Capital expenditure and financing: provisional outturn (2018-2019) and budget estimates (2019-2020)

This publication contains the 2018-2019 provisional outturn and 2019-2020 budget estimates for local authority capital expenditure, financing and prudential indicators on local authority external debt and the capital financing requirement.

Data Interpretation

Scottish Government Grant figures are the provisional amounts of expenditure funded by grants received from Scottish Government and estimates used by the local authorities when setting their budget. Full details of the capital allocations to local authorities from Scottish Government for 2018-19 and 2019-20 are given in The Local Government Finance Circular 2/2019: Settlement for 2019-2020.

The Chartered Institute of Public Finance and Accountancy (CIPFA) Prudential Code sets out a framework for a local authority to demonstrate its capital investment plans are affordable, prudent and sustainable. One of the prudential indicators is the Capital Financing Requirement (CFR). The CFR represents the amount of capital expenditure a local authority has determined should be met from borrowing with the repayment of that borrowing to be met from future local authority revenue budgets.

The CFR only represents an authority's underlying need to borrow to finance capital expenditure. The actual Total External Debt may be less than the CFR where a local authority has chosen to utilise internal cash reserves rather than borrow externally; or the Total External Debt may exceed the CFR where a local authority has chosen to borrow in advance of actual capital expenditure.

When looking at trends over time, comparisons should be made on a like for like basis. It would not be unreasonable to compare Final Outturn to the Provisional Outturn to draw conclusions, however this data collection is still relatively new and there isn't enough data available to conclude whether any differences are random variation or if there is a systematic bias in the data collection that would need to be adjusted for. Other factors to consider when interpreting the data are:

  • Across years, changes in accounting standards may require a local authority to change how it accounts for capital expenditure or an asset. This can lead to discontinuity in the data collected between financial years. For example, revised accounting arrangements for PFI and PPP were introduced from 1 April 2009 – this changed the criteria for asset recognition and created a discontinuity in 2009-10 when local authorities recognised PFI assets, such as schools, as assets of the local authority.
  • The 'lumpy' nature of capital expenditure means that delays or changes to large capital projects at the end of the financial year can have a large impact on the final figures.

Related Publications

Revenue Provisional Outturn and Budget Estimates are published through the Revenue Expenditure and Financing publication, available at

The final, audited 2018-19 capital expenditure figures will be published in the Scottish Local Government Financial Statistics (SLGFS) 2018-19, scheduled for publication in February 2020. Previous SLGFS publications are available at



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