Introduction
Local authorities fund expenditure on services through a combination of council tax receipts and government grants (including redistributed business rates). The relative amounts received from these two sources is known as the balance of funding.
The balance of funding varies hugely between local authorities. Some councils raise about half their revenue through the council tax. At the other end of the spectrum the figure is below 15%. On average nationally the figure is around 25%. This means that 75% comes from central government grant, a major increase from a low point of 41% in 1989/90, prior to the nationalisation of the business rate.
There are concerns in some quarters that the current balance of funding reduces local autonomy and accountability and hence contributes to voter apathy. In response to these concerns the Government in the December 2001 Local Government White Paper 'Strong Local Leadership - Quality Public Services'(http://www.local-regions.odpm.gov.uk/sll/index.htm) committed itself to establishing a high-level working group to consider in detail issues arising from the current Balance of Funding and options for change.
On 20 January 2003 Nick Raynsford announced that the review would start in April and published the Terms of Reference for the review (see http://www.odpm.gov.uk/news/0301/0004.htm for the press notice). Membership of the review's steering group and a date for the first meeting of 28 April 2003 was announced on 4 April 2003.
Papers presented to meetings of the review will be published here and on the Local Government Association web-site.
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Last updated on 10 April 2003
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