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Scottish Local Government Financial Statistics 2003-04
Section 2: OUTSTANDING DEBT
Local authorities often need to provide long term financing for capital projects (such as the building of schools, roads and leisure facilities). Borrowing allows local authorities a flexible, yet largely predictable, method of finance. The Scottish Executive monitors local authority borrowing.
Table 10 shows local authority debt totals for the general fund, trading services and the housing revenue account. These figures are supplied on a cash (and not an accruals) basis i.e. transactions are recorded in the period in which payment is made or received
General Fund
Debt on general fund services is divided into relevant and non-relevant debt, this is to allow the proper functioning of mechanisms designed to support debt costs associated with non-revenue generating, non-grant supported undertakings. The costs of servicing debt on relevant general fund services are supported directly through loan charges support within Aggregate External Finance (AEF). Revenue-generating, non-relevant debt is self supporting and the small element of non-revenue generating debt on general fund services that is not relevant for loan charges support within AEF is generally on programmes (e.g. the Social Inclusion Partnership Fund) supported through specific grants.
Trading services & Housing Revenue Account
The costs of servicing debt on local authority trading services (e.g. piers, harbours, slaughterhouses) are mainly met through the charges made for these services while the costs of servicing Housing Revenue Account (HRA) debt are met principally from income from rents and from Housing Support Grant.
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