English councils spent £63bn on third parties last year
Third party expenditure by local authorities in England has outstriped inflation for the last three years, new figures have revealed.
The Local Government Third Party Spend Almanac, published by Oxygen Finance and EY, shows local government spent £63bn with third party suppliers in 2019/20. More than a third of this (37%) incurred within the vulnerable citizens category
The overall amount is an increase of 9.7% over the last three years, although there was a real term reduction in some areas.
Ben Jackson, CEO at Oxygen Finance, said: At the macro level third party overall expenditure is higher than inflation, but we can see that revenue funded local government activity is reducing, whilst capital expenditure is increasing.
Local government spending with third party suppliers increased by an inflation busting 9.7% over the last three years, analysis has found.
However, the study of councils’ published data on all invoices over £500 found spending on services for vulnerable citizens had increased while spending on discretionary services such as leisure and culture fell in real terms. It concluded much of the increase was also driven by increased capital spending by the sector between 2017-18 and 2019-20, including from combined authorities.
The Local Government Third Party Spend Almanac, launched today by EY and Oxygen Finance, which compiles the data in its Illuminator tool, found local government had spent £63bn with external suppliers in 2019-20.