Form

CER: capital estimates return guidance notes

Updated 23 February 2024

Applies to England

1. Introduction

Version	Date	Change notes

1

18 January 2021

Updated links at section 1.3 - relevant legislation and codes of practice.

2

23 February 2024

Updated guidance incorporating requirement for additional detail and updated legislation.

• Returns should be fully consistent with the authority’s agreed prudential indicators and therefore with its agreed capital plans.

• Queries regarding completion of the Capital Estimates Return not resolved by this guidance should be directed to: CapitalData@levellingup.gov.uk.

• Please note the Capital Estimates Return is completed and submitted via an Excel spreadsheet, not DELTA.

1.1 General notes

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.

Please note that educational academies are government funded so exclude related capital from this return.

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).

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

1.2 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 Estimates 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.

• 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.

• 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.

• 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).

• 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 2019/20, hereafter the Accounting code.

CIPFA/LASAAC, The Prudential Code for Capital Finance in Local Authorities (2018 Edition), hereafter the Prudential code.

CIPFRA/LASAAC, Service Reporting Code of Practice for Local Authorities 2021/22, hereafter SeRCOP.

1.5 Using this guidance

This guidance contains references to:

• each sheet

• column

• row of the form

as relevant. For example, ‘Worksheet E&R1, C31’. 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 C06, R07. You could search R07 if you are looking for more detail on ‘parking’ or C06 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 Estimates form record the information for this area:

• E&R1

• E&R1A

• E&R1B

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.

Capital receipts are defined in section 9 and section 10 of the Local Government Act 2003.

• Capital expenditure and receipts should be on an accruals (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) basis.

• 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.

• 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
Section 16(2)(a)	Expenditure capitalised by Regulation
Section 16(2)(b)	Expenditure capitalised by Direction	√
- 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	√

2.1.2 Agency arrangements

In the case of agency arrangements, the authority holding the resource cover should include the expenditure on their forms.

When an authority undertakes work on behalf of another authority, the sponsoring authority only should show the details on their return.

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.

Exclude: The cost of work executed by a local authority as the agent of a 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 (Worksheet E&R1).

2.2 Categories

2.2.1 Expenditure

Worksheets:

• E&R1

• E&R1A

• E&R1B

Including the below:

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.

Exclude: Any PFI (Private Finance Initiative) schemes in the capital expenditure section (worksheets E&R1, E&R1A, E&R1B) 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.

2.2.1.1 Intangible fixed assets

Worksheet E&R1, C06

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.

2.2.1.2 Grants

Worksheet E&R1, C08

Please note that the value in C12 (… excluding to local authorities) is determined by the values entered in C08 (Grants) and C09 (… of which to other local authorities).

Covers expenditure under Regulations 25(1) (b) and (c). 

2.2.1.3 Loans & other financial assistance

Worksheet E&R1, C13

Exclude: Mortgages associated with council house sales.

2.2.1.4 Of which to other local authorities

Worksheet E&R1 C09, C14

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:

• County councils

• District councils

• Metropolitan districts

• Unitary authorities

• London boroughs

• Combined authorities

• Police authorities

• Fire and rescue authorities

• Waste authorities

• 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.

2.2.1.5 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 (C12 and C17).

This sheet must be a complete breakdown of the related figures from E&R1. This means that C02-C06 must sum to C01 and C08-C12 must sum to C07. This will be ensured as C06 and C12 are calculated from the other values entered.

2.2.1.6 Acquisition of share or loan capital

Worksheet E&R1, C18

Include expenditure on the acquisition of share capital in any body corporate.

2.2.2 Other transactions

Worksheet E&R1

2.2.2.1 Payment of large-scale voluntary transfer (LSVT) levy

Worksheet E&R1, C24

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 (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. 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.

2.2.2.2 Expenditure to be treated as capital expenditure by virtue of a section16(2)(b) direction

Worksheet E&R1, C25

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.

2.2.3 Receipts

Worksheet E&R1, R55, C33

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 Regulation13.   

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.

2.2.3.1 Disposal of tangible assets

Worksheet E&R1, C29

Examples of tangible assets include land, buildings, machinery, or inventory.

Exclude: that part of a receipt applied in defraying the administrative costs of, and incidental to, the disposal of housing or other land (Regulation 23(e).

2.2.3.2 Disposal of intangible fixed assets

Worksheet E&R1, C30

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.

