COR: capital outturn return guidance notes
Updated 5 July 2024
Applies to England
1. Introduction
Version | Date | Change notes |
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1 | 18 January 2021 | Updated links at section 1.3 - relevant legislation and codes of practice. |
2 | 22 May 2023 | Added new guidance in section 1.1 to reflect new sign-off requirements, additional information requested in new section 2.2.2.4 and revised section 3.1 New section 2.2.2.4 added for Local authority trading companies, subsidiaries, associates and joint ventures to detail new information requested under E&R1F of the form. Revised section 3.1 for Grants from central government departments to detail new information requested under FIN1C of the form. |
3 | 26 April 2024 | Order of sections amended to improve flow. New sub-sections added to capture additional requirements within E&R1, E&R1B, E&R1G, and E&R1H. |
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Queries regarding completion of the Capital Outturn Return not resolved by this guidance should be directed to: [email protected].
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Please note the Capital Outturn Return is completed and submitted via an Excel spreadsheet, not DELTA.
Queries should be directed to: [email protected].
1.1 General notes
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The treatment of PFI (Private Finance Initiative) schemes is covered in section 3 (Resources used to finance capital expenditure, other transactions & PFI) but, otherwise, figures should be based on the accounting treatment that will be followed in your published accounts.
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Please note that educational academies are government funded so exclude related capital from this return.
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Expenditure and receipt data requested should be entered against the service categories listed in accordance with the guidance provided by SeRCOP (Service Reporting Code of Practice).
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All figures should be shown/entered as whole, positive thousands (e.g., £9,125.25 should be entered as £9), unless negative figures are specified in the instructions given. It is vital that the data is entered in the requested formats to:
- | prevent the generation of validation errors and queries |
- | increase speed of form completion |
- | increase accuracy of data |
1.1.1 Certification of return
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The Chief Financial Officer, Section 151 Officer or a suitable deputy is required to certify the return. The certification is required to be completed on the cover sheet of the form.
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The certifier must be copied into the email return for the return to be recognised as certified. This must be the same email address which the certifier has entered on the cover page.
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When submitting the return by email, confirmation is required that this declaration has been fully completed by writing ‘CERTIFIED’ at the start of the email subject.
1.2 Requirement for Local Enterprise Partnerships
(LEPs) to be treated as third parties and for the recording of funding to and from LEPs.
Note: From April 2024, the Government’s sponsorship and funding of LEPs will cease. The Government will now support local and combined authorities to take on the functions currently delivered by LEPs. In returns relating to the 24/25 financial year, spend should only be recorded as coming from LEPs where these functions have not yet been transferred to the local authority.
The Capital Outturn Return is a local authority return. As such it should reflect the finances of the local authority for which it is being completed and treat any LEP for which it acts as an accountable body as being a third party.
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This is regardless of whether there is little or no operational distinction between the finances of a local authority and of a LEP for which the local authority acts as the accountable body.
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This treatment of LEPs as separate entities is to be followed because the decisions on what LEP funds are to be spent on are currently made by the LEP and not the local authority. At the present time, it is likely funds received in previous financial years have been spent in the reporting financial year.
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All local authorities should report funding received from any LEP (including notional transactions) in the line ‘Capital Grants from Local Enterprise Partnerships’ in FIN1 (R07).
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Contributions from a local authority to any LEP should be recorded in the expenditure on grants or expenditure on loans or other financial assistance columns in Worksheet E&R1 (C08, C13) and Worksheet E&R1B (C05, C11). It is worth noting that additional detail will be requested in Worksheet E&R1B concerning the data entered in E&R1.
1.3 Accounting standard
The new International Financial Reporting Standard (IFRS) 16 makes significant changes to the reporting of leases abolishing, for lessees, the distinction between finance and operating leases (with very few exceptions). There are consequential impacts on the recording of service expenditure. For lessors, IFRS 16 is similar to IAS17(International Accounting Standards 17) leases. Further information is available at: Local Authority Leasing Briefings.
1.4 Relevant legislation and codes of practice
Local Government Act 2003 (2003 c. 26), hereafter the Act.
References to Regulations are to The Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 (SI2003/3146), as amended.
CIPFA/LASAAC, Code of Practice on Local Authority Accounting in the United Kingdom 2023/24, hereafter the Accounting code.
CIPFA/LASAAC, The Prudential Code for Capital Finance in Local Authorities (2021 Edition), hereafter the Prudential code.
CIPFRA/LASAAC, Service Reporting Code of Practice for Local Authorities 2023/24, hereafter SeRCOP.
1.5 Using this guidance
This guidance contains references to:
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each sheet
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column
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row of the form
as relevant. For example, ‘Worksheet E&R1, C31, R39’. If you know which part of the form you are looking for guidance on, you may make use of search features to look for these references. For example, if you are looking for guidance on completing expenditure on ‘Intangible fixed assets’ within the ‘parking’ service area, this is sheet E&R1 in the form and C07, R07. You could search R07 if you are looking for more detail on ‘parking’ or C07 if you wanted to understand more about the category of ‘Intangible fixed assets’.
At the beginning of each numbered section, you will find a list of the relevant sheets within the form for that section. You will find any general guidance for the whole of a section at the beginning of each main numbered section.
2. Expenditure and receipts
The following worksheets in the Capital Outturn form record the information for this area:
Worksheet name | Areas covered |
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E&R1 | Total capital expenditure, other transactions and total capital receipts |
E&R1A | Further detail on expenditure included in Roads, Street Lighting & Road Safety under New construction, conversion & renovation |
E&R1B | Further detail on Grants & Loans & Other Financial Assistance |
E&R1D | Further detail on social care |
E&R1E | Memorandum item on expenditure treated as capital by virtue of a Section 16(2)(b) Direction |
E&R1F | Local authority trading companies, subsidiaries, associates and joint ventures |
E&R1G | Acquisitions, disposals and impairment costs |
E&R1H | Value of assets, at end of the previous reporting year, March (year end) |
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Capital expenditure is defined as in section 16 of the Act, i.e., expenditure of the authority, which falls to be capitalised in accordance with proper practices but adapted by any Regulations or directions under section 16(2), particularly that under Regulation 25(1)(e). Expenditure adapted under Regulation 25(1)(e) should be included under new construction conversion & renovation.
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Capital receipts are defined in section 9 and Section 10 of the Act.
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Capital expenditure and receipts should be on an accruals basis (amounts of money recorded against the period during which the expense was incurred, even if this was not the period in which it was paid).
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Figures should exclude all negative items representing the reversal of creditors for previous years’ capital expenditure. Any cash payments in respect of previous years’ capital expenditure should also be excluded.
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Negative entries will be accepted if they represent the correction of an error in respect of previous years’ expenditure recognised during the period covered by the form. In this case, we would expect a note of explanation.
Exclude:
- amounts of capitalised interest that arise after an asset is completed or open for public use, e.g., capitalised interest on tolled bridges and tunnels
- expenditure by the common council of the City of London, which is defrayed out of the Bridge House Estates or city’s cash, except when it is expenditure by the common council as a local authority, police authority or port health authority
2.1 Notable inclusions and exclusions
2.1.1 Revenue expenditure funded from capital under statute (RECS or REFCUS)
Revenue expenditure funded from capital under statute (RECS or REFCUS) must be included where appropriate. RECS is expenditure, which is only classed as capital because of regulations and directions made under section 16. If expenditure has been capitalised by regulation, there is no need for it to be capitalised by direction. The table below sets out the categories of capital expenditure created under section 16 of the Act or Regulation 25, either by regulation or by direction. The table shows whether the expenditure is treated in the financial accounts as RECS or not.
Provision | Description | RECS | Not exp |
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Section 16(2) (a) | Expenditure capitalised by regulation | √ | |
- reg 25(1)(a) | Computer programs | √ | |
- reg 25(1)(b) | Grants for capital works | √ | |
- reg 25(1)(b) | Loans and other assistance for capital works | √ | |
- reg 25(1)(c) | Repayment of capital grant | √ | |
- reg 25(1)(d) | Acquisition of share or loan capital | √ | |
- reg 25(1)(e) | Works on others’ property | √ | |
- reg 25(1)(ea) | Assets for others | √ | |
- reg 25(1)(f) | Payment of levy on disposals | √ | |
Section 16(2)(b) | Expenditure capitalised by direction | √ |
2.1.2 Agency arrangements
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In the case of agency arrangements, the authority holding the resource cover should include the expenditure on their forms.
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When an authority undertakes work on behalf of another authority, the sponsoring authority only should show the details on their return.
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All expenditure incurred under agency arrangements should be shown as if it were any ordinary expenditure by the authority and should be included with any other expenditure incurred by the authority.
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Exclude: The cost of work executed by a local authority as the agent of Government department or public utility as well as the receipt of monies to fund this expenditure.
