George Osborne’s Autumn Statement last year committed the government to changing rules which currently prevent capital receipts being spent on services.

And now the Department for Communities and Local Government has released guidance which restricts the spending to a number of areas – including digital – related to efficiency.

A list of projects which could generate qualifying expenditure, the guidance included: “Driving a digital approach to the delivery of more efficient public services and how the public interacts with constituent authorities where possible.”

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Other projects could include investment in service reform feasibility work, projects which involve service sharing, including procurement, and improving systems and process to tackle fraud and corruption.

Setting up commercial or alternative delivery models to deliver services more efficiently and generate revenue is also included in the list.

Councils will be required to draw up new efficiency strategies in order to make use of the new powers.

These should list every project which plans to make use of receipts generated from capital sales, along with a cost/benefit analysis.

From 2017-18, the strategies will be required to include an assessment of whether projects approved in previous years have delivered the predicted savings.

The new powers will come into force in April, and councils will be barred from using receipts from capital sales made before that date.