,821	3,015	3,115	2,820
	Outturn	2,479	2,235	2,703	3,173	2,895	[z]
New construction, conversion & renovation	Forecast (adjusted)	21,760	19,223	19,426	20,510	19,335	20,952
	Outturn	19,742	19,513	20,489	20,832	21,488	[z]
Vehicles, plant, furniture & equipment	Forecast (adjusted)	1,990	2,067	1,986	2,053	1,852	2,243
	Outturn	1,851	1,748	1,924	2,066	1,877	[z]
Intangible fixed assets	Forecast (adjusted)	432	437	289	337	372	288
	Outturn	326	335	365	367	384	[z]
Total expenditure on fixed assets	Forecast (adjusted)	29,019	25,043	23,522	25,915	24,674	26,303
	Outturn	24,398	23,831	25,481	26,437	26,643	[z]

Category	Type	2021-22	2022-23	2023-24	2024-25[r]	2025-26	2026-27
Grants, loans or other financial assistance	Forecast (adjusted)	7,861	6,498	6,304	6,096	5,248	6,336
	Outturn	6,264	6,828	6,325	6,038	5,346	[z]
Acquisition of share or loan capital	Forecast (adjusted)	304	289	205	180	151	120
	Outturn	961	532	141	113	85	[z]
Total financial expenditure	Forecast (adjusted)	8,164	6,787	6,509	6,275	5,399	6,456
	Outturn	7,225	7,360	6,466	6,151	5,432	[z]

Category	Type	2021-22	2022-23	2023-24	2024-25[r]	2025-26	2026-27
Total capital expenditure	Forecast (adjusted)	37,183	31,831	30,031	32,191	30,073	32,759
	Outturn	31,624	31,191	31,947	32,589	32,075	[z]
of which GLA [note 1]	Forecast (adjusted)	4,244	4,177	3,437	3,385	3,083	3,720
	Outturn	4,108	4,127	3,732	3,253	4,533	[z]
Payment of LSVT levy	Forecast (adjusted)	0	0	0	0	0	0
	Outturn	4	2	0	0	0	[z]
Expenditure treated as capital by virtue of a Section 16(2)(b) Direction [note 2]	Forecast (adjusted)	211	208	430	461	1,279	1,006
	Outturn	277	917	665	1,063	1,221	[z]
Total capital expenditure & other transactions	Forecast (adjusted)	37,394	32,038	30,461	32,652	31,352	33,765
	Outturn	31,900	32,109	32,613	33,652	33,297	[z]

Category	Type	2021-22	2022-23	2023-24	2024-25[r]	2025-26	2026-27
Total capital receipts	Forecast (adjusted)	2,911	2,760	2,502	3,672	3,438	3,852
	Outturn	4,304	4,847	3,865	4,358	3,873	[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. 2026-27 provisional outturn data will be available in June 2027.

[r] This indicates that a figure has been revised since the previous publication.

2.1 Provisional outturn 2025-26

Local authorities’ provisional capital expenditure in England in 2025-26 totalled £32.1 billion. This is a £514 million (-2%) decrease compared to 2024-25.

New construction, conversion & renovation remained the largest type of capital expenditure, accounting for £21.5 billion (67%) of all capital expenditure in 2025-26.

Total expenditure on fixed assets totalled £26.6 billion in 2025-26, this is a £206 million (1%) increase compared to 2024-25.

This slight increase was driven by increases in new construction, conversion and renovation, which rose (3%). This was counteracted by changes in acquisition of land and existing buildings and vehicles, plant, furniture and equipment (-9% and -9% respectively).

Total financial expenditure totalled £5.4 billion in 2025-26, down £719 million (-12%) from 2024-25.

The main driver of this decrease was grants, loans or other financial assistance, which was lower by £692 million (-11%) than in 2024-25.

Provisional outturn capital receipts totalled £3.9 billion in 2025-26, £485 million (-11%) lower compared to 2024-25.

2.2 Forecast outturn 2026-27

Capital expenditure is forecast to total £32.8 billion during 2026-27. This is £684 million (2%) higher than the 2025-26 provisional outturn of £32.1 billion.

New construction, conversion & renovation is forecast to remain the largest type of capital expenditure, accounting for £21.0 billion (64%) of all capital expenditure in 2026-27.

Total expenditure on fixed assets is forecast to total £26.3 billion in 2026-27, a decrease of £340 million (-1%) from 2025-26.

This is forecast to be primarily driven by expenditure on new construction, conversion & renovation, which is forecast to decrease by £536 million (-2%), but remain the largest category of expenditure on fixed assets.

Total financial expenditure is forecast to total £6.5 billion in 2026-27, up £1.0 billion (19%) from 2025-26.

The main driver of this increase is forecast to be grants, loans or other financial assistance, which is estimated to be £990 million (19%) higher than in 2025-26.

Capital receipts are forecast to total £3.9 billion in 2026-27, broadly the same as 2025-26.

Figure 1 shows the difference between forecast and outturn data for total capital expenditure and total capital receipts since 2021-22. Forecasts are adjusted to factor in consistent over-forecasting 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.