2.1.3 Deferred purchase arrangements
Deferred purchase arrangements entered into on or after 1 April 1990 are credit arrangements and are therefore subject to the normal rules regarding credit cover. However, where deferred purchase arrangements were entered into before 1 April 1990 and are not TCAs Trade and Cooperation Agreement and have not been varied after 1 April 1990 at which time they would have become credit arrangements), then any cash payments by the authority under the arrangements should be included as capital expenditure in the year in which the payments are made. Such payments should be shown on the relevant service line relating to the assets purchased or enhanced.
Similar comments apply to other types of pre-1990 financing arrangements, which, if entered into now, would be credit arrangements.
2.1.4 Leases
Where property, plant and equipment (tangible fixed assets) that have been acquired during the year under a lease or similar arrangement (e.g., hire purchase) are recognised in your accounts, the asset and related capital expenditure should also be disclosed in the relevant section of this return.
2.2 Categories
Worksheets:
Worksheet name | Areas covered |
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E&R1 | Total capital expenditure, other transactions and total capital receipts |
E&R1A | Further detail on expenditure included in Roads, Street Lighting & Road Safety under New construction, conversion & renovation |
E&R1B | Further detail on Grants & Loans & Other Financial Assistance |
E&R1D | Further detail on social care |
E&R1E | Memorandum item on expenditure treated as capital by virtue of a Section 16(2)(b) Direction |
E&R1F | Local authority trading companies, subsidiaries, associates and joint ventures |
E&R1G | Acquisitions, disposals and impairment costs |
E&R1H | Value of assets, as at end of reporting year, March (year end) |
2.2.1 Investment properties
Worksheet E&R1H, R01
These should be reported in line with the definition in IAS40.
2.2.2 Land & existing buildings
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Worksheet E&R1, C01, C21
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Worksheet E&R1G, R01
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Worksheet E&R1H, R02
This category includes but is not limited to:
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dwellings (E&R1G,R02; E&R1H, R03)
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buildings other than dwellings (E&R1G,R03; E&R1H, R04)
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land (E&R1G,R04; E&R1H, R05)
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land improvements (E&R1G, R05; E&R1H, R06)
Acquisition and disposal figures in E&R1G are taken from E&R1.
Breakdown rows should be used to record values associated with the sub-categories listed above. However, as this breakdown is not exhaustive, the total values provided may be greater than the sum of breakdown rows.
The value provided for the acquisition or disposal of dwellings and/or buildings other than dwellings should include the land underneath.
The land category should include only where land on its own has been purchased. Land that comes with existing buildings, e.g., dwellings should be included in that category.
Buildings other than dwellings - examples include:
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public monuments
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warehouse and industrial buildings
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commercial buildings
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buildings for public entertainment
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educational buildings
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health buildings
Examples of land improvements include increased value of land arising from land clearance, land contouring and creation of wells.
2.2.3 New construction, conversion & renovation
Worksheet E&R1, C02
Worksheet E&R1G, R06
In E&R1G this category includes, but is not limited to, the following breakdowns:
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dwellings (R07)
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buildings other than dwellings (R08)
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other structures (R09)
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land improvements (R10)
Breakdown rows should be used to record values associated with the sub-categories listed above. However, as this breakdown is not exhaustive, the total values provided may be greater than the sum of breakdown rows.
2.2.4 Vehicles, plant, furniture & equipment
Worksheet E&R1, C05
Worksheet E&R1G, R16
This category is the sum of vehicles and plant, furniture & equipment and will be calculated in form. See below for further details.
2.2.4.1 Vehicles
Worksheet E&R1, C03, C22
Worksheet E&R1G, R11
Worksheet E&R1H, R07
Disposal figures for this category in E&R1G are taken from E&R1.
2.2.4.2 Plant, furniture & equipment
Worksheet E&R1, C04, C23
Worksheet E&R1G, R12
Worksheet E&R1H, R08
Disposal figures for this category in E&R1G are taken from E&R1.
In E&R1G and E&R1H this category includes, but is not limited to, the following breakdowns:
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plant and machinery (E&R1G,R13; E&R1H, R09)
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IT equipment and hardware (E&R1G,R14; E&R1H, R10)
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furniture and fittings (E&R1G,R15; E&R1H, R11)
Breakdown rows should be used to record values associated with the sub-categories listed above. However, as this breakdown is not exhaustive, the total values provided may be greater than the sum of breakdown rows.
2.2.5 Property, plant & equipment
Worksheet E&R1H, R12, Table 2 R34
This category is defined in line with IAS16. It will be the sum of values provided for investment properties, land & buildings, vehicles, and plant, furniture & machinery.
Table 2 requests a further breakdown of this category and the value in R34 will be populated from the value in R12. These sub-categories reflect those used by HMT for assessing compliance with PWLB.
This category includes but is not limited to:
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for service delivery (R35)
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for housing (R36)
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for economic regeneration (R37)
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for preventative action (R38)
R35 to R38 should be used to record values associated with the sub-categories listed above. However, as this breakdown is not exhaustive, the value provided in R12 and R34 may be greater than the sum of R35 to R38.
2.2.6 Infrastructure assets and other structures
Worksheet E&R1, Table 2, R56, C01; Table 3 R57, C01
Worksheet E&R1G, R25
Examples of other structures may include:
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roads, railways and airfield runways
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bridges, elevated highways, tunnels and subways
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waterways, harbours, dams and other waterworks
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communication and power lines
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local pipelines and cables, ancillary works
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constructions for mining and manufacture
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constructions for sport and recreation
Disposal figures for this category in E&R1G are taken from E&R1.
2.2.7 Community assets (at historic cost)
Worksheet E&R1, Table 2, C02; Table 3 C02
Worksheet E&R1G, Table 2, R26
Worksheet E&R1H, R25
Disposal figures for this category in E&R1G are taken from E&R1.
2.2.8 Tangible heritage assets
Worksheet E&R1, Table 2, C03; Table 3 C03
Worksheet E&R1G, R27
In E&R1G disposal figures for this category are taken from E&R1.
2.2.9 Intangible fixed assets
Worksheet E&R1, Table 1, C06
Worksheet E&R1G, R17
Worksheet E&R1H, R13
Include software licences and other intangible assets, which are required by the Accounting code to be capitalised on the balance sheet. Generally, intangible assets are assets of value, which do not have a physical shape, e.g., purchased franchises, licences and patents.
Exclude Goodwill.
In E&R1G and E&R1H this category includes but is not limited to:
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development expenditure (research and development) (E&R1G, R18; E&R1H, R14)
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purchased software licences and databases (E&R1G, R19; E&R1H, R15)
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internally developed software and databases (E&R1G, R20; E&R1H, R16)
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artistic originals (E&R1G, R21; E&R1H, R17)
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intangible heritage assets (E&R1G, R22, E&R1H, R22)
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goodwill (E&R1G, R23; E&R1H, R18)
Breakdown rows should be used to record values associated with the sub-categories listed above. However, as this breakdown is not exhaustive, the total values provided may be greater than the sum of breakdown rows.
Activity included within development expenditure (or research and development) must be novel, creative, uncertain, systematic and transferrable and/or reproducible.
2.2.10 Heritage assets
Worksheet E&R1H, R21
This category is broken down into:
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intangible heritage assets
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tangible heritage assets
R22-R23 should be used to record values associated with the sub-categories listed above.
2.2.11 Other non-current assets
Worksheet E&R1H, R26
Include here any non-current assets not captured by lines R01-R25.
2.2.12 Grants
Worksheet E&R1, Table 1, C08
Worksheet E&R1B, C01-C08
Covers expenditure under Regulations 25(1) (b) and (c).
Please note that the value in E&R1 C11 (… excluding to local authorities) is determined by the values entered in C09 (Grants) and C10 (… of which to other local authorities).
In E&R1B, C06 and C07 are new columns for the 23/24 return. These columns are completed by a sample of local authorities once every three years. You need only complete these columns if you have been requested to do so.
2.2.12.1 Of which to households
Worksheet E&R1B, C06
The households sector consists of individuals or groups of individuals as consumers and as entrepreneurs producing market goods and non-financial and financial services (market producers) provided that the production of goods and services is not by separate entities treated as quasi-corporations. It also includes individuals or groups of individuals as producers of goods and non-financial services for exclusively own final use (ESA 2010).
Examples of grants under this category include:
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Disabled Facilities Grants
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Household Support Fund
2.2.12.2 Of which to NPISH
Worksheet E&R1B, C07
The non-profit institutions serving households (NPISH) captures institutions that provide goods and services, either for free or below market prices. NPISH income is mainly derived from grants and donations, and they are not controlled by government.
Examples of NPISH would include:
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charities
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non-profit organisations
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research institutes
Please refer to the ONS classification guide for a list of current and former public sector bodies that the ONS has classified.
Examples of grants under this category include:
- Community grants
2.2.13 Loans & other financial assistance
Worksheet E&R1, Table 1, C11
Please note that the value in C13 (… excluding to local authorities) is determined by the values entered in C11 (Loans or other financial assistance) and C12 (… of which to other local authorities).
Exclude mortgages associated with council house sales.
2.2.14 (… of which to other local authorities)
Worksheet E&R1, Table 1, C12, C09
Some columns within the return request an ‘of which to other local authorities’ breakdown. This figure should be a component of the total and therefore cannot exceed the total amount.
