Local authority capital expenditure and receipts in England: 2021 to 2022 final outturn
Published 10 November 2022
Applies to England
1. In this release:
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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.
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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.
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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).
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Capital receipts totalled £3.5 billion in 2021-22, up £0.9 billion (32.7%) in real terms than in 2020-21.
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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:
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Capital receipts totalled £3.5 billion in 2021-22, up £868.3 million (32.7%) in real terms than in 2020-21.
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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 |
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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
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
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 |
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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
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 |
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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:
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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.
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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.
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Capital receipts are from the sale of capital assets.
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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 |
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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
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.