Annex C
General fund revenue accountsThis annex gives detailed information about local authority General Fund revenue account expenditure relating to Chapter 3. The information is represented in the same way as it is returned to the Office of the Deputy Prime Minister and, generally, at the same level of detail. It forms the basis of the summary tables in the main part of this publication.
Some notes on the figures in the tables are given in this annex but the more extensive notes, which accompany each form sent to local authorities, have not been reproduced here. The most recent year's forms and notes are available from the ODPM internet site at:
http://www.local.odpm.gov.uk/finance/stats/lgfforms/revenue.htm
Annex C is divided into the following sections:
• Detailed revenue outturn data 2001-02 section C1 - from RO, TSR and SAR forms • Revenue outturn summary and grants 2001-02 section C2 - from RS and RG forms • Revenue account net expenditure summaries 2001-02 section C3 - by region and LA class • Revenue account budget estimates 2003-04 section C4 - from RA and RA(SG) forms • Changes to English local government revenue finance systems section C5
C1 Detailed revenue outturn data
This section gives 2001-02 General Fund Revenue Account and Trading Services Revenue Account outturn information from the Revenue Outturn (RO) returns, divided into the following service groups:
source table Education RO1 C1a Transport RO2 C1b Personal social services RO3 C1c Housing benefit, sports, culture and other RO4 C1d Protective services RO5 C1e Other services RO6 C1f Trading services TSR C1g Subjective analysis SAR C1h
DEFINITIONS OF COLUMN HEADINGS IN REVENUE OUTTURN TABLES
The column headings are standard subjective headings which are defined, subject to ODPM requirements, in accordance with the BVACOP Recommended Standard Subjective Analysis (Section 4 Chapter 6) where full details will be found. Grants inside and outside AEF are not regarded as income and are not included in total income figures (see Table C2b).
Expenditure
Employees - all employees' expenses charged directly to services, including salaries and wages, employers' national insurance and pension contributions, cash allowances, relocation expenses, advertising, training expenses and redundancy payments.
Running Expenses (including joint arrangements) -
i) Premises-related expenses, including repairs, alterations and maintenance of buildings, energy costs, rents, rates, cleaning and expenditure on fixtures and fittings;
ii) Transport-related expenses such as repairs and maintenance and running costs of vehicles, contract hire and operating leases; public transport costs;
iii) Supplies and services, including equipment, furniture, catering, uniforms, stationery, telephone costs, computing, and contributions to provisions;
iv) Transfer payments, including mandatory and discretionary student awards, rent allowances, rent rebates and rate rebates;
v) Support services, including administration buildings, managerial and professional services and democratic processes;
vi) Debt management expenses;
vii) Finance leasing charges, including those for leases on buildings, transport, plant and equipment;
viii) Joint Arrangements - for formal arrangements, payments to the account holder. For informal arrangements, payments to constituent members.
Total Expenditure - the sum of the preceding expenditure columns, sometimes called "gross expenditure". It is rarely used as a measure of revenue expenditure.
Income
Sales - all sales of items other than capital assets, including sales to other local authorities.
Fees and charges (excluding recharges) - includes payments made to local authorities for goods and services and rents (but not including council house rents).
Other income - includes grants received from other local authorities and other bodies, contributions made by other authorities for services provided for the benefit of non residents of the authority, recharges of central administration expenditure, and pension contributions and transfer values in respect of staff belonging to unfunded superannuation schemes (eg Police and Fire Officers). Also includes income from formal and informal joint arrangements. Does not include interest receipts, which are collected as a single figure for all services on the RS return (see Table C2a).
Total income - the sum of the preceding income columns. Also called gross income.
Net current expenditure - total expenditure less total income. Note that this measure is not net of grants, which are a means of financing expenditure but do not reduce it.
Capital charges - limited to depreciation and the interest element calculated using the specified notional percentage.
Net total cost excluding specific grants - net current expenditure plus capital charges is equivalent to net total cost as defined in BVACOP, plus expenditure funded by specific grants.
Table C1a: Revenue outturn - education (RO1) 2001-02
Table C1b: Revenue outturn - transport (RO2) 2001-02
Table C1c: Revenue outturn - personal social services (RO3) 2001-02
Table C1d: Revenue outturn - housing benefit, sports, culture and other (RO4) 2001-02
Table C1e: Revenue outturn - protective services (RO5) 2001-02
Table C1f: Revenue outturn - finance, housing and environmental services (RO6) 2001-02
Table C1g: Trading services revenue account (TSR) 2001-02
Table C1h: Subjective Analysis Return (SAR) (grossed up all England) 2001-02
C2 Revenue outturn summary and grants
Table C2a gives 2001-02 General Fund revenue account outturn information from the Revenue Summary (RS) return. The expenditure recorded on each of the service lines of this return is on the basis of Net Current Expenditure as defined in chapter 3.1.1. The RS return gives a summary of the information collected on individual RO returns as well as a detailed breakdown of income and expenditure not recorded on RO returns, including items, which cannot be allocated to any single service. Table C2c gives a subjective summary of Net Current Expenditure across all the RO returns.
Table C2b gives 2001-02 specific and special grants outturn information from the Revenue Grants (RG) return.
