Local Government Expenditure And Income In 2018-19

26th February 2020

The Chief Statistician has released figures on local government expenditure and income in 2018-19. These figures provide a comprehensive overview of the financial activity of local government, including revenue expenditure and income; capital expenditure and financing; reserves; debt; and pensions.

Revenue expenditure is the cost of delivering services each year. Net revenue expenditure is calculated as service expenditure minus service income. In 2018-19, net revenue expenditure was £10,250 million, a 1.6% increase from £10,088 million in 2017-18. Education and social work were the services with highest net revenue expenditure, £5,057 million and £3,247 million respectively.

Local authorities use general funding to meet their net revenue expenditure on services and any non-service specific revenue expenditure. In 2018-19, general funding was largely made up of £6,885 million from General Revenue Grant, £2,636 million from Non-Domestic Rates and £2,376 million from council tax.

Capital expenditure is expenditure that creates the buildings and infrastructure necessary to provide services, such as schools and roads. Local authorities incurred £2,977 million of capital expenditure in 2018-19, which was consistent with expenditure of £2,984 million in 2017-18.

Local authorities can finance capital expenditure in a number of ways. In 2018-19 the main sources of capital financing were borrowing (£1,128 million) and Scottish Government general and specific capital grants (£916 million).

Usable reserves are local authorities' surplus income from previous years. This can be used to finance future revenue or capital expenditure. At 31 March 2019, local authorities held £2,546 million of usable reserves, a decrease of 1% from £2,573 million held at 1 April 2018.

When local authorities borrow money or use credit arrangements to finance capital expenditure, a debt is created. Local authorities have to repay debt from future revenues. At 31 March 2019, local authorities had debt of £18,214 million, an increase of 3.8% from £17,551 million at 1 April 2018. In 2018-19, local authorities made debt repayments of £658 million.

Scottish Local Government Finance Statistics (SLGFS) 2018-19 is based on final, audited figures provided by local authorities. See

https://www.gov.scot/publications/scottish-local-government-finance-statistics-slgfs-2018-19/