Figure 1: A comparison of adjusted forecast and outturn for total capital expenditure and receipts, England 2021-22 to 2026-27 (real terms in 2025-26 prices, £ billions)

3. Other transactions, Section 16(2)(b)

Section 16(2)(b) of the Local Government Act 2003 allows local authorities to treat certain costs as capital expenditure. This includes Exceptional Financial Support (EFS) which is a mechanism provided to assist local authorities facing severe financial difficulties. £1.3 billion of EFS has been agreed for 2025-26 and £1.7 billion has been agreed in principle for 2026-27. EFS is recorded under Section 16(2)(b) expenditure. Not all local authorities given a capitalisation directive have included this within their capital returns for 2025-65 and 2026-27.

4. Capital expenditure by service area

Table 2 illustrates the pattern of expenditure for the broad categories of services since 2021-22.

Table 2: Local authority capital expenditure & other transactions and capital receipts by service: forecast, provisional and final outturn, England 2021-22 to 2026-27 (real terms in 2025-26 prices, £ millions)

Category	2021-22 Outturn (final)	2022-23 Outturn (final)	2023-24 Outturn (final)	2024-25 Outturn (final)[r]	2025-26 Outturn (provisional)	2026-27 Forecast (adjusted)
Total Education	2,631	2,375	2,591	2,539	2,179	2,278
Total Highways & Transport	9,025	8,433	8,512	8,502	9,321	9,457
of which GLA [note 1]	2,595	2,242	2,012	1,858	2,835	1,523
Total Social Care	426	442	543	589	528	512
Total Public Health	32	44	28	34	36	20
Total Housing	8,839	10,108	10,512	10,773	10,817	11,265
of which London Boroughs [note 2]	3,466	4,248	4,301	4,592	3,957	4,046
of which GLA [note 1]	801	1,335	891	715	1,131	1,570
Total Culture & Related Services	1,561	1,522	1,662	1,822	1,605	1,573
Total Environmental & Regulatory Services	1,105	1,454	1,453	1,392	1,215	1,256
Total Planning & Development Services	2,438	2,222	2,603	2,247	2,249	2,202
Total Digital Infrastructure	279	209	167	127	145	127
Total Police	893	873	897	932	960	935
Total Fire & Rescue Services	197	226	293	321	225	276
Central Services [note 3]	2,265	1,815	1,656	2,219	2,211	2,121
Trading [note 4]	1,935	1,467	1,031	1,091	584	738
All Services Total	31,624	31,191	31,947	32,589	32,075	32,759

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.

[z] Not applicable.

[r] This indicates that a figure has been revised since the previous publication.

4.1 Provisional outturn 2025-26

Expenditure on housing remained relatively stable (less than 1%) from 2024-25, but remained the largest service of capital expenditure in 2025-26, accounting for £10.8 billion (34%) of total capital expenditure.

Highways & transport is the second largest service area. It increased by £819 million (10%) driven by an increase of £977 million in expenditure by GLA.

4.2 Forecast outturn 2026-27

Expenditure on housing is forecast to be the largest service category of capital expenditure in 2026-27, accounting for £11.3 billion (34%) of capital expenditure. Highways & transport is estimated to be the second largest capital expenditure service category with £9.5 billion (29%) total capital expenditure.

Overall capital expenditure is forecast to rise in 2026-27, with expenditure on housing estimated to increase by £448 million (4%) in the same period.

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.

Table 3 shows a breakdown of levels of financing from different sources. These figures do not include financing via Private Finance Initiatives (PFIs). However, in this year’s provisional outturn, GLA reported a large amount of financing from PFIs. The associated expenditure was captured within the capital expenditure data, but the financing is not reported in Table 3. For this reason, there is a larger difference than usual between total financing and total expenditure.

Table 3: Financing of local authority capital expenditure by source: forecast, provisional and final outturn, England 2021-22 to 2026-27 (real terms in 2025-26 prices, £ millions)

Category	2021-22 Outturn (final)	2022-23 Outturn (final)	2023-24 Outturn (final)	2024-25 Outturn (final)[r]	2025-26 Outturn (provisional)	2026-27 Forecast (adjusted)
Total grants used to finance capital expenditure	12,354	12,936	13,772	13,704	15,901	17,134
Grants from central government departments	9,781	10,349	10,965	10,657	13,489	14,516
Grants from European structural & investment funds	62	99	53	4	1	3
Grants from private developers & leaseholders, etc.	1,391	1,440	1,639	1,509	1,413	1,443
Grants from non-departmental public bodies [note 1]	636	804	975	1,368	931	1,063
Grants from the National Lottery	45	47	39	33	17	20
Grants from Local Enterprise Partnerships	440	198	101	134	49	88
Total capital receipts used to finance capital expenditure	2,873	3,198	2,739	3,137	2,377	2,388
Total revenue account resources used to finance capital expenditure	6,002	6,096	5,133	4,966	4,292	4,882
Housing Revenue Account	805	591	502	580	515	683
Major Repairs Reserve	2,199	2,131	2,223	2,103	2,137	2,115
General Fund Revenue Account	2,998	3,374	2,408	2,282	1,640	2,083
Total prudential borrowing [note 2]	10,973	10,605	10,679	11,097	11,095	10,729
Loans & other financial assistance from Local Enterprise partnerships	13	13	37	19	10	18
Other borrowing & credit arrangements not supported by central government	10,960	10,592	10,642	11,079	11,085	10,711
Total resources used to finance capital expenditure & other transactions [notes 3 and 4]	32,201	32,835	32,323	32,904	33,665	35,132

