Making the most of capital

摘要

The Department for Communities and Local Government is currently consulting on proposals to relax the controls on local authority capital receipts. The aim is to encourage local authorities to streamline their £233bn asset base and use the released funds to pay for one-off costs of service reforms. At first sight this seems like a radical initiative that ticks some important boxes, including: 1. Supporting the localism agenda by providing flexibility in how local resources can be used 2. Releasing funds to secure step-changes in service reform 3. Providing a big incentive for local authorities to work collaboratively across the wider public sector and beyond to make the best use of their asset base. Those reading through the detail may feel a little underwhelmed. The capital financing regulations for treating specified revenue expenditure (such as the payment of capital grants to third parties) as capital will remain unchanged.