Include here any finance provided to the following authority types:
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county councils
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district councils
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metropolitan districts
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unitary authorities
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London boroughs
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combined authorities
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police authorities
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fire and rescue authorities
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waste authorities
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national park authorities
This category should also include any financing received from central government which is passed to another local authority, if the authority receiving the funds from government has agency over the award of these grants.
Exclude: Any funds received from central government where the local authority is acting solely as an agent of government in passing these grants to other local authorities. These instances should not appear within the distributing authority’s return.
2.2.15 Further detail on grants loans and other financial assistance
Worksheet E&R1B, R14
The figures requested are a further breakdown of the figures excluding ‘of which to other local authorities’ from E&R1 (C10 and C13).
This sheet must be a complete breakdown of the related figures from E&R1. This means that C02-C08 must sum to C01 and C10-C14 must sum to C08. This will be ensured as C09 and C14 are calculated from the other values entered.
2.2.16 Acquisition of share or loan capital
Worksheet E&R1, Table 1, C14
Include the cost of entering into or varying credit arrangements, as defined under section 8 of the Act and Regulation 6.
Exclude expenditure, which will be financed by NHS bodies to joint-financed schemes, see 2.3.3.1 for more details.
Exclude Any PFI schemes in the capital expenditure section unless your authority has economic ownership of the asset (i.e., benefits and risk).
Economic ownership for national accounts purposes is determined by the same test as applies under UK accounting standards, the basis of which is set out by International Financial Reporting Standards (IFRS16). Please continue using your existing process if your organisation has not implemented IFRS16. It depends on whether the local authority or the contractor has an asset of the property used to provide the contracted services. A party has an asset of the property where that party has access to the benefits of the property and exposure to the benefits of the property and exposure to the risks inherent in those benefits. Most PFI schemes involve the asset being controlled by the contractor until the end of the agreed period.
Include expenditure on the acquisition of share capital in any body corporate.
2.3 Services
Worksheet E&R1, Table 1, R55
Worksheets:
Worksheet name | Areas covered |
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E&R1 | Total capital expenditure, other transactions and total capital receipts |
E&R1A | Further detail on expenditure included in Roads, Street Lighting & Road Safety under New construction, conversion & renovation |
E&R1B | Further detail on Grants & Loans & Other Financial Assistance |
E&R1D | Further detail on social care |
E&R1E | Memorandum item on expenditure treated as capital by virtue of a Section 16(2)(b) Direction |
E&R1F | Local authority trading companies, subsidiaries, associates and joint ventures |
E&R1G | Acquisitions, disposals and impairment costs |
E&R1H | Value of assets, as at end of reporting year, March (year end) |
2.3.1 Education
Worksheet E&R1, Table 1, R05
This category is the sum of R01-R04.
Include education administration. Schools’ capital expenditure funded by Devolved Formula Capital (DFCG) should be included on the return, where the local education authority runs the schools. Where DFCG has been used by a local education authority to finance joint expenditure, its use should be recorded if it is financing the local authority share of the expenditure.
Expenditure and receipts from the disposal of assets used for provision of school meals, including accommodation, should be shown as appropriate as part of the expenditure/receipts in:
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early years & primary schools
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secondary schools
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special schools & alternative provision
Any educational expenditure for central kitchens or other provision, which is not part of a school, should be apportioned to the institutions serviced
Include any expenditure where the Local Education Authority (LEA) finances capital works to a voluntary aided (VA) school’s assets that is, in substance, a grant given for capital purposes. This is REFCUS and should be included in expenditure and receipts.
If the grant given by the LEA is in turn financed by a central government grant there are two possibilities:
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it remains a capital grant by the LEA and this and the financing of it should be included
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the LEA is merely an agent for central government, passing on the grant money, in which case the expenditure and financing should be excluded
Which alternative applies will depend on whether the LEA effectively takes the decision that the central government money should go to the VA school: if it does, it is the LEA’s expenditure. The LEA will have to make this decision in preparing its accounts.
Exclude: academies are completely outside LA control and related capital should be excluded from the return.
2.3.1.1 Early years & primary schools and secondary schools
Worksheet E&R1, Table 1, R01, R02
Include all capital expenditure and receipts attributable to early years, primary and secondary education.
2.3.1.2 Special schools & alternative provision
Worksheet E&R1, Table 1, R03
Include all capital expenditure on special education – on special units in ordinary schools, as well as on special schools. When primary and secondary school premises are disposed of, no apportionment of the proceeds need be made, even if they contain special units: total receipts should be returned in early years & primary schools or secondary schools as appropriate.
2.3.1.3 Post-16 Provision & other education
Worksheet E&R1, Table 1, R04
Include all expenditure and receipts related to:
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administration and inspection
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child guidance
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community provision charged to education accounts
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adult and community learning
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other services to young people
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other relevant services
All capital expenditure and receipts on higher and further education establishments including agricultural colleges and institutes, and adult education establishments should be entered.
2.3.2 Highways & transport
Worksheet E&R1, Table 1, R13
This category is the sum of R06-R12. The highways & transport section collects data covering the below categories:
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roads, street lighting & road safety
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parking
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public transport (bus)
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public transport (rail & other)
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airports
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ports & piers
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tolled roads, bridges, tunnels, ferries & public transport companies
2.3.2.1 Roads, street lighting and road safety
Worksheet E&R1, Table 1, R06
This category includes the below:
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car parks
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roads (including structural maintenance)
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lighting
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road safety
Include capital expenditure on trunk roads (other than administration) which is not reimbursable.
Expenditure on highways repairs and maintenance should be included, if treated as capital in the authority’s accounts. Local authorities’ own highways expenditure funded by DfT grants should be included.
Include all other expenditure, which is capitalised, including:
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overheads
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appropriate allocation of central departments’ charges
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capitalised professional and technical service costs
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relevant overheads and recharges
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capital expenditure on substantial replacement and improvement of existing street lighting, as well as complete new systems
Lighting in non-highways areas should be included in community safety.
Exclude:
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private streets or other private works
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roads not chargeable to the highways account
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trunk roads (if recoverable), including the cost of participation in road construction units
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all expenditure associated with highway schemes for which the construction costs are reimbursed by 100% grants from the Department for Transport (DfT)
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capital cost of roads built by new town corporations, including works undertaken by county councils on behalf of the corporations
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amounts of interest capitalised, that arise after an asset has opened for public use
2.3.2.1.1 Memorandum item on expenditure included in roads, street lighting & road safety under new construction, conversion & renovation
Worksheet E&R1A, R07
This category is the sum of R01-R06. The total calculated here will be used to populate E&R1 Table 1, C02, R06 (the new construction, conversion & renovation value for roads, street lighting & road safety.
2.3.2.1.1.1 New construction/improvement of roads
Worksheet E&R1A, R01
Include all capitalised expenditure. No attempt should be made to separate out the cost of maintenance elements included within improvement schemes.
Similarly, no attempt should be made to separate out the cost of street lighting contained within new construction/improvement and schemes. Include improvements at sites where there is a road safety problem. Virtual detrunking expenditure should also be included.
2.3.2.1.1.2 Structural maintenance (principal roads)
Worksheet E&R1A, R02
Include all capitalised highway maintenance expenditure on principal roads, except maintenance element within improvement schemes. Include capitalised expenditure on:
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reconstruction
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overlay
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resurfacing
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patching
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surface dressing
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remedial earthworks
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minor repairs
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drainage
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footways and cycle tracks
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fencing, walls and barriers
Resurfacing and other maintenance treatment at sites where there is a road safety problem should also be included.
2.3.2.1.1.3 Structural maintenance (other LA roads)
Worksheet E&R1A, R03
Include all capitalised highway maintenance expenditure on other local authority roads. For detailed exceptions and inclusions, see structural maintenance (principal roads), section 2.3.2.1.1.2.
2.3.2.1.1.4 Expenditure on bridges
Worksheet E&R1A, R04
Include all capitalised expenditure on the maintenance, assessment and strengthening of bridges and other structures. Structures include:
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culverts (over 1.5m span)
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pedestrian subways
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highway tunnels
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noise barriers and retaining walls
2.3.2.1.1.5 Road safety improvements
Worksheet E&R1A, R05
Include capitalised expenditure on traffic calming and other local safety schemes.
Exclude expenditure on junction improvements, drainage and surface treatments which are to be included in new construction/improvement of roads, structural maintenance (principal roads) or structural maintenance (other LA roads).
2.3.2.1.1.6 Street lighting
Worksheet E&R1A, R06
Include the capitalised cost of schemes related to the installation of streetlighting columns. No attempt should be made to separate out the cost of the street lighting element within new construction/improvement road schemes.
Include the cost of installation of footway lighting alongside a carriageway.
Exclude footway lighting in non-highway areas.
2.3.2.2 Parking
Worksheet E&R1, Table 1, R07
Include expenditure and receipts for both off-street and on-street parking including car parks and parking meters. Car parking expenditure authorised by statutes other than the Highways Acts, e.g., car parks in National Parks should be included.
