A modern day morality tale

By Paul Wheeler | 02 April 2015

Fair funding for local government is a bit like military intelligence – a good idea but frequently difficult to achieve in practice.

Part of the problem is the complexity that surrounds all elements of local government finance. Ever since the collapse of the poll tax in 1990, successive governments have made piecemeal changes culminating in a funding system which no-one understands and for which the law of unintended consequences could have been invented.

First some background: of the £136bn that local government receives approximately £71bn comes from government grant including Revenue Support Grant, Council Tax for £22bn, Business rates (of which more later) accounts for another £16bn and a sizeable £27bn comes from fees, services and other income (source: Audit Commission).

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