Council spending 2014/15Where does council money come from and where is it spent? / Delivering the Camden plan
Where does council money come from and where is it spent?
In 2014/15 the Council will spend around £858m. This is bigger than lots of corporate businesses and we provide hundreds of important services. One of our key duties is to ensure that we are giving value for money.
The majority of council funding (72%) comes from central government. In recent years there has been significant change to the services Councils provide, for example, with the transfer of Public Health from the NHS in 2013/14, and to the way we get our funding.
The Council has limited or in some cases practically no control over a lot of the money it spends. Of the £858m total spend, £195m is spent on Housing Benefit payments according to government eligibility criteria, and £185m is ring-fenced for Schools spend.
Council tax makes up only a small portion (10%) of the overall money we receive to provide services.
Since 2013/14 Councils have been able to retain a proportion of the business rates collected locally, and to retain a portion of any growth. Previously all business rates were handed over to government and redistributed nationally according to need. However, the Government still sets the rules for the level of business rates and takes most of the money. Retained business rates makes up 10% of council funding.
Camden is able to claim 17p in the pound of business rate growth above the level of inflation. However if business rates fall the Council will suffer declining income. In that scenario we would bare the first £6 million in any fall in local business rates. This means that, more than ever before, it is important to work together to harness the benefits of economic growth.
Capital and revenue finance and funding
Local government finance is a complicated mix of law and accounting rules. There are key differences to how we can spend money and how finance works in the business world. One of the differences is the money and rules surrounding capital and revenue finance and funding.
- Revenue expenditure is essentially the running costs. This is the money we spend to run the services we provide. It includes the costs of employees, supplies and services, premises and utility costs.
- Capital expenditure is money spent on improving and investing in Camden's infrastructure, for example our roads, schools and buildings. The main point is that we, unlike private businesses, get separate funding for revenue or capital expenditure.
The overall rule is that we can spend revenue money on capital items, if there is any left over after paying the revenue bills, but we cannot spend the capital money on revenue expenditure.
To find out more about the Council's budgets and spend, please visit our financial strategy updates page.
Page last updated Mar 4, 2014 11:55 AM