Table C2a: Revenue outturn summary (RS) 2001-02
Table C2b: Specific and special grants outturn (RG) 2001-02
Table C2c: Revenue outturn subjective summary 2001-02
C3 Revenue account net expenditure summaries
Table C3a: Revenue account net expenditure by service and region 2001-02
Table C3b: Revenue account net expenditure by service and region per head 2001-02
Table C3c: Revenue account net expenditure by service and class of authority 2001-02
C4 Revenue account budget estimates
Table C4a gives full details of 2003-04 revenue budgets, from the RA03 return. The estimates are all at outturn prices. Detailed figures for budgeted service expenditure by individual local authorities are available in Finance and General Statistics 2003-04, published by CIPFA.
Table C4b gives 2003-04 specific and special grants budget information from the RA(SG)03 return.
Table C4a: Revenue account budget estimates (RA) 2003-04
Table C4b: Income from specific and special grants - budgets (RA-SG) 2003-04
C5 Changes to English local government revenue finance systems
Before 1900, most of the spending of local bodies was financed locally. With the exception of police forces (which were supported by a 50% Home Office grant) and some primary education grants, there were few grants from central government. Various rates were levied for specific services (eg highway rates, poor rates and school rates) and not all were assessed in the same way. Following the abolition of the separate poor rate in 1929, rates became a single unified tax. By then, sizeable central government grants were being paid to encourage different areas to provide services of a consistent standard. These were usually made for specific purposes, rather than as general (unhypothecated) financial support for local spending.
The position in 1945 Nearly 80% of central government grants were in the form of specific grants. The remaining 20% was an unhypothecated or block grant. Approximately equal amounts obtained from government grants and local rates.
1948 Transfer of responsibility for the setting of rateable values of all properties to the Inland Revenue Valuation Office. Previously, each local authority set its own rateable values, resulting in substantial differences between average rateable values for similar properties in different parts of the country.
1948 Block grant to be paid only to authorities whose means or rate resources were below the national average and renamed 'Exchequer Equalisation Grant'.
1958 Many specific grants replaced by General Grant, a new form of unhypothecated block grant so specific grants accounted for less than 30% of government grants. 'Exchequer Equalisation Grant' renamed 'Rate Deficiency Grant'.
1966 General Grant, Rate Deficiency Grant and specific grants for school meals and milk incorporated into 'Rate Support Grant' (RSG) with three elements: domestic, needs and resources.
1971 Rating revaluation. New rateable values came into effect from April 1972.
1974 Following structural reorganisation, proportions of resources and domestic elements of RSG increased. Needs element paid to upper tier, resources and domestic elements payable to lower tiers. More specific grants incorporated into RSG. About 20% of government grants were specific grants. Ratio of government grants: local rates approximately 17:10.
1981 Needs and resources elements of RSG became Block Grant - payable to both upper and lower tiers - and calculated to penalise high spending authorities for the first time. Its distribution was based on each authority's Grant-Related Expenditure (GRE) as calculated by the Department of the Environment.
1984 Rate limitation (capping) introduced. During the 1980s, the method of grant allocation was adjusted to provide a disincentive to over-spending.
1986 The government published a Green Paper, Paying for Local Government, which considered ways of improving the system.
1989 Non-domestic rating revaluation. New national rating system came into effect from April 1990.
1990 Domestic rates were abolished and community charge (poll tax) and nationally determined uniform non-domestic rate introduced. Revenue support grant replaced rate support grant. Aggregate external finance replaced aggregate exchequer grant (AEG). SSAs replaced GREAs. Ring-fenced housing revenue account introduced. Districts collected RSG for the area and passed a portion of this and of community charge to county councils.
1991 An additional £140 per charge payer was provided in central government support, thereby increasing the proportion of local government spending funded by central government.
1993 Council tax replaced the community charge as the local domestic tax. RSG and non domestic rate entitlements were paid into the General Fund of each billing and major precepting authority rather than into the Collection Fund of billing (formerly charging) authorities.
1998 The White Paper Modern Local Government - In Touch with the People announced a 3-year review programme for Revenue Grant Distribution aimed at improving its fairness and equity.
1999 Pre-announced universal capping limits were discontinued to be replaced with reserve powers, which allowed local authorities budgets to be looked at over more than one year. Non-domestic rating revaluation. New rateable value came into effect from April 2000. Central Support Protection Grant introduced to ensure minimum levels of grant support for billing and precepting authorities.
2000 Modernising Local Government Finance: A Green Paper consulted on options for reform of the revenue grant distribution system.
2001 For authorities with education and social service responsibilities damping of changes in grant support based on the floor and ceiling mechanism instead of through Central Support Protection Grant.
The White Paper Strong Local Leadership - Quality Public Services published in December 2001
2002 A new formula grant distribution system introduced, based on Formula Spending Shares (FSS), instead of SSAs, from 2003-04.
2003 The Local Government Bill 2003 received Royal Assent on 18 September. The Act is a deregulatory measure which includes new borrowing freedoms, expenditure grants designed to allow all authorities more flexibility in the use of existing resources, the introduction of the new small business rate relief, powers to charge for discretionary services, new trading powers, the introduction of Business Improvement Districts, and the introduction of a fixed
10-yearly cycle for council tax revaluation.
Published 12 November 2003
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