2.3.2.3 Public transport (bus) and public transport (rail & other)
Worksheet E&R1, Table 1, R08, R09
Include direct capital expenditure by an authority, or PTE expenditure on public passenger transport should be entered in acquisition of land & existing buildings, new construction conversion & renovation, vehicles, plant, furniture & equipment or intangible fixed assets as appropriate.
Capital grants and advances, and capital contributions by an authority to Network Rail and other transport operators, should be entered in grants and loans or other financial assistance as appropriate.
2.3.2.4 Airports
Worksheet E&R1, Table 1, R10
Include for those airport undertakings, which have transferred to companies, only capital finance from the controlling authority or private sources should be recorded in grants.
Exclude:
-
acquisition of land & existing buildings
-
new construction conversion & renovation
-
vehicles
-
plant, furniture & equipment
-
intangible fixed assets
For the remaining airport undertakings, only capital expenditure financed by borrowing should be entered.
Only the gross amount of any expenditure on Acquisition of share or loan capital in an authority’s airport company should be included.
Exclude: no other expenditure by airport undertakings or companies is included as public expenditure. All such expenditure should be recorded in Grants.
2.3.2.5 Ports & piers
Worksheet E&R1, Table 1, R11
Include expenditure and receipts from directly owned facilities.
2.3.2.6 Tolled roads, bridges, tunnels, ferries & public transport companies
Worksheet E&R1, Table 1, R12
Include only expenditure on new capital works and expenditure involving some improvement to tolled road bridges, tunnels and ferries should be recorded here.
For public transport companies, only capital finance from the controlling authority recognising a share of assets in their accounts is counted as public expenditure. This expenditure should be recorded in grants or loans & other financial assistance. Any repayments by PTCs should be recorded in repayments of grants, loans & other financial assistance.
Only the gross amount of any expenditure for the acquisition of share or loan capital in an authority’s public transport company should be included. Capital receipts generated by the sale of an authority’s shares in a PTC should be included as disposal of investments (including share or loan capital).
Exclude Expenditure on repair, renewal and maintenance work.
2.3.3 Social care
Worksheet E&R1, Table 1, R14
Include expenditure on both adult social care and children’s social care.
Local authorities should record the expenditure they make in respect of jointly financed schemes.
Exclude Amounts met by expenditure by the health authority.
Contributions from health authorities should not be included in repayments of grants, loans & other financial assistance; instead, it should be included in total capital expenditure on jointly financed schemes, of which health authorities (E&R1D, C03).
Where premises are provided for both educational and social services for children under five, only the expenditure/receipts attributable to social services should be included on this line. The cost attributable to educational services should be included in Early Years & Primary Schools.
2.3.3.1 Memorandum item on jointly financed schemes
Worksheet E&R1D, C02
Contributions from NHS bodies to joint financed schemes should only be included here.
Total contribution from both the authority and the NHS body should be included under Total capital expenditure on jointly financed schemes, while the contribution of the NHS body only should be included under Total capital expenditure on jointly financed schemes, of which contributed by health authorities.
2.3.4 Public health
Worksheet E&R1, Table 1, R15
The public health grant is being provided to give local authorities the funding needed to discharge their new public heath responsibilities. It is vital that these funds are used to:
-
significantly improve the health and wellbeing of local populations
-
carry out health protection functions delegated from the Secretary of State
-
reduce health inequalities across the life course, including within hard-to-reach groups
-
Ensure the provision of population healthcare advice
The grant is administered under Section 31 of the Act and can be used for both revenue purposes and, as Capital Expenditure from Revenue Account (CERA), for certain capital purposes. Local authorities can also record non-Public Health Grant money in this service line, which may not be CERA expenditure. However, if public health grant money is spent, it must be recorded in both the revenue and capital forms as CERA.
While the grant should not be used for interest, service charge payments or finance leases, it can be used for capital spend on items that do not entail borrowing or a finance lease. Capital expenditure should be noted as a capital expenditure from revenue account (CERA) payment on the revenue forms, with details provided on the capital forms.
2.3.5 Housing
Worksheet E&R1, Table 1, R18
This category is the sum of R16 and R17.
Housing receipts should be gross receipts before pooling payments made under Regulation 12 & Regulation 13.
The information provided in this section must be consistent with that submitted in your authority’s Housing Strategy Statistical Appendix (HSSA). This is very important, as any significant inconsistencies will lead to subsequent queries on the data.
Include any expenditure financed by estate action, as well as housing expenditure under other SRB schemes, under the appropriate headings.
Expenditure on Loans & other financial assistance covers loans and advances to self-build groups, under various Housing Acts, and to private persons for council house purchase under the Housing Act 1985.
Any capitalised interest should also be reported here. Include expenditure on travellers’ sites here.
Disposal of tangible fixed assets (C21) covers all receipts (including LSVTs) associated with the sale of council dwellings, both Part II and non-Part II Housing Act 1985 dwellings, and also non-HRA stock (such as under Improvement for Sale and ‘Homesteading’ schemes). Receipts should be recorded net of any discounts, associated administrative costs, including costs of or incidental to a disposal of an interest in housing land under Regulation 23(e), and net of any related mortgage advances by your authority.
Any repayments of discount, i.e., where the former tenant resells the property within three years of purchase, should be included in Disposal of tangible fixed assets (C21).
Regular and any premature payments of principal on mortgage advances and loans under the Housing Acts should be reported under repayments of grants, loans & other financial assistance (C27); this will also include such mortgages repaid prematurely, e.g., refinanced by a building society.
Exclude loans made directly to RSLs by the housing corporation.
2.3.5.1 Housing (HRA)
Worksheet E&R1, Table 1, R16
Section 74 in Part VI of the Local Government and Housing Act 1989 (LGHA1989) requires local authorities that own their own housing stock to keep a ring-fenced HRA. It specifies the major items to be included within the HRA as dwellings and other property (e.g., garages, shops, etc.) provided under Part II of the Housing Act 1985 (HA 1985). Section 75 refers to Schedule 4 of LGHA1989, which specifies the items to be debited Part II of the Housing Act 1985 (HA 1985). and credited Part I to the HRA.
Please include:
-
expenditure on the repair, maintenance and management of HRA property
-
material balances of internal trading operations providing services to the HRA
-
gross costs of services provided to leaseholders within HRA property
Expenditure on repair, maintenance and management should include:
-
spending on the upkeep of HRA property (e.g., repairs and associated costs)
-
running costs of services that only benefit specific groups of tenants (e.g., lifts, shared boilers, stair lighting, caretaking, etc.)
Costs, which are recovered from tenants and leaseholders as service or heating charges, should be recorded under receipts as appropriate.
Authorities are required to charge depreciation and, where applicable, impairment and revaluation losses on all HRA properties in accordance with proper practices.
2.3.5.2 Housing (non-HRA)
Worksheet E&R1, Table 1, R17
Include all non-HRA housing services here.
Renovation and associated grants under the Housing Grants, Construction and Regeneration Act 1996, as well as expenditure under previous legislation; these should be recorded here under Grants.
2.3.6 Total culture & related services
Worksheet E&R1, Table 1, R24
This category is the sum of R19-R23.
2.3.6.1 Culture & heritage
Worksheet E&R1, Table 1, R19
Include expenditure and receipts in respect of:
-
all museums and galleries with permanent or transient collections open to the public
-
museum services and grants to independent museums
-
premises housing archives and records
-
theatres, halls, arts centres etc, covering all local authorities’ premises whose main purpose is for these described functions
-
arts and crafts fairs and other events
-
historic environments such as listed buildings, and monuments and heritage interpretation centres
Exclude: expenditure on any grant or advance to the owner of a historic building insofar as it is met by a grant or advance from the Secretary of State under Section 4 or 6 of the Historic Buildings & Ancient Monuments Act 1953 or Section 10 of the Town and Country Planning (Amendment) Act 1972.
2.3.6.2 Recreation & sport
Worksheet E&R1, Table 1, R20
Include:
-
expenditure and receipts on sports halls and physical recreation centres
-
golf courses
-
playing fields
-
sports grounds
-
swimming pools
-
miscellaneous physical recreation facilities
-
play spaces
-
play/kick about areas
-
equipped playgrounds
-
play parks and centres
-
adventure playgrounds
-
play schemes
Also, include relevant capital grants and contributions to voluntary organisations.
Exclude such facilities charged to the tenants account within the HRA and other similar education schemes.
2.3.6.3 Open spaces
Worksheet E&R1, Table 1, R21
Include:
-
national and county parks and other parks
-
camping and caravan sites
-
picnic areas
-
beaches
-
bridleways and footpaths
Facilities such as tennis courts should be included in recreation & sport even if they are located in parks.
2.3.6.4 Tourism
Worksheet E&R1, Table 1, R22
Include expenditure on tourism here.
Exclude from planning & development Services.
2.3.6.5 Library services
Worksheet E&R1, Table 1, R23
Include expenditure and receipts in respect of public library services.
