Form

CPR4: capital payments and receipts return guidance notes

Updated 22 March 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	22 March 2024	Order of sections amended to improve flow. New sub-sections added to capture additional requirements within E&R1 for Total Housing (HRA and non-HRA).

• 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 Payments and Receipts 4 Return not resolved by this guidance should be directed to: CapitalData@levellingup.gov.uk. 

• Please note the Capital Payments and Receipts 4 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 Payments and Receipts 4 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). 

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: 

• each sheet 
• column 
• row of the form 

as relevant. For example, ‘Worksheet E&R1, C31, R22’. 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 ‘Total education’, this is sheet E&R1 in the form and C06, R07. You could search R07 if you are looking for more detail on ‘Total education’ 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 worksheet in the Capital Payments and Receipts 4 form record the information for this area: 

E&R1 Total capital expenditure, other transactions and total capital receipts 

• 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 Act. 
• 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). 
• 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. 
• Include the cost of entering into or varying credit arrangements, as defined under section 8 of the Act and Regulation 6. 

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  
• exclude expenditure, which will be financed by NHS bodies to joint-financed schemes. 
• exclude Any PFI schemes in the capital expenditure section unless your authority has economic ownership of the asset (i.e., benefits and risk). 

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 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 

Worksheet: E&R1 Total capital expenditure, other transactions and total capital receipts 

2.2.1 CPR previous quarters figures 

Worksheet E&R1 R01-R06 

These figures are taken from the previous quarter’s return’s All Services Totals and are displayed for Q1 in R01-02, Q1-Q2 R03-04 and Q1-Q3 R05-06.  

2.2.1.1 Amending previous figures 

If you need to amend any previous quarters figures, please overwrite the current code in that cell with new corrected figure.  

Please note that CPR is a cumulative figure and your CPR3 Q1-Q3 figures should not exceed your CPR4 Q1-Q4 figures. 

2.2.2 Acquisition of land & existing buildings 

Worksheet E&R1, C01 

This category includes but is not limited to: 

• Dwellings 
• Buildings other than dwellings (e.g. public monuments, warehouse and industrial buildings, commercial buildings, buildings for public entertainment, education buildings, and health buildings) 
• Land (i.e. where land on its own has been purchased) 

The value provided for the acquisition of dwellings and/or buildings other than dwellings should include the land underneath. 

2.2.3 Vehicles, plant, furniture & equipment 

Worksheet E&R1, C03 

This category is the sum of vehicles and plant, furniture & equipment. It includes plant & machinery, IT equipment & hardware and furniture & fittings. 

2.2.4 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. 

Intangible fixed assets include: 

• Long term investments 
• Long term debtors 
• Heritage assets 
• Other non-current assets 
• Short term investments 
• Short term debtors 
• Cash and cash equivalents 
• Other current assets 

2.2.5 Grants 

Worksheet E&R1, Table 1, C08 

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

Please note that the value in E&R1 C12 (… excluding to local authorities) is determined by the values entered in C08 (Grants) and C09 (… of which to other local authorities). 

2.2.6 Loans & other financial assistance 

Worksheet E&R1, C13 

Exclude mortgages associated with council house sales. 

Please note that the value in C17 (… excluding to local authorities) is determined by the values entered in C13 (Loans or other financial assistance) and C14 (… of which to other local authorities) 

2.2.7 (… 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. 

2.2.8 Acquisition of share or loan capital 

Worksheet E&R1, C18 

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

2.3 Services 

Worksheet E&R1, R22 

Worksheet: E&R1 Total capital expenditure, other transactions and total capital receipts. 

2.3.1 Education 

Worksheet E&R1, R07 

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: 

• Early years & primary schools 
• Secondary schools 
• 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:  

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. 

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

2.3.2 Highways & transport 

Worksheet E&R1, R08 

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 

2.3.3 Social care 

Worksheet E&R1, R09 

Includes 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. 

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 Total Education. 

2.3.4 Public health 

Worksheet E&R1, R10 

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, R13 

This category is the sum of R11 and R12. 

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 (C29) 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 (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 by the housing corporation. 