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 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] 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. The amount of intra-local authority payments in forecast data can be notably different in the financing table compared to expenditure data resulting in the financing total (adjusted, excluding double counting) being different to the corresponding total in the expenditure tables.

[note 4] This does not include financing via Private Finance Initiatives (PFIs).

[r] This indicates that a figure has been revised since the previous publication.

5.1 Provisional outturn 2025-26

As shown in Figure 2, capital grants have increased and remain the largest source of financing of capital expenditure in 2025-26, increasing by £2.2 billion (16%) to £15.9 billion compared to 2024-25. This increase was driven by an increase in grants from central government, which increased by £2.8 billion (26%), whilst grants from all other sources saw a decrease. Capital grants make up 47% of all resources used to finance capital expenditure.

Prudential borrowing has decreased as a source of capital expenditure financing in 2025-26, decreasing by £2 million (less than 1%) compared to 2024-25. Prudential borrowing makes up 33% of all resources used to finance capital expenditure.

5.2 Forecast outturn 2026-27

Capital grants are forecast to continue as the largest source of financing of capital expenditure in 2026-27, increasing by £1.2 billion (8%) to £17.1 billion compared to 2025-26.

Prudential borrowing is forecast to continue as the second largest contributor to capital financing at £10.7 billion. However, while capital grants are forecast to rise, prudential borrowing is forecast to decrease by £366 million (-3%). Prudential borrowing is forecast to make up 31% of total resources used to finance capital expenditure. Alongside capital grants, this accounts for 79% of total capital financing.

After falling for the last 3 years, revenue account resources are forecast to rise to £4.9 billion.

Figure 2: Adjusted forecast and actual financing of local authority capital expenditure, England 2021-22 to 2026-27 (real terms in 2025-26 prices, £ billions)

6. Additional information

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 2021-22 to 2026-27 (real terms in 2025-26 prices, £ millions)

• Table 1b: Local authority capital expenditure & other transactions and capital receipts by category: forecast, provisional and final outturn, England 2021-22 to 2026-27 (cash terms, £ millions)

• Table 2a: Local authority capital expenditure by service: forecast, provisional and final outturn, England 2021-22 to 2026-27 (real terms in 2025-26 prices, £ millions)

• Table 2b: Local authority capital expenditure by services: forecast, provisional and final outturn, England 2021-22 to 2026-27 (cash terms, £ millions)

• Table 3a: Financing of local authority capital expenditure & other transactions by source: forecast, provisional and final outturn, England 2021-22 to 2026-27 (real terms in 2025-26 prices, £ millions)

• Table 3b: Financing of local authority capital expenditure by source: forecast, provisional and final outturn, England 2021-22 to 2026-27 (cash terms, £ millions)

• Table 4a: Local authority total capital expenditure and total capital receipts by service and category: provisional outturn, England 2025-26 (real terms in 2025-26 prices, £ millions)

• Table 4b: Local authority total capital expenditure and total capital receipts by service and category: forecasted outturn, England 2026-27 (cash terms, £ millions)

• Table 5a: Local authority prudential system information by category: provisional outturn, England 2025-26 (real terms in 2025-26 prices, £ millions)

• Table 5b: Local authority prudential system information by category: forecasted outturn, England 2026-27 (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, 2026-27 Forecasted Outturn: Expenditure, Other Transactions & Receipts

• Capital estimates return, Section A, Part 2 (CER A2), England, 2026-27 Forecasted Outturn: Further Details on Expenditure on Grants & Loans and Roads

• Capital estimates return, Section B (CER B), England, 2026-27 Forecasted Outturn: Financing Total Capital Expenditure & Other Transactions

• Capital estimates return, Section C (CER C), England, 2026-27 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), 2025-26, England

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

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: 2025 to 2026 provisional outturn and 2026 to 2027 forecast

These statistics are Accredited Official Statistics. This status means that these statistics comply with the highest standards of trustworthiness, quality and public value as set out in the Code of Practice for Statistics and should be labelled ‘Accredited Official Statistics’.

Accredited Official Statistics are called National Statistics in the Statistics and Registration Service Act 2007. These Accredited Official Statistics were independently reviewed by the Office for Statistics Regulation in April 2012.

They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled ‘Accredited Official Statistics’. Our statistical practice is regulated by the Office for Statistics Regulation (OSR). OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics to which all producers of official statistics should adhere. Further information on Accredited Official Statistics can be found at: Accredited Official Statistics

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