Exclude agency services for educational establishments, hospital authorities, prisons etc.
2.3.7 Environmental & regulatory services
Worksheet E&R1, Table 1, R39
This category is the sum of R25-R38.
2.3.7.1 Cemeteries, cremation & mortuary
Worksheet E&R1, Table 1, R25
Include expenditure on cemeteries, crematoria and mortuaries here.
Exclude regulatory services (environmental health).
Under the Local Government Act 1972, a parochial church council may decide to close a churchyard and request that a local authority maintain it. The costs of maintaining transferred churchyards should be accounted for here.
2.3.7.2 Coast protection
Worksheet E&R1, Table 1, R26
Include relevant capital expenditure such as expenditure incurred to protect coastal areas against erosion and sea encroachment.
2.3.7.3 Community safety
Worksheet E&R1, Table 1, R27
Include expenditure on community safety that cannot properly be set against some other specific service, e.g., including lighting in non-highway areas, general provision of safety railings etc.
Exclude expenditure that can be set against specific services, which should be allocated accordingly, e.g., security doors or CCTV at schools, should be recorded in the appropriate education line.
2.3.7.4 Flood defence & land drainage
Worksheet E&R1, Table 1, R28
Include defences against flooding and internal drainage levy work.
2.3.7.5 Agriculture & fisheries services
Worksheet E&R1,Table 1, R29
Include only smallholdings administered under the Agriculture Act 1970. Include harbours defined as fishery harbours by section 21 and schedule 4 of the Sea Fish Industry Act 1951. Include markets (horticulture & livestock) and slaughterhouses.
Other ports and harbours should be included in ports & piers.
2.3.7.6 Regulatory services (environmental health)
Worksheet E&R1, Table 1, R30
Include:
-
public conveniences
-
pest control
-
health and safety including asbestos removal
-
noise pollution including ‘action under the Environmental Protection Act 1990 dealing with noise as a statutory nuisance’ and ‘silencing alarms under Clean Neighbourhoods and Environment Act 2005 (costs of work in default which cannot be set as a charge against the property under this legislation)’, and ‘dealing with noise construction sites and noise in the street’
Exclude:
-
expenditure under the Food and Drugs Acts, which should be included in Regulatory Services Trading Standards (R31)
-
expenditure on cemeteries, crematoria and mortuaries, which should be included in cemeteries, cremation & mortuary (R25)
2.3.7.7 Regulatory services (trading standards)
Worksheet E&R1, Table 1, R31
Include expenditure and receipts under the Food Safety Act 1990 and the Drugs Act 2005.
2.3.7.8 Street cleaning (not chargeable to highways)
Worksheet E&R1, Table 1, R32
Include here the capital costs of sweeping and removal of litter from land, litter bins, etc that are required to comply with section 89 of the Environmental Protection Act 1990.
2.3.7.9 Waste collection
Worksheet E&R1, Table 1, R33
Include capital costs of waste collection, such as acquisition and maintenance of the waste collection carts.
Exclude capital costs arising from recycling and treatment of re-usable waste, which should be included under recycling, and from trade waste, which should be included under trade waste.
2.3.7.10 Waste disposal
Worksheet E&R1, Table 1, R34
Include capital costs arising from waste disposal.
Exclude capital costs arising from recycling and treatment of re-usable waste, which should be included in recycling.
2.3.7.11 Trade waste
Worksheet E&R1, Table 1, R35
Include the capital costs associated with trade waste.
2.3.7.12 Recycling
Worksheet E&R1, Table 1, R36
Include the capital costs associated with recycling.
2.3.7.13 Waste minimisation
Worksheet E&R1, Table 1, R37
Include the capital costs of initiatives and actions to encourage the minimisation of waste through the reuse, exchange and shared use of goods. Include any capital costs of initiatives to prevent/reduce waste through consumer purchasing.
Exclude capital costs of recycling, which should be included under Recycling and capital costs of any processes that take raw waste and following treatment reduce its volume, minimising the quantity of waste going to landfill. These capital costs are to be included under waste disposal.
2.3.7.14 Climate change costs
Worksheet E&R1, Table 1, R38
Include the capital costs associated with the Climate Change Act 2008 primarily through waste reduction schemes.
2.3.8 Planning & development services
Worksheet E&R1, Table 1, R40
Include:
-
planning departments’ expenditure on development control
-
building regulations and planning implementation
-
direct expenditure on conservation
-
environmental improvements
-
conversion and commercial development and
-
employment services and derelict land reclamation
Standard rules of capitalisation apply for the renovations and enhancements of buildings and properties.
Exclude expenditure on tourism and travellers’ sites.
2.3.9 Digital infrastructure
Worksheet E&R1, Table 1, R41
Include the passive or non-electrical infrastructure components required for fixed broadband and/or mobile communications. This service should therefore include:
-
ducts and poles. Ducts are the passageways in buildings and underground that are used for communications networks and other purposes.
-
fibre
-
mobile masts or cells
Exclude digital expenditure specifically on local authorities’ own premises.
2.3.10 Police
Worksheet E&R1, Table 1, R42
There should be one return from the PCC (Police and Crime Commissioners) for your area covering the full year, which is based on the PCC’s group accounts including the chief constable’s transactions. Police in the City of London continue unchanged under the City Corporation.
2.3.11 Fire and rescue services
Worksheet E&R1, Table 1, R43
Include capital costs related to the regular fire and rescue services.
2.3.12 Central services
Worksheet E&R1, Table 1, R44
Include expenditure on an authority’s:
-
properties
-
transportation
-
equipment and material that cannot properly be set against some other specific service
-
include expenditure and receipts on coroners and magistrates courts
Also, include:
-
allotments and private street work (capital transactions only)
-
community centres
-
holding accounts
Other than the items listed immediately above, it is expected that expenditure included will be limited to matters of small financial importance which are not provided for elsewhere on the capital forms. Also, include emergency planning not done by fire & rescue services.
Exclude receipts from the sale of vehicles, equipment, etc., which were issued free or on loan, are transmitted direct to the Home Office and should not therefore be shown on this return.
2.3.13 Total trading services
Worksheet E&R1, Table 1, R54
Calculated from the sum of total industrial & commercial Trading (R52) and other trading (R53), including the below:
-
commercial housing (R45)
-
other real estate activities (R46)
-
finance & insurance activity (R47)
-
energy generation & supply (R48)
-
water supply, sewerage & remediation (R49)
-
hospitality & catering (R50)
-
other commercial activity (R51)
-
other trading (R53)
2.3.13.1 Total industrial and commercial trading
Worksheet E&R1, Table 1, R52
This category is the sum of R45-R51 (listed above).
Use the commercial categories where the overriding reason for expenditure is to provide future revenue.
Include all expenditure/receipts in respect of industrial estates. Include corporate property. Transactions under Section 2 of the Local Authorities (Land) Act 1963 and comparable local act provisions should only be included here if it is not possible to include them against specific services, e.g., education or highways & transport.
2.3.13.1.1 Commercial housing
Worksheet E&R1, Table 1, R45
Include expenditure on housing which is to be let or sold at or around market value, unlike housing HRA and housing non-HRA.
2.3.13.1.2 Other real estate activities
Worksheet E&R1, Table 1, R46
Include here any industrial or commercial trading relating to real estate which would not be captured by ‘commercial housing’.
2.3.13.1.3 Finance & insurance activity
Worksheet E&R1, Table 1, R47
This includes financial intermediation services in instances where this is primarily used to provide future revenue.
2.3.13.1.4 Energy generation & supply
Worksheet E&R1, Table 1, R48
Examples include electricity substations, renewable power investment.
2.3.13.1.5 Water supply, sewerage & remediation
Worksheet E&R1, Table 1, R49
This includes collection, treatment and disposal of waste.
2.3.13.1.6 Hospitality & catering
Worksheet E&R1, Table 1, R50
Include civic halls and catering and retail markets. Exclusively horticultural and livestock markets should be included in agricultural & fisheries services (R29).
2.3.13.1.7 Other commercial activity
Worksheet E&R1, Table 1, R51
Include spend on commercial activity not otherwise captured by E&R1 R45-R50.
2.3.13.2 Other trading
Worksheet E&R1, Table 1, R53
Include expenditure/receipts associated with direct labour and service Organisations. Include civic halls and catering and retail markets. Exclusively horticultural and livestock markets should be included in agricultural & fisheries Services (R29).
2.4 Other Transactions
Worksheet E&R1
2.4.1 Payment of LSVT levy
Worksheet E&R1, Table 1, C18
Include payments of LSVT: Large Scale Voluntary Transfer levy under section 136(7) of the Leasehold Reform Housing and Urban Development Act 1993 Please note this section was repealed in 2004.
Where a local authority has entered into a VAT shelter agreement with an RSL and all the amounts are notional and no cash has exchanged hands, the expenditure should not be recorded as a capital receipt. The spending should be shown as Grant and the service as Housing not as payment of LSVT levy. The financing of it should be included in Grants and contributions from private developers & from leaseholders, etc. None of the financing should be recorded as coming from the Housing Revenue Account, Major Repairs Reserve.