2.3.5.1 Housing (HRA) 

Worksheet E&R1, R11 

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, R12 

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, R14 

Culture and related services include: 

• Culture & heritage 
• Recreation & sport 
• Open spaces 
• Tourism 
• Library services 

2.3.7 Environmental & regulatory services 

Worksheet E&R1, Table 1, R15 

Environment & regulatory services include:  

• Environmental & regulatory services 
• Cemeteries 
• Cremation & mortuary 
• Coast protection 
• Community safety 
• Flood defence & land drainage 
• Agriculture & fisheries services 
• Regulatory services (environmental health) 
• Regulatory services (trading standards) 
• Street cleaning (not chargeable to highways) 
• Waste collection 
• Waste disposal 
• Trade waste 
• Recycling 
• Waste minimisation 
• Climate change costs 

2.3.8 Planning & development services 

Worksheet E&R1, R16 

Planning & development services include: 

• Planning departments’ expenditure on development control 
• Building regulations and planning implementation 
• Direct expenditure on conservation 
• Environmental improvements 
• Conversion and commercial development 
• 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, R17 

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, R18 

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, R19 

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

2.3.12 Central services 

Worksheet E&R1, R20 

Includes expenditure on an authority’s: 

• Properties 
• Transportation 
• Equipment and material that cannot properly be set against some other specific service 
• Includes expenditure and receipts on coroners and magistrates courts 

Also, includes: 

• 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, R21 

Total trading services include:  

• Commercial housing 
• Other real estate activities  
• Finance & insurance activity  
• Energy generation & supply 
• Water supply 
• Sewerage & remediation 
• Hospitality & catering 
• Other commercial activity 
• Other trading 

2.4 Other Transactions  

Worksheet: E&R1 Total capital expenditure, other transactions and total capital receipts 

2.4.1 Payment of 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 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, 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. 

2.5 Receipts 

Worksheet: E&R1 Total capital expenditure, other transactions and total capital receipts

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, 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 monies or lottery grants etc. 

2.5.2 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 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, 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 Regulation 13. 

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

Worksheet FIN1, R21 

Worksheet: FIN1 Resources used to finance capital expenditure, other transactions & PFI 

Within FIN ‘capital expenditure’ includes any capitalised expenditure by virtue of section 16(2)(b).

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. 

3.1.2 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 (available here under the heading ‘Agencies and other public bodies’) such as the below: 

• 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 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.  

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: 

• PRU1 – Capital financing requirement 
• 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, 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 (R03 - R04) 

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 (R04) value.  

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. 

Please note that the opening and closing figures should exclude any amount that relates to accrued interest or other items. 

4.2 Borrowing, credit and investments 

Worksheet PRU2 

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 defined in para 88 of the Prudential code. This is the unadjusted principal amount of all outstanding external borrowing. As such, you should include: 

• 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. 
• 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. 
• 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: 

• any accounting adjustments, such as premiums and discounts, 
• transactions costs, amortisation, fair value, accrued interest and effective interest rate adjustments. 
• any internal borrowing, such as: 
• billing authorities internal borrowing and lending between the General Fund and the Collection Fund. 
• 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. 

4.2.2 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 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: 

• all external investments made by your authority, both short and longer-term, for any purpose 
• all current and deposit accounts as well as overnight or longer-term deposits made with banks through the money markets 
• all stocks, bonds, mortgages, equities, debentures, holdings of shares in wholly owned companies, airports etc 
• all local authority funds and reserves, including those managed externally 
• 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 
• 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: 

• any accounting adjustments, such as premiums and discounts 
• transactions costs 
• amortisation 
• 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 Operational boundary and authorised limit 

Worksheet PRU2, Table 2 

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. Flexible use of capital receipts 

Worksheet REC 

This sheet requests capital receipts used to finance revenue expenditure. Revenue expenditure capitalised under section 16(2)(b) is treated as capital for the purposes of these returns, as such exclude this expenditure. Include all other revenue expenditure funded by capital receipts, for example where this is done to avoid charging to the General Fund. See section 4.6 of the Accounting Code of Practice for further details.