The object of this study is to evaluate the impact of central government's policy of placing limits or 'caps' on the expenditure of individual local authorities. Originally capping was introduced as a selective device, which applied to only a handful of 'overspending' local authorities each year. Since April 1991 these limits have applied universally, and are now arguably the most important factor in the local budgetary process. Most loacl authorities now effectively cap themselves by setting their budgets at the pre-announced expenditure limit. Indeed, aggregate local spending is now just 0.3% under what is permitted by the aggregate of the cap limits. This project aims to evaluate the effects of the capping legislation. It will examine the effect of both the selective capping regime that existed from April 1985 until March 1991, and the period of universal cap limits that has existed since. In particular the research will consider: Whether capping has led to a lower level of expenditure than would otherwise have been the case. In which services have these reductions (if any) occured. Is there evidence that spending reductions (if any) has led to reductions in quality or have efficiency savings been made?