Financial sustainability of local authorities visualisation: update.
M2 PRESSWIRE-July 21, 2021-: Financial sustainability of local authorities visualisation: update
(C)1994-2021 M2 COMMUNICATIONS
RDATE:21072021
Background
The data visualisation below describes changes in English local authorities' financial circumstances over the last decade. It updates a number of pieces of analysis originally set out in our 2018 report Financial sustainability of local authorities 2018 and its accompanying data visualisation. It also draws on and updates analysis and findings from our 2016 report Financial sustainability of local authorities: capital expenditure and resourcing and its data visualisation, and our 2020 report Local authority investment in commercial property.
The analysis below does not cover the impact of the COVID-19 pandemic on local authorities' finances. The national data required to undertake this analysis at the level of individual local authorities has not yet been published. However, our March 2021 report Local government finance in the pandemic sets out the pandemic's impact at the national level.
While the pandemic has had a significant impact on authorities' finances the fundamental patterns of financial restructuring over the last 10 years shown in this visualisation remain highly relevant. These trends shaped the financial circumstances of individual authorities and the sector as a whole entering the pandemic. They also represent the ongoing structural context that may need to be addressed in any future government reform of local government.
Key themes explored in the data visualisation include:
* Reductions in revenue funding
* Growth in some new and alternative income streams
* Changing patterns of service spending
* New capital investment strategies and associated risks
* Changing patterns of financial sustainability
Purpose of the work
The objective of the visualisation is to allow you to explore the key trends identified in our recent reports in order to gain a more detailed and up-to-date understanding of the experiences of individual local authorities or groups of authorities.
The data we present show changes in income and spending alongside analysis of factors such as budget overspends and levels of reserves. These figures can change for a range of reasons such as local political priorities, changes in local demand and changes in government policy and priorities. Readers also need to bear in mind the differences in the functions and responsibilities of different types of authority. Consequently, comparisons between authorities need to be undertaken with caution. Overall, the complexity of factors underlying the data means that differences in figures presented here should not be viewed as indicative in any way of the current 'performance' of an authority. Any apparent differences between authorities should be seen as an opportunity to gather more information and build a richer understanding.
The data in the visualisation present a picture of the key trends affecting the sector and how individual authorities or groups of authorities compare to those trends. The analysis is not designed to identify specific authorities whose financial sustainability may be at risk. While the data in this visualisation are potentially relevant to an assessment of individual authorities' financial sustainability they by no means represent a full assessment. Other data resources focused on financial sustainability, such as the Chartered Institute of Public Finance and Accountancy's (CIPFA's) Financial Resilience Index, are available. Data and methodology
A full methodology is available below. This provides a full account of the data sources, definitions and adjustments that have been used in the visualisation. An FAQ section is also available below.
The great majority of the data shown in these visualisations has been taken from data published by the Ministry of Housing, Communities and Local Government (the Department), much of which was derived from returns from local authorities. We have made a small number of adjustments to reflect changes in reporting and responsibilities in certain service areas and income lines over this period. However, we have not sought to quality assure every data point provided by each individual local authority. Visualisation Accessibility note
This tool uses third party software to present data in the form of interactive maps and graphics. The navigation is optimised for mouse use but supports keyboard functionality.
If you cannot access the data in this format (perhaps because it is not accessible to your assistive technology), we have provided the underlying data as comma separated files (csv) as an alternative to allow you to perform your own data analysis:
Download visualisation raw data (NB this will be made available late on the day of publication)
If you need additional help, you can phone the NAO Enquiries Point on +44(0)2077987264. Alternatively, you can email general enquiries to enquiries@nao.org.uk or use our online contact form.
If you're having trouble viewing the visualisation on a mobile device, or need a larger view, here is a direct link to the full screen visualisation.
Methodology Across all dashboards
Types of local authority: This visualisation presents data for five types of English local authority - London boroughs (including City of London), metropolitan districts, unitary authorities, county councils and district councils. Owing to the similarities between unitary authorities, metropolitan districts, London boroughs and county councils we frequently focus on them as a distinct group of authorities called 'single-tier and county councils'. In some service areas, such as adult and children's social care, it is only these authorities that have statutory responsibilities.
Local authority reorganisation: A number of local authorities have reorganised in the period covered in this work. We present authorities based on their current (2021-22) configuration. In most cases, where authorities have reorganised we are able to create a time series by summing their historic constituent authorities. However, for the Dorset and Northamptonshire reorganisations we have apportioned elements of income and spend associated with the former county councils to their successor bodies based on the population of the relevant district councils. We have not attempted to adjust for the small number of changes involving some local authorities' fire and rescue services in this period.
Deflator series: Where data are converted into real-terms we show data in 2019-20 prices based on the HM Treasury deflator series published on 3 March 2021 with the Budget. However, owing to a significant 'atypical movement' in the deflator series in 2020-21 due to the impact of COVID-19, we replace the deflator's forecast inflation for that year with the compound average growth rate for the period 2020-21 to 2022-23. This has implications for our analysis of spending power, which covers the period 2010-11 to 2020-21. However, all of our other analyses are not affected by this adjustment as their data series end in 2019-20.
Data sources: Data are taken from the revenue outturn (RO) set of returns which includes the revenue outturn summary (RS) and revenue outturn service expenditure summary (RSX) returns. We also use the revenue account (RA) and capital outturn return (COR) suite of data returns published annually by the...
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