Research and Analytics

general

CIPFA Capital Expenditure and Treasury Management Statistics


March 2006
Introduction

This publication presents the capital expenditure and debt for individual authorities throughout the United Kingdom, analysed over services, styles of borrowing and debt maturity structure. Local authority debt represents the amount of money local government has, with central government's approval, borrowed in order to finance its capital investment. Subject to certain treasury regulations there is considerable flexibility in the way an authority can choose to fund its borrowing to try and minimise the cost to council tax payers. Local Authority debt funding activities are an important component of the sterling money market.

Grossing Methodology

All figures in the commentary, summary tables and the class totals in the main statistical tables are based on 'grossed' data, that is figures which have been adjusted to compensate for missing data and non-responding authorities. This is intended to give a consistent base to the statistics. In the case of capital expenditure and income for England, missing data have been included from the Office of the Deputy Prime Minister's (ODPM) Capital Outturn Returns (COR) for 2004-05. For the fourth time COR data for individual non-responding authorities have been published in the main statistical tables with the permission of the ODPM and affected authorities.

Debt figures have been 'grossed' using data from the Public Works Loans Board, however these figures are not shown for individual nonresponding authorities in the main statistical tables. For data fields where no alternative data source was available, figures are 'grossed' based on real data percentage increases over 2003-04. Users of the statistics should therefore exercise necessary caution, especially in the case of class totals for Northern Ireland where the response rate was 35%.

Analysis of Capital Expenditure

This year's survey shows that capital payments, grants and advances on a cash basis for all local authorities in England and Wales amounted to 15,732m in 2004-05 compared to 12,512m in 2003-04, an increase of 25.7%. In Scotland there was an increase of 27.3% and in Northern Ireland an increase of 19.3%. Total capital payments, grants and advances on a cash basis for the United Kingdom amounted to 17,476m. The large increases shown for Great Britain are mainly attributable to education, transport and housing, three of the most significant services in terms of capital spending by local authorities (see Figure 1 below). Table 1 compares local authority capital payments, grants and advances over the last five years.

Five year trend in Total Capital Payments, Grants & Advances (on a Cash Basis)
In England, Wales and Scotland, over two thirds of capital expenditure relate to Education, Housing and Highways & Transportation. In Northern Ireland, where different arrangements for local service provision exist, leisure & recreation and refuse services are the main areas of capital expenditure.

Figure 1 shows the analysis of capital expenditure on fixed assets across different services.

Capital Expenditure on Fixed Assets
Capital Financing in 2004-05

Figure 2 shows the analysis of supported and unsupported borrowing for capital expenditure to be resourced by means of credit. This is the first year that this information has been shown and it replaces the Financing of Capital Expenditure section. A simple comparison shows that more of the borrowing in England and Wales is supported, whereas the borrowing in Northern Ireland is completely unsupported.

Analysis of Supported and Unsupported Borrowing for Capital Expenditure to be Resourced by means of Credit
External Debt

The estimated total external debt of all local authorities in the United Kingdom at the 31st March 2005 amounted to 52,262m, an increase of 3.6% over the previous year. In recent years, local authority debt has steadily fallen from 52,131 in 2001 to 50,441 in 2004. However, in 2005 the trend was reversed and the total debt at 31st March 2005 was 131 million higher than the debt for 2001. Table 2 provides an analysis of total external debt over the last five years.

Five year trend in Total External Debt
The Public Works Loans Board continues to be the major source of external debt. Figure 3 provides an analysis of sources of local authority borrowing and illustrates how it has changed over the past five years.

Sources of UK Local Authority External Debt
Over 87% of long term debt in the UK will not mature until at least 2011, as figure 4 demonstrates.

Maturity Structure of Long Term Debt
Investments

Almost 82% of local authority investments, both internally and externally managed, are held in the form of cash deposits with banks and building societies. Other investments are held in deposits with other local authorities, gilt edged stock, other short term deposits and long term investments.

Spread of Approved Investment
Summary Tables

Analysis of Capital Payments, Grants and Receipts
Analysis of Capital Financing in 2004-05
Analysis of Total External Borrowing at 31.3.2005 by Source of Finance
Memorandum Analysis of External Borrowing at 31.3.2005
Approved Investments at 31.3.2005

March 2006

Subscribers, please use the left hand menu and non subscribers click below

CIPFAstats Current Datasets