CIPFA Statistical Information Service

English Local Authority spending set to increase by 4.5%

Figures published by the Chartered Institute of Public Finance and Accountancy (CIPFA), show that local authorities in England are forecasting total service expenditure to reach £88.2 billion in 2006-07. This is equivalent to an average £1,748 per person and is a 4.5% increase from 2005-06.

The CIPFA Finance and General Statistics 2006-07 provide the first detailed account of authorities’ expenditure plans and the first real profile of how money being raised through council tax bills is distributed across various services. They also show regional variations across England.

Local government services are substantially funded by central government grants and these account for about 75% of authorities’ spending. This year the government made it clear that it did not expect the average council tax increase to exceed 5%, and consequently the overall increase was 4.5%. This apparent restriction in local flexibility around the levels of council tax funding has been mirrored in local authority service expenditure plans.

Highways, Roads and Transportation services had one of the largest increases in expenditure (6.4%) since 2005-06, closely followed by Cultural, Environmental & Planning services, which increased by 6.2%. Education Services was the most expensive spend per head (£733) followed by Social Services (£352).

The following table shows the distribution of expenditure in England per head of population, across the various services.

Analysing the figures on a regional basis, Greater London has the largest expenditure per head with £2,431. In comparison the South West has the lowest at £1,492 per head. Further details are shown in Figure 1:


Since last year the revenue support grant that government pays to councils no longer covers spending on schools, which is now funded by a specific grant known as the dedicated schools grant (DSG). The level of DSG distributed in 2006-07 is £26.6 billion.