Service charges set out the amount you are expected to pay in return for the services the landlord (the Council) provides, as outlined in your lease agreement. This is, in effect, your contract with your landlord.
There are various service charge elements, and they should relate either to your building, to your flat or to your estate.
You will also hear about major works. These relate to separate major repair schemes which are consulted with residents before they take place, but also result in charges being made to leaseholders. Those charges are still legally service charges, however, they are generally referred to as “major works” as opposed to “service charges”, which cover the costs of day-to-day service provision.
The service charge is based on actual cost to the Council in delivering the services to your block and/or estate.