Local Government Expenditure And Income In 2021-22

28th February 2023

The Chief Statistician has released figures on local government finance in 2021-22.

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.

As they cover the period from 1 April 2021 to 31 March 2022, they also reflect the impacts of the Covid-19 pandemic on local government finance in 2021-22.

Revenue expenditure is the cost of delivering services each year. Local authorities net revenue expenditure in 2021-22 was £11,780 million. Education and Social Work were the services with highest net revenue expenditure, accounting for £5,867 million and £3,817 million respectively.

Capital expenditure is expenditure that creates the buildings and infrastructure necessary to provide services, such as schools and roads. Local authorities incurred £3,341 million of capital expenditure in 2021-22. This was predominantly financed by grants and contributions of £1,402 million and borrowing of £1,441 million.

Usable reserves are local authorities' surplus income from previous years which can be used to finance future revenue or capital expenditure. At 31 March 2022, local authorities held £4,266 million of usable reserves.

When local authorities borrow money or use credit arrangements to finance capital expenditure, a debt is created which has to be repaid from future revenues. In 2021-22, local authorities made debt repayments of £553 million and at 31 March 2022 they had a total debt of £20,549 million.