A tariff is placed on any authorities it deems need less than the 50% of business rates sent to the Treasury, whereas for authorities judged to be struggling a ‘top up’ will be added to that 50%. To calculate the amount returned to authorities, the government applies either a ‘tariff’ or ‘top-up’ when providing funding. Since reforms in 2013/14, local authorities have kept 50% of the business rates revenues raised locally, while the grant they receive from central government has been adjusted to compensate those who generate less locally-raised revenue. – with 2% from the social care precept and the remaining 3% for discretionary spending.īefore 2013, business rates revenues were collected locally and then sent to the Treasury, which redistributed the revenues to local authorities through central government grant funding. Most recently, the government allowed local authorities to raise this again, to 5%, for authorities with social care responsibilities 3 Theresa May’s government increased this to 3% for 2018//20. Sandord M, Council tax: local referendums, House of Commons Library, 4 January 2023, The Localism Act 2011 – which came into effect in 2012/13 – included a clause that prevented local authorities from raising council tax rates by more than 2% annually without holding a referendum. Local authorities raised 30% more council tax, in real terms, in 2021/22 compared to 2009/10. While grants from central government were cut, rates of council tax, set by individual councils, were allowed to increased. Though even including Covid grants, the fall in income was still 21% in real terms between 2009//22 without, the fall was 31%. This downward trend was reversed in 2020//22 as central government made more grant funding available to local government in response to the pressures of the pandemic. The fall in spending power is largely because of reductions in central government grants. Local authority ‘spending power’ – the amount of money authorities have to spend from government grants, council tax and business rates – fell by 17.5% between 2009//20, before partially recovering. How has local government funding changed since 2010? OECD, OECD Fiscal Decentralisation Database, 7% of the UK's taxes were collected, or intended to be collected, locally in 2014, compared to 12% collected locally or federally in Italy, 32% in Germany, and almost 50% in Canada. In 2018, every other G7 nation collected more taxes at either a local or regional level. Local government in England has limited revenue-raising powers compared to other wealthy countries. Unlike central government, local authorities cannot borrow to finance day-to-day spending, and so they must either run balanced budgets or draw down reserves – money built up by underspending in earlier years – so as not to exceed their annual revenue. In 2019/20 (the last year before emergency Covid funding), local authorities in England received 22% of their funding from government grants, 52% from council tax, and 27% from retained business rates. business rates – a property tax levied on business premises.council tax – a property tax levied on residential properties.government grants – money from central government for local services.Local authorities have three main sources of revenue: How is local government funded in England? Local authorities in England deliver social care for children and adults, ‘neighbourhood services’ such as libraries and waste collection, and some aspects of transport, housing and education.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |