Public Affairs 3 - Controlling Money - Flashcards in Other Other

What is capital expenditure?

A share of a local authority's annual budget spent on building and repairing infrastructure, such as roads, schools, care homes, and libraries

1 of 27

What is revenue expenditure?

A share of a local authority's budget spent on day-to-day running costs of schools, libraries, offices, and other services

2 of 27

How is revenue expenditure financed?

- Central government grants
- Council tax
- Business rates
- Fees, charges, and reserves

3 of 27

What are the sources of capital finance?

- Prudential borrowing
- Supported capital expenditure
- Capital receipts
- Capital grants
- Private sector investments
- Local lotteries
- Local strategic partnerships

4 of 27

Define prudential borrowing

Each council may borrow up to an affordable figure in line with the Prudential Code endorsed by the Chartered Institute of Public Finance and Accounting. Councils repay borrowings from own resources without government support.

5 of 27

Define supported capital expenditure

Councils may borrow to finance capital spending with central government support - with funds available to help them repay loans and interest.

6 of 27

Define capital receipts

Money raised by selling capital (land, buildings) divided into useable and reserve parts. Councils must set the latter aside for specified uses, including repaying existing debts.

7 of 27

Define capital grants

Traditionally come from government departments, public bodies distributing national lottery money, or hybrid arrangements combining borrowing with grants.

8 of 27

Define private sector investments

Often 'in kind' offers, such as development land and/or funding for capital works, such as road access/traffic management, from a private company in exchange for ability to recoup investment at a latter date by running profit-based business relating to la

9 of 27

Define local lotteries

Councils may run lotteries under conditions outlined in the National Lottery Act 1993.

10 of 27

Define local strategic partnerships

Introduced by the 'Big Society' scheme, these boost cooperation between councils and agencies over wider geographical areas, to avoid duplicating services by adopting a 'whole area approach'

11 of 27

What are billing authorities?

Councils that send out bills to households and collect the proceeds to be distributed between themselves and neighbouring authorities. In two-tier areas, this falls to districts or boroughs.

12 of 27

What are precepting authorities?

All types of authority entitled to issue precepts (instructions or orders) to their billing authorities asking for shares of council tax proceeds. In two-tier areas, this applies to billing authorities themselves. In unitary areas, there are generally sti

13 of 27

What do councils do when they go 'bankrupt'?

Councils cannot technically go bankrupt but they can issue a Section 114 notice (Birmingham City Council 2023) which indicates their forecast income is insufficient to meet its forecast expenditure for the next year.

14 of 27

What four things is the chancellor responsible for?

- Overseeing government spending by managing fiscal policy - raising or lowering taxes and investing in public services
- Managing national debt - the level of borrowing needed to top up tax revenues to finance public spending
- Promoting economic growth

15 of 27

What is the Office for Budget Responsibility?

A quango that published independent economic forecasts and comments on likely impacts on jobs and inflation of government budgetary decisions.

16 of 27

What is the budget speech?

A speech designed to:
- forecast short to medium-term movements in the economy and review its performance in the previous 12 months
- announce changes in direct and indirect taxation and spending
- announce new taxes, tax breaks, and/or benefits to financ

17 of 27

Define recession.

Economic term to describe rapid economic slowdown or negative growth. Technically it refers to a period of two successive quarters during which the economy has shrunk - consumers have stopped spending, sales of goods and services have dwindled, and manufa

18 of 27

Define inflation

Rises in the price of goods and services from one month to the next. This is calculated using either the Consumer Price Index of Retail Price Index, which monitor fluctuations in values of notional 'baskets; of goods containing items regularly bought by t

19 of 27

Define Gross Domestic Product

Total profit from all goods and services generated in Britain in a financial year, irrespective of which state benefits from them.

20 of 27

Define interest rates

Instrument of monetary policy used to promote saving and investment, and reduce consumer spending. Since the 1980s, raising interest rates has been the preferred method of controlling inflation.

21 of 27

Define direct taxes.

Umbrella term for taxes such as income tax and corporation tax, taken directly from individuals pr companies, normally at progressive rates determined by their income levels.

22 of 27

Define indirect taxes.

Embedded in prices of items bought by individuals or companies. VAT and duties on alcohol and tobacco, for example.

23 of 27

What is the monetary policy committee?

Committee of the Bank of England that meets monthly to decide whether to raise or lower interest rates, based on the previous month's inflation figures.

24 of 27

What is a single market?

A trade bloc that allows the free movement of goods, services, capital, and people across its member states (the EU). The EU has a single market which includes its 27 member states plus Norway, Iceland, and Liechtenstein.

25 of 27

Who will the UK primarily negotiate with having left the EU?

- European Commission
- European Council
- Council of the European Union
- European Parliament

26 of 27

What does free trade involve?

Trade between countries which are free from tariffs, quotas, or other non-tariff barriers.

27 of 27

Get Revising

Public Affairs 3 - Controlling Money

Other cards in this set

Card 2

Front

Back

Card 3

Front

Back

Card 4

Front

Back

Card 5

Front

Back

Comments

Similar Other resources: