The percentage of local government revenue expenditure financed by specific grants in England in each year since 1997-98 and the estimated figures for 2006-07 and 2007-08 are in the following table.
The table is produced on a non-Financial Reporting Standard (FRS17) basis to 2003-04 and on an FRS17 basis from 2003-04 onwards. The main implication is that the costs of entitlements to retirement benefits (pensions) in FRS17 are accounted for in the year in which employment gives rise to the entitlement, rather than the year in which cash payments of contributions or pensions take place. On an FRS17 basis revenue expenditure is now financed by appropriations from pension reserves, in addition to appropriations from other reserves, revenue support grant, redistributed non-domestic rates, police grant and council tax.
Proportion excluding education Proportion including education Non-FRS17 basis 1997-98 5 4 1998-99 6 5 1999-2000 6 5 2000-01 7 8 2001-02 9 11 2002-03 13 14 2003-04 — 18 FRSI7 basis 2003-041 — 17 2004-051 — 77 2005-061 — 17 2006-071 — 44 2007-081 — 44 1Most specific grants are allocated to particular service areas. However, there are a number of specific grants which can fund a variety of services. The increasing proportion of such grants means that, from 2003-04, it is no longer possible to give accurate figures for specific grants by service block. Source: Communities and Local Government Revenue Outturn (RO) returns 1997-98 to 2005-06. Communities and Local Government Revenue Account (RA) Budget returns 2006-07 to 2007-08.
The large change in specific grant from 2006-07 onwards is largely due to changes in the way the expenditure on schools is funded. Local authorities now receive dedicated schools grant, included in specific grants, replacing funding previously included in formula grant.
The definition of local government revenue expenditure used here is that expenditure funded from Aggregate External Finance (AEF), council tax and authorities' reserves. AEF is central Government revenue funding that comprises formula grant (revenue support grant, redistributed business rates and police grant), general Greater London Authority (GLA) grant and specific grants inside AEF, i.e. revenue grants paid for council's core services. The specific grants used here are the specific grants inside AEF.
Comparisons across years may not be valid due to changing local authority responsibilities.