MHCLG data spotlights sharp rise in councils’ commercial activity

12 Oct 18

Local authority spending on commercial trading services has increased “significantly” over the last four years, government data has revealed.

Expenditure on commercial trading services rose from £323m in 2014-15 to £2.9bn in 2017-18, according to figures from the Ministry of Housing, Communities and Local Government.

The government report on the data said: “A large part of this increase is as a result of a rise in expenditure on acquisition of land and existing buildings.

“This has increased six-fold, from £280m in 2013-14 to £1.8bn in 2017-18.”

The figures, from MHCLG’s Local Authority Capital Expenditure and Receipts for England, showed that several authorities have spent “unprecedented amounts” of more than £200m on commercial trading services.

MHCLG also noted that the rise in commercial activity was also explained in part by the number of authorities spending smaller amounts – up to £50m – also increasing.

The data report said until 2016-17 authorities “rarely” spent more than £50m on trading services, but this year a record 12 authorities spent more than £50m. Together these 12 authorities spent a total of £1.5bn.

The two biggest spenders were Spelthorne Borough Council at £270m and Warrington Borough Council with £220m. Eastleigh Borough Council also spent £194m.

In August, Warrington’s accounts were delayed due to a complaint made about a £30m investment in a bank.

The data from MHCLG also showed a £2bn rise in the total capital expenditure by local authorities in England.

The total expenditure grew from £23.3bn in 2016-17 to £25.3bn in 2017-18.

Meanwhile capital receipts, gained for example from the sale of council property, fell from £3.6bn in 2016-17 to £3.3bn.

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