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How the Council's budget works

01 September 2022
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How the City Council's budget works

The City Council has a very wide range of responsibilities for delivering services in the city, supporting Plymouth’s residents and championing the city’s interests.

We deliver more than 300 services – as diverse as bin collections, protecting vulnerable children, providing libraries, making planning decisions, attracting investment and jobs in the city, providing leisure facilities, providing parking, maintaining roads and pavements and looking after Plymouth’s parks and green spaces.

These services are broadly split into two types:

Those that are required to provide by law (statutory services)

These include:

  • providing education services
  • children’s safeguarding and social care
  • adult social care
  • waste collection
  • planning and housing services
  • road maintenance
  • providing a library service.

Those that we provide for the benefit of city residents but are not required to by law (discretionary services).

These include most other services such as cutting grass, maintaining parks, providing leisure facilities and events and collecting garden waste.

We have two very separate budgets that support these services: one for ‘revenue’ and one for ‘capital’.

We receive separate funding for our revenue and capital budgets and have to separate the income and spending on revenue activities from the income and spending on capital activities.

REVENUE

We have a budget of just under £200 million to provide the hundreds of services we deliver day-to-day for Plymouth, as well as our running costs such as salaries and wages, fuel, utility bills and contracts with those who provide goods and services for us.

The money for our revenue budget comes from:

  • Council Tax
  • Charging users for the services
  • Government grants
  • A proportion of local Business Rates.

CAPITAL

This is the money we spend improving the council’s assets and Plymouth infrastructure such as road improvements, improvements to schools, delivering new assets such as The Box and purchasing assets such as land and buildings.

The money for capital expenditure comes from:

Income sources such as capital receipts (from selling land or buildings)

  • Borrowing
  • Contributions from developers to contribute to local infrastructure when we agree planning permissions (section 106 agreements).
  • Specific grant funding.

We have to separate capital and revenue in all our financial activities.

Capital and revenue are closely linked

Even though they must be kept separate, there are links. For example:

  • Using capital funding to invest in something that will save us revenue money in the longer term eg energy efficient boilers or solar panels that save on utility bills.
  • Purchasing an office block with capital funding in order to help local businesses get off the ground while also raising income for our revenue budget through rent
  • Building new toilets with capital funding requires revenue spending for cleaning, maintenance and utility costs.

An example would be refuse collection vehicles. The purchase of vehicles for rubbish collection would come from capital budgets, while the running costs such as fuel and maintenance, as well the staff costs, comes from the revenue budget.

OUR CURRENT CAPITAL AND REVENUE BUDGETS

Revenue

Our revenue budget for 2022/23 is £198 million.

Around 70 per cent of our total revenue budget is spent on statutory social care services for vulnerable children, the elderly and adults needing care and other support.pie chart showing 70 per cent of revenue spend is on social care

The remainder goes on the hundreds of day-to-service services we provide including street cleansing, bin collection, parks maintenance and running libraries.

Staff costs generally come from revenue funding.

image showing how we spend our revenue budget

Capital

Our capital budget for 2021 to 2026 includes around £344.7 million worth of projects that help secure and create jobs for Plymouth residents, help provide more homes, improve the transport network in the city and reduce Plymouth's carbon footprint.

For example:

  • the new crematorium currently being constructed will replace existing facilities, providing a better experience for families, greater efficiency in running costs, less energy consumption and opportunities to raise income.
  • Road schemes such as the Forder Valley Link Road that help keep Plymouth’s transport network keep up as we help provide new homes and jobs for the city.
  • Capital investment in modern street lighting systems will help our reduce energy bills which are paid for through our revenue budget.