2.2.3.3 Repayments of grants, loans & other financial assistance

Worksheet E&R1, C31

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 money or lottery grants etc.

2.2.3.4 Disposal of investments (including share or loan capital)

Worksheet E&R1, C32

Include receipts from any disposal of share and loan capital in any body corporate, which ranks as a capital receipt, covered by Regulation 7. 

2.2.3.5 Total capital receipts, of which to be paid to the Secretary of State

Worksheet E&R1, C36

Include the gross amount of housing capital receipts (included in Housing) expected to be paid to the Secretary of State under Regulation 12 and Regulation13.

2.3 Services

Worksheet E&R1, R55

Worksheets:

• E&R1

• E&R1A

• E&R1B

2.3.1 Education

Worksheet E&R1, 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 part of the expenditure/receipts in:

• Early Years & Primary Schools

• Secondary Schools or

• Special Schools & Alternative Provision as appropriate

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 Revenue Expenditure funded from Capital under Statute (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:

(1) it remains a capital grant by the LEA and this and the financing of it should be included

(2) 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.

2.3.1.1 Early years & primary schools and secondary schools

Worksheet E&R1, 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, 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, R04

Include all expenditure and receipts related to:

• administration and inspection

• child guidance

• community provision charged to education accounts

• adult and community learning

• other services to young people

• 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.

Exclude: Academies are completely outside LA control and related capital should be excluded from the return.

2.3.2 Highways & transport

Worksheet E&R1, R13

This category is the sum of R06-R12. The Highways & Transport section collects data covering the below categories:

• roads, street lighting & road safety

• parking

• public Transport (bus)

• public Transport (rail & other)

• airports

• ports & piers

• tolled roads, bridges, tunnels, ferries & public transport companies

2.3.2.1 Roads, street lighting and road safety

Worksheet E&R1, R06

This category includes the below:

• car parks

• roads (including structural maintenance)

• lighting

• 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:

• overheads

• appropriate allocation of central departments’ charges

• capitalised professional and technical service costs

• relevant overheads and recharges

• capital expenditure on substantial replacement and improvement of existing street lighting, as well as complete new systems

Exclude:

• private streets or other private works

• roads not chargeable to the highways account

• trunk roads (if recoverable), including the cost of participation in road construction units

• all expenditure associated with highway schemes for which the construction costs are reimbursed by 100% grants from the Department for Transport (DfT)

• capital cost of roads built by new town corporations, including works undertaken by county councils on behalf of the corporations

• amounts of interest capitalised, that arise after an asset has opened for public use

• lighting in non-highways areas. These should be included in Community Safety

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.

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:

• reconstruction

• overlay

• resurfacing

• patching

• surface dressing

• remedial earthworks

• minor repairs

• drainage

• footways and cycle tracks

• 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).

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:

• culverts (over 1.5m span)

• pedestrian subways

• highway tunnels

• 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 street lighting 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, 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, 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, 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, R11

Include expenditure and receipts from directly owned facilities.

2.3.2.6 Tolled roads, bridges, tunnels, ferries & public transport companies

Worksheet E&R1, 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, 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.

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.

2.3.4 Public health

Worksheet E&R1, 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 CERA payment on the revenue forms, with details provided on the capital forms.

2.3.5 Housing

Worksheet E&R1, 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 especially important, as any significant inconsistencies will lead to subsequent queries on the data.

Include any expenditure financed by the Estate Action plan for your authority, as well as housing expenditure under other SRB (Single Regeneration Budget) 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 (C29) covers all receipts (including LSVT) associated with the sale of council dwellings, both Part II and non-Part II Housing Act 1985 HRA (Housing Revenue Account) 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 (C29).

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 (C31); this will also include such mortgages repaid prematurely, e.g., refinanced by a building society.

Exclude: Loans made directly to RSLs (Registered Social Landlords) by the Housing Corporation.

2.3.5.1 Housing (HRA)

Worksheet E&R1, R16

• Section 74 in Part VI of the Local Government and Housing Act 1989 (LGHA 1989) requires local authorities that own their own housing stock to keep a ringfenced 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 LGHA 1989, which specifies the items to be debited Part II 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, 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, 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; should be recorded here under Grants.

2.3.6 Total culture & related services

Worksheet E&R1, R24

This category is the sum of R19-R23.

2.3.6.1 Culture & heritage

Worksheet E&R1, 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.

