Form

Supplementary guidance notes on adequate validation explanation for capital forms

Updated 22 March 2024

Applies to England

This note provides supplementary guidance notes on what constitutes adequate validation explanations for the DLUHC capital data returns. It has been written following requests we received on what details are expected in explanation comment boxes in capital forms.

Queries should be directed to: CapitalData@levellingup.gov.uk

1. Type of validations

These forms contain several types of data validations.

Generally where a figure ^{[footnote 1]} entered in the form is substantially different from the comparator data, then a cell turns orange indicating a warning and asking for an explanation ^{[footnote 2]}.

Examples of warnings include:

• Your figure is significantly less than we would expect given last year’s figure.
• Your figure is significantly different from what you forecast previously.
• Your figure exceeds the derived threshold.
• Your closing figure last year is not equal to the opening figure this year.

These data validations tests are designed to:

• Reduce errors and typos.
• Help us assure the users of our statistics (Office for National Statistics, HM Treasury, Office for Budget Responsibility, etc.) that the data are correct.
• Explain patterns in expenditure and receipts.

Please respond to all warning messages with adequate explanation. This will reduce the need for subsequent queries which require you to review your figures again.

2. Adequate explanations

An adequate explanation is a comment that is specific and which explains:

• Details about what constitutes most of the variance relative to a comparator figure. If there are several notable large components, then each should be listed with their approximate size. In the case of change in service expenditure, the descriptions should include the change in services provided or eligibility. For project/purchase, it is important for you to include as much details as possible such as the name, location, function and value of the asset – this is flagged as a warning when this is particularly high comparing for authorities of your class by service and category in the form.
• Why a figure has taken an unexpected value (e.g. zero/positive/negative). A number of the data items cannot normally be all of these. Please note that in our returns that updates or corrections for previous time periods should be addressed by editing the data for the previous period, and not by an adjustment in data for a subsequent time period.

Examples of adequate explanation (names of places have been replaced by A, B, X, Y, Z etc). N.B each contains specific explanation about the majority of the variance:

• Spend in 2019-20 includes £5m Dementia Hubs £2m spend on Disabled Facilities Grant plant and equipment £1.3m Children’s Social Care and £2m Care Hubs.
• The main items behind this figure are £4.218m for the Broadband Scheme and £2.792m in relation to unquoted equity investments.
• Outturn figure includes: £19.8m for X Regeneration (incl. new hotel cinema and food store); plus £5.76m for the continuing redevelopment of Y shops and residential units in town centre.
• This is correct. Largest schemes include: £29.9m on Strategic Site Acquisition and £12m Z College of Art expansion.
• Construction of a new waste hub in A (£4m) and improvement works to disposal facility (£7.5m).
• Large number of disposals in 2019-20 including the land at X Road to Y Police (£5m) and Z £0.6m. In addition loan repayments received from A £1m and from B £3m.
• Financial support to private sector companies required to secure investment in area. One loan of £9.25m to assist major redevelopment of part of town centre. Another loan of £0.5m to enable company to remain in local authority area.
• The HRA CFR changed by £59m compared with COR 18/19 which is due to £80m increase in capital expenditure where 15m was offset by grant.

3. Inadequate explanations

The most common reason for inadequate explanations is when a generic comment is made:

• “Figures reflect new/revised priorities/budget.” – This provides no insight as to what has changed. In almost all cases, we would expect some description of the changes, such as brief details of the change in services provided, or the change in eligibility, as appropriate.
• “Last year was incorrect”, or “we are now allocating spend more correctly to the categories”. This isn’t helpful unless you at least explain what type of spend was misclassified previously.

Please provide brief specific details of the main cause(s) of most of the unexpected figure, and please refer to previous section on adequate explanation.

Examples of inadequate explanation – only the final two contains any specific information, but wherever possible (i.e. always for outturn data, and as far as possible for budget data), these should provide details and amounts for the largest projects / acquisitions:

• As per ledger.
• Not comparable across Combined Authorities.
• Major asset purchase undertaken in 2019/20.
• Several large projects currently in progress.
• There were 2 significant capital project and those increased the spending.
• Increase in planning & development services expenditure in 2019/20 mainly acquisition of land and existing buildings.
• Bought a shopping centre in year to save the high street.
• The vast majority of this expenditure i.e. £39091k relates to the purchase of 5 Investment Properties during the year.

1. All figures to be reported in whole thousands (£’000s) and, normally, positive. ↩

2. Please respond to all warning messages with adequate explanation at the validations tabs in the form: Expenditure & receipts (E&R) Validations, financing (FIN) validations, prudential system information (PRU) validations or capital receipts reserve & major repairs reserve (REC&MRR) validations. ↩