Government admits it 'must improve understanding of capital issues'

 

The Government has admitted it needs to improve its understanding of the capital resourcing issues facing English councils, the National Audit Office (NAO) has said.

In a new report, the NAO says the Department for Communities and Local Government (DCLG) ‘has limited insight into broad changes in authorities’ capital resourcing and spending as well as associated risks’.

”Local
Communities secretary Greg Clark

It says DCLG recognises ‘there is room for improvement in relation to its understanding of capital in future spending reviews’.

The issue has come to the fore recently due to Treasury plans for the 100% local retention of business rates by 2020, which has thrown up concerns over capital revenue divisions in the local government sector.

The NAO observed that since 2010-11, councils have faced less pressure on resources to support capital expenditure, compared to revenue. Their revenue spending power fell by 25.2% in real terms from 2010-11 to 2015-16, while capital grants to councils (excluding education) increased by 0.2% from 2010-11 to 2014-15. 

Councils’ overall capital spending increased by 5.3% in real terms overall between 2010-11 and 2014-15, although nearly half (49%) of authorities reduced their capital spending.

NAO head Sir Amyas Morse said: ‘Local authorities have acted prudently and maintained overall capital spending levels, but the cost of servicing debts accounts for a significant share of revenue spending and this is likely to increase.

‘The Department therefore needs a deeper understanding of the capital issues local authorities face. Without an understanding of broader trends it will not be well-placed to anticipate risks to value for money as authorities come under greater financial pressure.’

The difference in transport spending was stark, with revenue spending on transport falling by 21.5%, while capital spending increased by 13.8% from 2010-11 to 2014-15.

According to the report, councils’ overall capital spending increased from 2012-13 ‘because of a rise in spending on transport, planning and development, and housing’, coinciding with increases in capital grants for transport and highways, and for local growth.

Transport and housing were the two areas of council spending where capital expenditure exceeded revenue, with £3.6bn capital spending on transport and £2.6 revenue spending in 2014-15.

The report says authorities face a growing challenge to continue long-term investment in their existing assets as capital activities are increasingly focused on ‘invest to save’ and growth schemes that cover their costs or have potential to deliver a revenue return.

The NAO says many areas of authorities' asset management programmes do not meet these criteria and are seen as a lower priority.

In 2014-15 English councils had a gross external debt of £58.7bn.

The report says councils’ debt servicing costs have grown as a proportion of revenue spending, with a quarter of single-tier and county councils spending the equivalent of 9.9% or more of their revenue expenditure on debt servicing.

 

Also see

Register now for full access


Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login

 
comments powered by Disqus
 
 
highways jobs

Engineer Maintenance

Liverpool City Council
£32,233 - £37,107
Liverpool City Council are looking to recruit an Engineer Maintenance. Liverpool, Merseyside
Recuriter: Liverpool City Council

Site Supervisor

Liverpool City Council
£32,233 - £37,107
Liverpool City Council wish to appoint Site Supervisors to supervise the City Council's highway construction works. Liverpool, Merseyside
Recuriter: Liverpool City Council

Permit Officer

Liverpool City Council
£23,111 - £27,358
Liverpool City Council are looking to recruit a Permit Officer. Liverpool, Merseyside
Recuriter: Liverpool City Council

Contracts Manager

Liverpool City Council
£37,107 - £41,846
Liverpool City Council wish to recruit a Contracts Manager based in Highways & Transportation. Liverpool, Merseyside
Recuriter: Liverpool City Council

Principal Engineer - Asset Management

Liverpool City Council
£37,107 - £41,846
Liverpool City Council wish to recruit a Principal Engineer - Asset Management. Liverpool, Merseyside
Recuriter: Liverpool City Council

Highways Inspector

Liverpool City Council
£32,233 - £37,107
We are seeking to recruit an enthusiastic individual to be a key member of our Highways Team. Liverpool, Merseyside
Recuriter: Liverpool City Council

Engineer - Capital Projects

Liverpool City Council
£32,233 - £37,107
Liverpool City Council is looking to recruit an Engineer - Capital Projects. Liverpool, Merseyside
Recuriter: Liverpool City Council

Engineer - Highways Capital Projects (S106)

Liverpool City Council
£32,233 - £37,107
Liverpool City Council wish to recruit an Engineer (Capital Projects). Liverpool, Merseyside
Recuriter: Liverpool City Council

Team Leader - Asset Management

Liverpool City Council
£41,846 - £46,560
Liverpool City Council wish to recruit a Team Leader - Asset Management. Liverpool, Merseyside
Recuriter: Liverpool City Council

Technical Assistant

Liverpool City Council
£23,111 - £27,358
Liverpool City Council are looking to recruit a Technical Assistant. Liverpool, Merseyside
Recuriter: Liverpool City Council

Waste and Recycling Engagement Officer

Camden London Borough Council
£24,460 - £26,358
We now have an exciting opportunity for a talented and enthusiastic individual to join us and be part of the North London Waste Authority (NLWA). Camden, London (Greater)
Recuriter: Camden London Borough Council

Major Transport & Development Projects - Strategic Specialist

Wiltshire Council
£51,763 - £57,066
Wiltshire has a highly regarded record of securing funding and delivering major transport improvements across all modes of travel. Wiltshire
Recuriter: Wiltshire Council

Assistant Director - Growth and Development

Lincoln City Council
£59,058.00 - £65,127.00
Looking for an experienced manager with a good track record in proactively driving economic growth and investment. Lincoln, Lincolnshire
Recuriter: Lincoln City Council

Assistant Director – Transport and Connectivity

Birmingham City Council
£73,513 - £90,864
This is one of a number of influential new senior roles for collaborative people, motivated by doing what’s right for our city and residents. Birmingham, West Midlands
Recuriter: Birmingham City Council

Director (Environment and Planning)

Hinckley & Bosworth Borough Council
£77,265 p.a.
You will have a great opportunity to drive forward an ambitious strategic growth agenda... Hinckley, Leicestershire
Recuriter: Hinckley & Bosworth Borough Council

Service Director – Environment

Kirklees Metropolitan Council
£98,615
Looking to recruit to a key post within our Economy and Infrastructure Directorate.  Kirklees, West Yorkshire
Recuriter: Kirklees Metropolitan Council

Transport & Development Officer (Career Grade)

London Borough of Bexley
£29,130 - £40,173
This is a Career Grade post and an excellent opportunity. Bexley (City/Town), London (Greater)
Recuriter: London Borough of Bexley

Transport Planning Officer x 2

Plymouth City Council
£32,233 to £41,846
If you are an experienced Transport Planner then we need you to step aboard.  Plympton, Plymouth
Recuriter: Plymouth City Council

Transport Planning Officer x 2

Plymouth City Council
£32,233 to £41,846
Exciting time to join the Council and this role represents an opportunity to make a real difference... Plympton, Plymouth
Recuriter: Plymouth City Council

Waste and Fleet Operations Manager

Ipswich Borough Council
£52,020 - £56,100 (pay award pending)
Looking for someone to lead and manage a large and vital operational area... Ipswich, Suffolk
Recuriter: Ipswich Borough Council