2.3.6.2 Recreation & sport

Worksheet E&R1, R20

Include:

• expenditure and receipts on sports halls and physical recreation centres

• golf courses

• playing fields and sports grounds

• swimming pools and miscellaneous physical recreation facilities

• play spaces

• play/kick about areas

• equipped playgrounds

• play parks and centres

• adventure playgrounds and play schemes

• 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, 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, R22

Include expenditure on tourism here.

Exclude: from Planning & Development Services.

2.3.6.5 Library services

Worksheet E&R1, 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, R39

This category is the sum of R25-R38.

2.3.7.1 Cemeteries, cremation & mortuary

Worksheet E&R1, 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, 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, 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, R28

Include defences against flooding and internal drainage levy work.

2.3.7.5 Agriculture & fisheries services

Worksheet E&R1, 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, 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, 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, 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, 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, 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, R35

Include the capital costs associated with trade waste.

2.3.7.12 Recycling

Worksheet E&R1, R36

Include the capital costs associated with recycling.

2.3.7.13 Waste minimisation

Worksheet E&R1, 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, 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, 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, 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, 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, R43

Include capital costs related to the regular fire and rescue services.

2.3.12 Central services

Worksheet E&R1, 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, 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, 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, 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, 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, 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, R48

Examples include electricity substations, renewable power investment.

2.3.13.1.5 Water supply, sewerage & remediation

Worksheet E&R1, R49

This includes collection, treatment and disposal of waste.

2.3.13.1.6 Hospitality & catering

Worksheet E&R1, 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, R51

Include spend on commercial activity not otherwise captured by E&R1 R45-R50.

2.3.13.2 Other trading

Worksheet E&R1, 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).

3. Resources used to finance capital expenditure, other transactions and PFI

Worksheet FIN1, R23

Recorded in the following worksheets:

• FIN1

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.

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)

3.1.2 Grants from European structural & investment funds

Worksheet FIN1, R02

Include contributions from any of the European Structural or Investment Funds:

• European Regional Development Fund

• European Social Fund Plus

• European Agricultural Guidance and Guarantee Fund

• Financial Instrument for Fisheries Guidance

3.1.3 Grants from private developers & leaseholders, etc

Worksheet FIN1, R03

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.

3.1.4 Grants from non-departmental public bodies

Worksheet FIN1, R04

Include capital grants from all non-departmental public bodies, such as:

• Sport England

• English Heritage

• Arts Council England

• Natural England

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 DLUHC (Department for Levelling Up, Housing and Communities) 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.

Exclude financing from MRR (captured in the line below).

3.3.2 Major repairs reserve

Worksheet FIN1, R12

Include here financing of HRA capital expenditure which comes from the Major Repairs Reserve.

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:

• PRU1

• PRU2

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 & credit arrangements

Worksheet PRU1, R03, this category is the value from FIN1, R28

This is the amount of capital expenditure in the reporting year 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, R04

Include Expected Minimum Revenue Provision (MRP) as required by Regulation 27 (1) (a).

Any additional voluntary contributions under Regulation 27(1)(b) in respect of prior financial years.

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.

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.

4.1.4 Change in capital financing requirement

Worksheet PRU1, R05

This is Expenditure financed by other borrowing and credit arrangements less Contribution from revenue, MRR, or use of receipts to repay credit liabilities. It is calculated within the worksheet.

4.1.5 Capital financing requirement as at 31 March

Worksheet PRU1, R06 (R02 + R05)

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 (R05). 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.

4.2 Borrowing, credit and investments

4.2.1 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 as defined in para 88 of the Prudential code.

Exclude: Borrowing of local authority companies. This should be recorded in Gross borrowing and other long-term liabilities of local authority companies.

Exclude: Any amount that relates to accrued interest or other items.

4.2.2 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.

4.2.3 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 is as defined in para 70 of the Prudential code. This should include both long-term and short-term investments, cash and cash equivalents.

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. When repayments are made, please record outstanding amounts, deducting repayments made. Do not deduct any prospective or actual impairment. The outstanding amount should continue to be recorded until a final settlement is made or the full amount should be recorded unless a final settlement is made, whether or not a payment is made.

Exclude: Any amount that relates to accrued interest or other items.

4.3 Operational boundary and authorised limit

4.3.1 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).

4.3.2 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. Accumulated capital receipts

Worksheet REC, R01, C01

Record capital receipts used to finance 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 DLUHC of these changes as soon as possible, by emailing:  capitalreceiptsflexibility@levellingup.gov.uk.