2.4.2 Expenditure to be treated as capital expenditure by virtue of a Section16(2)(b) Direction
Worksheet E&R1, Table 1, C19
Include expenditure which does not fall within the definition of expenditure for capital purposes, but which is planned to be treated as such expenditure by a direction made under section 16(2)(b) of the Act. For one off equal pay costs for all employees include all transitional, compensatory and back pay costs related to equal pay claims that have been capitalised under a capitalisation direction.
Exclude All costs that are chargeable to a revenue account, these costs should be included in the appropriate service line in the relevant Revenue return.
2.4.2.1 Memorandum item on Section 16(2)(b) direction expenditure
Worksheet E&R1E
Please record information on:
-
all planned capitalisations
-
equal pay directions
-
pension scheme contributions
-
redundancy costs
-
other (including any capitalised expenditure covered by exceptional, commutation, contaminated land capitalisation directions)
for which you have included financing.
2.4.3 Acquisition
Worksheet E&R1G, C01
Include here any expenditure relating to the acquisition of new assets within the financial year.
2.5 Receipts
Worksheet E&R1 Table 1, C29
Include in-year capital receipts as defined in section 9 and Section 10 of the Act.
Record all capital receipts, such as capital asset purchases/construction, buying company shares, repayment of borrowing or revenue expenditure.
In-year capital receipts should be gross receipts before pooling payments made under Regulation 12 and Regulation 13.
The appropriation of a capital asset from one service to another does not involve the local authority in any capital loss or capital gain. The transfer of the asset should not be recorded in the return. Where there is a transfer of capital cash this should be treated in the same way as a capital receipt from sale of an asset, which is used for the benefit of a service other than the one which owned the asset, i.e., it should be excluded.
Exclude That part of a capital receipt which is payable to a Minister of the Crown arising in respect of an asset, investment, grant or other financial assistance originally acquired or made with the assistance of Exchequer grant or contribution.
2.5.1 Repayments of grants, loans & other financial assistance
Worksheet E&R1, Table 1, C27
As defined in Regulation 7.
Include repayments of principal of loans to Registered Social Landlords. Include receipts from repayment of equity loans made under the Starter Home Initiative(SHI) when the property is sold.
Exclude major repairs allowances, Section 106 monies or lottery grants etc.
2.5.2 Disposal of investments (including share or loan capital)
Worksheet E&R1, Table 1, C28
Include receipts from any disposal of share and loan capital in any body corporate, which ranks as a capital receipt Regulation 7 in respect of bonds).
2.5.3 Total capital receipts, of which to be paid to the Secretary of State
Worksheet E&R1, Table 1, C32
Include the gross amount of housing capital receipts (included in Housing)expected to be paid to the Secretary of State under Regulation 12 and Regulation 13.
2.6 Impairment costs
Worksheet E&R1G, C03
Include here any depreciation in the value of assets classified as a permanent reduction in its value.
2.7 Transfers
Worksheet E&R1G, C04
Include here any loss of assets that have been transferred from the local authority to another organisation.
2.8 Revaluations
Worksheet E&R1G, C05
Include here the cumulative increase or decrease across all assets in that line due to changes in their value. This figure may be negative if there has been an overall decrease in the value of assets.
2.9 Value of assets
Worksheet E&R1H
Information on current and non-current assets should be provided in accordance with accounting requirements used in preparation of the annual Statement of Accounts.
Value of assets should be recorded as net values (i.e., minus depreciation).
2.9.1 Assets held by the local authority directly
Worksheet E&R1H, C01
This includes any assets held by the local authority itself.
2.9.2 Assets held in local authority trading companies
Worksheet E&R1H, C02
Include assets held in trading companies owned 100% by the local authority. Trading companies are defined in IAS27.
Exclude: assets held in trading companies in which the local authority has a share of ownership less than 100%.
2.9.3 Assets held in subsidiaries
Worksheet E&R1H, C03
Include assets held in local authority subsidiaries as defined in IAS27.
2.10 Local authority trading companies, subsidiaries, associates and joint ventures
Worksheet E&R1F
Local authority trading companies, subsidiaries, associates and joint ventures should be categorised according to IAS27 and IAS 28
The standard industrial classification of economic activities codes (SIC codes) should be used to classify the nature of the business.
Please record information on all those local authority trading companies, subsidiaries, associates and joint ventures where the local authority holds a share of the organisation as at 31 March in E&R1F. This should include:
-
the full company name
-
sector classification
-
average number of employees during the financial year
-
the organisation’s annual turnover as at 31 March
-
the sum total of the fixed and current assets as at 31 March
-
the authority’s percentage ownership of the organisation as at 31 March
All monetary figures should be shown as whole, positive thousands.
Percentages should be shown as whole positive values, such as 9 rather than 0.09 to represent 9%.
3. Resources used to finance capital expenditure, other transactions and PFI
Worksheet FIN1, R23
Recorded in the following worksheets:
-
FIN1 Resources used to finance capital expenditure, other transactions & PFI
-
FIN1A Further detail on grants from private developers, leaseholders, etc
-
FIN1B Developer contributions in respect of Housing Infrastructure Grant expenditure
-
FIN1C Grants from central government used to finance capital expenditure
3.1 Total grants used to finance capital expenditure
Worksheet FIN1, R09
This category is the sum of R01-R08.
3.1.1 Grants from central government departments
Worksheet FIN1, R01
Include capital expenditure to be financed by capital grants from all central government departments. A list of all central government departments is available on gov.uk under the headings ‘Ministerial departments’ and ‘Non-ministerial departments’.
Exclude:
-
capital expenditure to be financed by the Major Repairs Reserve (MRR), which should be included in Major Repairs Reserve
-
Public Works Loan Board (PWLB) loans which should be included within borrowing and credit arrangements not supported by central government (other category)
-
expenditure to be financed by any other government agency, this should be captured under ‘Grants from non-departmental public bodies (R04). See section 3.1.4 for further details.
3.1.1.1 Further detail on grants from central government departments
Worksheet FIN1C
Please record information on all grants from central government used to finance capital expenditure in the reporting year.
The total value of grants reported (R42) should be equal to the value provided in FIN1C, R01, C01.
The grant issuer should be the name of the central government department who issued the grant. A list of all central government departments is available on gov.uk under the headings ‘Ministerial departments’ and ‘Non-ministerial departments’.
The ‘total grant’ column should reflect the total value used to finance capital expenditure in the current reporting year.
All monetary figures should be shown as whole, positive thousands.
3.1.2 Grants from European Structural & Investment Funds
Worksheet FIN1, R02
Include contributions from any of the European Structural or Investment Funds,
3.1.3 Grants from Private Developers & Leaseholders, etc
Worksheet FIN1, R03
The value here for C01 will be populated using the total value provided in FIN1A, R05, C01.
Include contributions from private developers. Include leaseholder contributions made specifically towards the cost of capital works on the premises of which the leaseholder’s property forms part.
Exclude Funding received from other local authorities, which should be included in Grants from other local authorities.
3.1.3.1 Memorandum Item on grants from private developers & leaseholders, etc.
Worksheet FIN1A, R05
This Memo item captures the section 106 and community infrastructure levy (CIL) payments made to finance capital expenditure.
3.1.3.1.1 Section 106
Worksheet FIN1A R01, R02
Planning obligations (also known as Section 106 agreements) are used by a local authority to mitigate adverse impacts of development by securing contributions, services, infrastructure and amenities to facilitate a proposed development. They can also restrict the development or use of the land in a specified way or require specific operations or activities to be carried out on the land. These came into force through the Town and Country Planning Act 1990 and were reviewed under the Growth and Infrastructure Act 2013.
3.1.3.1.2 Community infrastructure levy
Worksheet FIN1A R03
The Community Infrastructure Levy came into force in April 2010, under the Community Infrastructure Levy Regulations 2010. This levy is used to raise funds from developers undertaking new building projects in their area. The money can be used to fund a wide range of infrastructure that is needed as a result of development. This includes:
-
new or safer road schemes
-
flood defences
-
schools
-
hospitals and other health and social care facilities
-
park improvements
-
green spaces
-
leisure centres
3.1.3.1.3 Developer contributions in respect of Housing Infrastructure Fund grant expenditure
Worksheet FIN1A, R06; FIN1B
Please record receipts from developers that relate to the Housing Infrastructure Fund and subsequent use of these funds.
####3.1.4 Grants from Non-Departmental Public Bodies
Worksheet FIN1, R04
Include capital grants from all non-departmental public bodies (available here under the heading ‘Agencies and other public bodies’) such as the below:
3.1.5 Grants from the National Lottery
Worksheet FIN1, R05
3.1.6 Grants from GLA bodies
Worksheet FIN1, R06
Include capital funding from the Greater London Authority (GLA), including capital funding from the GLA’s five functional bodies:
-
Transport for London (TFL)
-
London Legacy Development Corporation (LLDC)
-
Old Oak and Park Royal Development Corporation (OPDC)
-
The Mayor’s Office for Policing (MOPC)
-
London Fire Commissioner
3.1.7 Grants from Local Enterprise Partnerships
Worksheet FIN1, R07
If a LEP pays a grant to a local authority, record it here. The finances of Local Enterprise Partnerships are to be treated as a third party, regardless of whether a local authority acts as an accountable body for the LEP. This is because decisions about a LEP’s expenditure are made by the LEP and not by the local authority.
