Local Authority Finance: Core Spending Power (FIN_07_59)

Summary

The Core Spending Power indicator describes the available revenue for each Lower Tier Local Authority in England to fund service delivery. It sets out the money that has been made available to local government through the Local Government Finance Settlement.

Technical description

The Core Spending Power figures are derived from the sum of various core funding components, such as the Settlement Funding Assessment, the Council Tax Requirement and other specific grants. For more details see the explanatory note published by the Ministry of Housing, Communities & Local Government (see data sources in technical description). Due to regular changes to local authority duties and reporting arrangements since 2010-11, we adjusted the data to allow comparisons over time. For this we exclude Public Health Grant, the Better Care Fund and other NHS health transfers from our analysis of spending power, but added any Transitions Grants for that year. For consistency, we also removed any spending power regarding “other” authorities, such as Police and Fire Authorities, or the Greater London Authority. Spending figures of Lower Tier Local Authorities include the disaggregated spending power of Upper Tier Local Authorities to the nested Lower Tier Local Authorities by means of annual population estimate ratios. Spending figures of Upper Tier Local Authorities include aggregating spending power of Lower Tier Local Authorities to Upper Tier Local Authorities. Values are presented on the basis of financial years, i.e. from April 1^st to March 31^st and are presented in £ millions. Figures from historic LA geography have been referenced to the 2021 LA geography. This includes any changes in name/codes, merges, or splits of old LAs to new LAs, based on population ratios for that year. Figures for 2021-22 are based on the Ministry of Housing, Communities & Local Government estimations. Note that values were not adjusted for inflation.

The Adjusted Core Spending Power (FIN_07_59L_ADJ) is calculated as above, but follows the methodology of the National Audit Office report, where Core Spending Power figures are adjusted by removing the Council Tax requirement (excluding however the Parish Precepts) in order to calculate the spending power funded by central government. The adjustment is calculated as:

Adjusted Core Spending Power = Core Spending Power – (Council Tax Income – Parish Precepts income)

Figures for council tax (excluding parish precepts) for 2021-22 are based on the Ministry of Housing, Communities & Local Government estimations included in the relative spending power datasets.

Since we have not included Other Types of Authorities in the calculations of spending power (e.g., Fire, Police, etc. – see below), it is not advised to compare values between different types of authorities. Absolute figures should be used to compare values between the same type of Local Authority (i.e., between Unitary Authorities), or used when looking at change of spending power over time.