Education and social work were the services with highest net revenue expenditure, accounting for £5,520m and £3,528m respectively.

Capital expenditure is expenditure that creates the buildings and infrastructure necessary to provide services, such as schools and roads. Local authorities incurred £2,604m of capital expenditure in 2020-21. This was predominantly financed by grants and contributions of £1,322m and borrowing of £834m.

Usable reserves are local authorities’ surplus income from previous years which can be used to finance future revenue or capital expenditure. At 31 March 2021, local authorities held £3,924m of usable reserves.

When local authorities borrow money or use credit arrangements to finance capital expenditure, a debt is created which has to be repaid from future revenues.

In 2020-21, local authorities made debt repayments of £629m and at 31 March 2021 they had a total debt of £19,723m.