As of April 2024, the government is withdrawing central government support (core funding) for Local Enterprise Partnerships and transferring their functions to local and combined authorities. If LEP grants from previous financial years are used to finance capital expenditure in the current year, they should still be recorded against this line.
Exclude: LEP managing authorities should exclude any grants that your local authority has received from another source (e.g., the MHCLG (Ministry of Housing, Communities and Local Government) Growth Fund) on behalf of your LEP.
3.1.8 Grants from other local authorities
Worksheet FIN1, R08
This should include any grants received directly from local authorities. Grants from central government which come via another local authority should also be captured in this line when the distributing authority has agency over this allocation.
Exclude: Grants from other local authorities where the distributing LA is acting solely as an agent of government. In these instances, record the grant under grants from central government departments (R01).
3.2 Total capital receipts used to finance capital expenditure
Worksheet FIN1, R10
Include all capital expenditure to be financed by applying capital receipts.
Exclude: Capital receipts applied to make payments to the Secretary of State under Regulation 12 & Regulation 13.
3.3 Total revenue account resources used to finance capital expenditure
Worksheet FIN1, R14
This category is the sum of R11-R13.
3.3.1 Housing Revenue Account
Worksheet FIN1, R11
Include here financing of HRA capital expenditure which comes directly from the HRA. This figure only needs to be populated in C02. The value here will be used to populate C01.
Exclude financing from MRR (captured in the line below).
3.3.2 Major Repairs Reserve
Worksheet FIN1, R12
Include any debits in respect of capital expenditure incurred met by payments out of the MRR for any land, house or other property to which section 74(1) of the 1989 Act applies.
Include here financing of HRA capital expenditure which comes from the Major Repairs Reserve. This figure only needs to be populated in C02. The value here will be used to populate C01.
Exclude: Expenditure for the purpose of demolition.
3.3.3 General fund revenue account
Worksheet FIN1, R13
This line should match the sum of fields RA865 and RA866 from the DELTA General Fund Revenue Account return.
3.4 Total borrowing & credit arrangements not supported by central government (excluding PFI)
Worksheet FIN1, R19
This category is the sum of R15-R18.
3.4.1 Loans & other financial assistance from GLA bodies
Worksheet FIN1, R15
This line is only applicable for London boroughs and GLA.
3.4.2 Loans & other financial assistance from Local Enterprise Partnerships
Worksheet FIN1, R16
The finances of Local Enterprise Partnerships are to be treated as a third party, regardless of whether a local authority acts as an accountable body for the LEP. This is because decisions about a LEP’s expenditure are made by the LEP and not by the local authority.
From April 2024, central government support (core funding) for LEPs will be removed and their functions will be transferred to local authorities. Spend should only be captured in this line if it continues to be delivered by LEPs during this transition period.
3.4.3 Loans & other financial assistance from other local authorities
Worksheet FIN1, R17
This should include any loans or other financial assistance received directly from other local authorities. Financing supported by central government which comes via another local authority should also be captured in this line.
3.4.4 Other borrowing & credit arrangements not supported by central government
Worksheet FIN1, R18
Include other capital expenditure to be financed by borrowing and other credit that will not attract central government support through either supported capital expenditure (Revenue) known as SCE(R) or supported capital expenditure (capital grant) known as SCE(C). Include any PWLB and PFI transactions which are on balance sheet. Authorities should refer to section 4.3 of the Accounting code.
Exclude Finance from LEPs and other local authorities including combined authorities.
3.5 On balance sheet PFI financing
Worksheet FIN1, R21
Authorities should refer to section 4.3 of the Accounting code.
This is only required in respect of PFI schemes being recognised in the accounts for the first time in the year. The PFI schemes are to be shown at the value of the asset initially recognised in the balance sheet. If no further addition to the asset has been made in year, then there should be no further recognition of the asset either on the balance sheet or in the capital return. Only additional capital enhancement would require inclusion. Debt on the relevant payment and maintenance of the asset should be recorded on the revenue expenditure forms.
4. Prudential system information
Recorded in the following worksheets:
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PRU1 – Capital financing requirement
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PRU2 - Borrowing, credit & investment + operational boundary & authorised limit
4.1 Capital financing requirement
Worksheet PRU1
Charges attributed to on balance sheet PFI projects should be included in capital finance requirements.
Please note that the capital financing requirement now needs to be recorded on an International Financial Reporting Standard (IFRS) balance sheet basis. Authorities should refer to section 4.3 of the Accounting code.
Please note that the opening and closing figures should exclude any amount that relates to accrued interest or other items.
4.1.1 Capital financing requirement as at 1 April
Worksheet PRU1, R02
This should be the authority’s capital financing requirement as defined in para 60 of the Prudential code. It should reflect the amount of expenditure accrued but not defrayed as at the end of the previous financial year, for which an existing resource (e.g., application of capital receipts, direct charge to revenue, application of a capital grant, etc.) as a source of financing will have not been applied. Please note a warning will be generated if R02 does not equal the value as at 31 March from the previous year end (R01).
4.1.2 Expenditure financed by other borrowing and credit arrangements
Worksheet PRU1, R03, this category is the value from FIN1, R22
This is the amount of capital expenditure to be financed by borrowing or other credit arrangements, irrespective of whether that expenditure attracts central government support or not. It is the sum of Loans & other financial assistance from Local Enterprise partnerships, Loans & other financial assistance from other local authorities, Other borrowing & credit arrangements not supported by central government, and On balance sheet PFI financing.
This figure will be equal to the value provided in FIN1 C01, R22 and will be automatically populated using that value entered in FIN1.
4.1.3 Contribution from revenue, MRR, or use of receipts to repay credit liabilities
Worksheet PRU1, R10
Include:
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expected Minimum Revenue Provision (MRP) as required by Regulation 27 (1) (a).
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any additional voluntary contributions under Regulation 27(1)(b) in respect of prior financial years.
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any amount debited to the MRR in respect of the repayment of the principal of any amount borrowed or to meet any liability in respect of credit arrangements in accordance with Regulations 7(5)(c) & (d) of the Accounts and Audit (England) Regulations 2011.
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any capital receipts used to repay principal of any amount borrowed or to meet any liability in respect of credit arrangements, as authorised in Regulation 23(b) and 23(d).
Exclude: any capital receipts used to finance capital expenditure.
4.1.3.1 Minimum Revenue Provision
Worksheet PRU1, R04
Charges attributed to on balance sheet PFI projects should be included in capital finance requirements.
4.1.4 Change in Capital Financing Requirement
Worksheet PRU1, R11 (R03 - R10)
This is the “total borrowing and credit arrangement not supported by central government (excluding PFI)” value (R03) less the total contribution from revenue, MRR, or use of receipts to repay credit liabilities (R10) value. Both are prepopulated cells.
4.1.5 Capital Financing Requirement as at 31 March
Worksheet PRU1, R12 (R02 + R11)
This should be the authority’s capital financing requirement as at the beginning of the reporting financial year (R02) plus change in capital financing requirement (R11). It should therefore represent the authority’s capital financing requirement at the end of the financial year as defined in para 67 of the Prudential code.
Please note that the opening and closing figures should exclude any amount that relates to accrued interest or other items.
4.2 HRA Capital Financing Requirement
Worksheet PRU1, C02
The figures shown here are part of the figures included under Capital Financing Requirement. The HRA Capital Financing Requirement is calculated in accordance with Annex A to the Limits on Indebtedness Determination 2012, as amended by the Amending Determination 2013.
4.2.1 Contribution from MRR
Worksheet PRU1, R07
Include debits in respect of any repayment, made of the principal of any amount borrowed where the repayment was met by payment out of the MRR and debits in respect of the meeting of any liability for capital expenditure, in respect of credit arrangements, where the meeting of that liability was met by payment out of the MRR.
4.2.2 Adjustments for land and capital receipts crossing HRA boundary
Worksheet PRU1, R09
Include the adjustments required by the Limits on Indebtedness Determination (as amended) in respect of:
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(positive) dwellings or housing land that began to be accounted for within the HRA for reasons other than acquisition by the local authority
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(negative) dwellings or housing land that ceased to be accounted for within the HRA for reasons other than disposal by the local authority
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(negative) certain housing capital receipts used to meet capital expenditure on assets not accounted for in the HRA or for certain, other purposes specified in the Determination
4.3 Borrowing, credit and investments
Worksheet PRU2
4.3.1 Gross borrowing
Worksheet PRU2, Table 1, R01
This should be the level of gross borrowing as at 1 April and the level of gross borrowing as at 31 March. Borrowing is defined in para 88 of the Prudential code. This is the unadjusted principal amount of all outstanding external borrowing. As such, you should include:
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all external borrowing by your local authority, both temporary and longer-term, for any purpose. When repayments are made, please deduct these from the principal and report the outstanding amounts.
