Types of spending

People sometimes ask why we can invest in major projects (such as roads, schools and leisure facilities) when we are having to save money on day-to-day services. 

The reason is that we have different sources of funding and there are rules we must follow when we use them.

The money we get to build or buy new facilities and infrastructure is capital funding. This cannot be used to cover the ongoing cost of providing services, which is known as revenue funding. 

Revenue funding

The funding for ongoing, day-to-day services, such as providing social care, making planning decisions, collecting waste and recycling, comes from five sources.

Council Tax 

This provides by far the most of our revenue funding – about 80 per cent because we receive comparatively very little from the Government.

Government funding (Settlement Funding Assessment) 

This is made up of Revenue Support Grant,a payment from Central Government based on its understanding of the area’s need, and Retained Business Rates, a share of the Business Rates paid by all business in the borough and the council keep a share of this. 

The agreement provides about 20 per cent of the council’s revenue funding and is the lowest of all similar councils in the country.

Other Government grants

We can bid for small amounts of revenue funding that it can spend on specific projects. This money cannot be used for other activities than it has been granted for. 

Income from fees and charges

This is money from things like car parking charges, the fees you pay when you submit a planning application, hiring sports facilities or pitches. 

Generally, they are only used to fund the particular activity they are linked to – for example, Dinton Pastures and our other country parks are funded, and could only really be afforded thanks to, the car parking income they make.

Commercial activities 

We’ve been trying to generate more income from commercial ventures such as selling advertising space and running events. Currently these do not make much money, but we’re working on more ways and how we can develop this.

Capital funding

This is the funding for building new things, improving facilities or investing in long-term technology improvement. It includes things such as new or expanded schools, new roads and transport improvements, IT investment, new and improved leisure facilities.

 These projects are funded to:

• improve the local area
• meet the extra needs caused by housing development
• create long-term savings or income

The capital money comes from four main sources. You can find out more about this on the Local Government Association website.

Housing developers 

When new housing is built, developers must pay for new or improved infrastructure to meet the needs of the new communities. 

For example, a major development area may need schools, sports facilities and roads. These are paid for by developers. 

The money from developers can only be used to provide facilities, it cannot cover the running costs. 

Most of it must also be used for the specific housing development it comes from, although there is some limited flexibility.

Borrowing

We are allowed to borrow the money needed to build or buy new facilities or infrastructure.

There are strict rules on this, and we must be able to show how it will pay the money back and the interest. 

Borrowing can only be used for projects that will benefit the local community – it cannot fund purely commercial activities.

Government and other agency grants

We can sometime bid for funding for projects to provide new facilities or infrastructure. 

This funding can only be used for the specific project set out in the bid, often associated with a particular social/community benefit such as health and wellbeing. 

Examples of this are cycleways, bus lanes or sports facilities.

Sale of assets (land or buildings)

We can sell assets (land or building they own) and use the money to pay for new or improved facilities or infrastructure. This funding is known as Capital Receipts.