In February 2018 David Rhodes reported that one in every three local authorities spent more on services in 2016-17 than they expected to.
The story followed the announcement by Northamptonshire County Council that it was in financial trouble and was banning all new spending, raising questions about the financial health of local authorities across England.
- Ministry of Housing, Communities and Local Government
- ONS: Local authority revenue expenditure and financing England: 2016 to 2017 individual local authority data - outturn
- ONS: Local authority revenue expenditure and financing England: 2016 to 2017 budget individual local authority data
- Multiple bar chart: Spending at Northamptonshire County Council 2012-2017 - budgeted spending vs actual spending
- Bar chart: Councils in England with the largest budget overspends 2017-17
- Bar chart: Council spending on children and adult social care 2012-17
We compared budgeted net current expenditure in 2016/17 to outturn net current expenditure 2016/17.
Where outturn net current expenditure exceeded budgeted net current expenditure this was identified as an overspend on the authorities original budgeted net current expenditure amount.
The reason for using net current expenditure is because we feel this gives a fairer comparison between councils when it comes to analysing the financial pressure that local services have come under. The point of the piece was to demonstrate that councils are having to do more with less money.
If a council budgeted to spend £300 million on services as part of net current expenditure, but ended up spending £350m, this suggests that demand for services was greater than expected. This is particular relevant when looking at the issue of social care provision in the current climate.
The other measure, net revenue expenditure, takes account of grant funding and other financial instruments, at the disposal of councils. For example included within net revenue expenditure are the amounts that councils receive in grant funding, interest and investments, provisions for bad debts and leasing payments. Not all of these factors are equal between councils.