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all external borrowing in consortium with or on behalf of another authority or authorities. Where authorities borrow as a consortium, the lead authority should include the total amount under gross borrowing and the on-lent amount under investments. Other authorities in the consortium should report their share in borrowing. Similarly, borrowing on behalf of other authorities should be shown as both borrowing and investment.
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All external borrowing in consortium with or on behalf of non-local government sector parties. As with borrowing with or for another authority or authorities, you should include the total amount under gross borrowing and the on-lent amount under investments.
You should exclude:
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any accounting adjustments, such as premiums and discounts,
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transactions costs, amortisation, fair value, accrued interest and effective interest rate adjustments.
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any internal borrowing, such as:
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billing authorities internal borrowing and lending between the General Fund and the Collection Fund.
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internal debt and repayments.
Advances and repayments under the Housing Act 1985 (Home Improvement grants etc) are not regarded as external. These should not be recorded on the form.
Total borrowing as at 31 March reported in the borrowing and lending inquiries (Quarterly Borrowing 4, Monthly Borrowing 12) should match total borrowing as at 31 March in the capital collections (Capital Outturn Return (PRU2, C04) Capital Payments & Receipts 4).
Estimates for borrowing for current and future years should be calculated in the same manner.
Please see Guidance Notes: Borrowing & Lending Inquiry for more details.
4.3.2 Other long-term liabilities
Worksheet PRU2, Table 1, R02
This should be the level of other long-term liabilities as at 1 April and the level of other long-term liabilities as at 31 March. Other long-term liabilities are as defined in para 97 of the Prudential code.
Include only the principal amount of borrowing.
Liabilities relating to PFI schemes should be included.
Exclude: The borrowing of local authority companies. This should be recorded in gross borrowing and other long-term liabilities of local authority companies.
4.3.3 Investments
Worksheet PRU2, Table 1, R04
This should be the level of investments as at 1 April and the level of investments as at 31 March. Investments are defined in in para 70 of the Prudential code. This is the unadjusted principal amount of all outstanding external investment. As such, you should include:
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all external investments made by your authority, both short and longer-term, for any purpose
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all current and deposit accounts as well as overnight or longer-term deposits made with banks through the money markets
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all stocks, bonds, mortgages, equities, debentures, holdings of shares in wholly owned companies, airports etc
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all local authority funds and reserves, including those managed externally
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all external investments made in consortium with or on behalf of another authority or authorities. Where authorities invest as a consortium, the lead authority should include the total amount under investments and the contribution of other authorities under gross borrowing. Other authorities in the consortium should include their contribution in investments. Similarly, investments on behalf of other authorities should be shown as both investments and borrowing
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all external investments made in consortium with or on behalf of non-local government sector parties. As with investments with or for another authority or authorities, you should include the total amount under investments and the contribution of other parties under gross borrowing
You should exclude:
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any accounting adjustments, such as premiums and discounts
-
transactions costs
-
amortisation,
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fair value, accrued interest and effective interest rate adjustments.
Impairments – where an event occurs making it likely that an impairment will be recognised in relation to an investment, then the full amount of the investment should be recorded. Do not deduct any prospective or actual impairment. The outstanding amount should continue to be recorded until such time as a final settlement is made. At this time, please make a note on the form stating the amounts involved and the impairment or unrecoverable amount.
Total investments as at 31 March reported in the borrowing and lending inquiries (Quarterly Borrowing 4, Monthly Borrowing 12) should match total investments as at 31 March in the capital collections (Capital Outturn Return, Capital Payments & Receipts 4).
Estimates for investments for current and future years should be calculated in the same manner.
Please see Guidance Notes: Borrowing & Lending Inquiry for more details.
4.3.4 Use of receipts to repay credit liabilities
Worksheet PRU1, R08
Disclose any capital receipts used to repay principal of any amount borrowed or to meet any liability in respect of credit arrangements, as authorised in Regulation 23(b) and 23(d).
Include any receipts used to repay a premium charged in relation to any amount borrowed, as authorised in regulation 23 (c). If receipts have not been used under regulation 23(c) then the amount should equal use of receipt and repayment credit liabilities in capital finance requirement.
4.4 Operational boundary and authorised limit
Worksheet PRU2, Table 2
4.4.1 Operational boundary for external debt
Worksheet PRU2, Table 2, R01
This should be the authority’s operational boundary for external debt as at 1 April and as at 31 March, as defined in para 62 of the Prudential code.
The Operational Boundary for External Debt (Table 2, R01) must be greater than or equal to the sum of Gross borrowing (Table 1, R01) and Other long-term liabilities (Table 1, R02) and less than or equal to the Authorised limit for external debt (Table 2, R02).
4.4.2 Authorised limit for external debt
Worksheet PRU2, Table 2, R02
This should be the authority’s authorised limit for external debt as at 1 April and as at 31 March, as defined in para 61 of the Prudential code.
The Authorised limit for external debt (Table 2, R02) should be greater than or equal to the Operational boundary for external debt (Table 2, R01).
5. Major repairs reserve and Capital Receipts Reserve
Worksheet MRR; REC
5.1 Accumulated/Capital Receipts
Worksheet REC
5.1.1 Capital receipts reserve as at 1 April of the reporting year
Worksheet REC, R02, C01
Include amounts that are legally capital receipts and unapplied capital receipts brought forward, which have been generated prior to 1 April 2011. The starting position should match the closing position from the previous year (provided in R01, taken from the previous years’ COR submission).
5.1.2 Use of capital receipts to finance Equal Pay (Section 16(2)(b) directions not given or not used)
Worksheet REC, R06, C01
Disclose the back-pay awards financed from capital receipts by virtue of (Regulation 23(e).
Note: In this case, the expenditure is not treated as capital expenditure. It remains revenue expenditure but can lawfully be met from capital receipts.
5.1.3 Receipts used as provision to repay debt or meet liabilities
Worksheet REC, R07, C01
This value is populated using the figure provided in worksheet PRU1, R08. Please see section 4.3.4 for further information.
5.1.4 Pooling of housing capital receipts
Worksheet REC, R08, C01
Include capital receipts applied to make payments to the Secretary of State under regulations 23(f) and 12.
5.1.5 Interest on late pooling payments
Worksheet REC, R09, C01
Include capital receipts applied to make payments to the Secretary of State under regulations 23(f) and 13.
Capital receipts are defined in sections 9 to 10 of the Act. Capital receipts from the disposal of a mortgage portfolio should be included.
Exclude: Notional capital receipts under section 10 and regulation 22 of the Act. Where a local authority has entered into a VAT shelter agreement with a Registered Social Landlord and all the amounts are notional and no cash has exchanged hands, the expenditure should not be recorded as a capital receipt but instead as a grant.
5.2 Major Repairs Reserve
Worksheet MRR
5.2.1 Credits - HRA depreciation for year
Worksheet MRR, R03
Include credits of any amounts in respect of any charges for depreciation included in the HRA under item 8 of Schedule 4, Part 2 to the 1989 Local Government and Housing Act.
5.2.2 Credits – Transfers from HRA required or permitted by item 8 – HRA determination
Worksheet MRR, R04
This relates to decent homes backlog funding credited to the HRA. Include transfer to the credit of the MRR required by the Item 8 determination in respect of decent homes funding credited to the HRA and any voluntary transfers from the HRA to MRR permitted by the Item 8 Determination.
5.2.3 Flexible Use of Capital Receipts
Worksheet REC, R05
Include receipts to be used for revenue expenditure. The 2015 Spending Review gave local authorities the right to use capital receipts on the revenue costs of reform projects and improving service delivery.
Detailed guidance on the types of projects that qualify for this are provided here: Guidance on flexible use of capital receipts.
This figure should be equal to the sum of the figures entered for your organisation in the General Fund Revenue Account form (completed on DELTA) in cells RA867 (Capital receipts used to finance revenue expenditure under receipts flexibility), although it will not match for local authorities where cell RA868 (expenditure capitalised by a direction under Section 16(2)b) is not zero.
If your plans change during the financial year, and the local authority chooses to utilise the flexibility of capital receipts they need to inform MHCLG of these changes as soon as possible, by emailing: [email protected].
5.2.4 Debits – Capital expenditure financed by the MRR
Worksheet MRR, R06
This value is populated using the figure provided in worksheet FIN1, R12. Please see section 3.3.2 for further information.
5.2.5 Debits – MRR used to repay HRA CFR
Worksheet MRR, R07
This value is populated using the figure provided in worksheet PRU1, R07. Please see section 4.2.1 for further information.
5.2.6 Debits – Transfers to HRA permitted by item 8 – HRA determination
Worksheet MRR, R08
Include any transfers debited to the MRR permitted by the Item 8 Determination in respect of impairment on dwellings or the difference between depreciation on dwellings and MRA.