Council service spending grows by 1.9%

English local authorities’ total service expenditure reached £91.4bn in 2018-19, a 1.9% increase on the previous year and its highest level since 2014-15.
The figures were included in the Local Authority Revenue Expenditure and Financing: 2018-19 Provisional Outturn, England has shown.

Revenue expenditure, which both includes and excludes certain payments and grants additional to service spending, was up by 1.2% at £94.2bn, the highest level since 2015-16.

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Services spending was also up if education is excluded, which the Ministry of Housing, Communities and Local Government said gave a fairer comparison since many schools have moved out of local authority control into the academy sector.

Spending excluding education was £59.2bn in 2018-19, equivalent to 1.0% higher than in 2017-18 when adjusted for inflation, and the highest level in the past five years.

Social care predictably accounted for a large part of increased spending with the adult care spend up by £783m (5.1%) from 2017-18 to £16.1bn last year, while in the same period spending on children’s social care was up by £514m (5.8%) to £9.4 bn.

The most notable decrease in spending came in highways and transportation, from £4.0bn to £3.8bn.

Local authorities’ general fund revenue account reserves increased by £1.75bn to £25.5bn over the year to 31 March 2019.

There was an increase of £1.9bn in non-ringfenced reserves, but £776m of this was accounted for by the Greater London Authority’s earmarking of money to refinance rolling stock for the Elizabeth Line.

Councils’ income from government grants fell by 4.1% to £48.3bn over the year, with the most substantial drop being £270m in the New Homes Bonus, income from which was £942m in 2018-19.

There was though a 7.1% increase in council tax revenue from £29.6m and from business rates retention by 16.3% to £17.5bn

The ministry said the increase in council tax paid was the result of the combination of growth in tax base and in levels of council tax.

Its figures did not include five councils which failed to submit returns in time: Bradford, Epping Forest, Kings Lynn & West Norfolk, Reading and South Cambridgeshire.

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