House of Commons Library

Local government finances

Published Wednesday, October 31, 2018

Local authorities in England spent £74 billion in 2017/18. This briefing looks at the funding that local authorities receive from central Government, and where and how they spend it.

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Local government in England is handled by several different types of local authority – in some areas it is split into two tiers (of district and county councils), while in others a single authority handles all local government responsibilities. The needs and relative deprivation of these areas vary widely, and so does the amount of money available to each.

Inner London boroughs receive more grant funding per person from central Government than any other type of local authority, while shire counties and the districts within them receive the least. These variations are considerably reduced when one instead looks at the local authorities’ core spending power, which takes into account the differing amounts of money that each authority can raise on its own behalf.

On average in England, both grant funding and spending power have decreased in every year from 2010/11 to 2015/16, and grant funding is projected to continue to decrease until at least 2019/20.

The amounts spent per person by each local authority area show broadly similar variations – inner London boroughs spend the most per person, and shire counties and districts the least. There is a large range of spending between different local authority areas; in 2017/18, Hackney spent the most per person, at £3,056, and Leicestershire (along with its constituent district authorities) the least, at £1,054. 

Spending per person has decreased in the vast majority of local authority areas since 2010/11, although some areas have seen modest increases.

Local authorities mostly spend their resources on education services and adult and children’s social care – these three areas together made up well over half of local government spending in 2017/18, much of it as part of ring-fenced grants.

Similar statistics are also available for the devolved administrations of the UK, but are not covered in depth in this briefing.

Commons Briefing papers CBP-8431

Author: Philip Brien

Topics: Local government, Public administration, Public expenditure

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