Traditionally, grants made up the bulk of funding for local councils in England. At least in principle, they were set each year, accounting for a council’s spending need and their council tax base. This system of equalisation offered substantial insurance to councils – if their needs increased or their tax base decreased, they would get additional grant-funding to compensate. But it also meant councils had few financial incentives to constrain spending needs or boost their local economy and tax base.
Authors
Associate Director
David is Head of Devolved and Local Government Finance. He also works on tax in developing countries as part of our TaxDev centre.
Comment details
- Publisher
- The MJ
Suggested citation
Phillips, D. (2015). Solution for the revolution [Comment] The MJ. Available at: https://ifs.org.uk/articles/solution-revolution (accessed: 29 March 2024).
More from IFS
Understand this issue
Are councils in crisis?
14 February 2024
Government spending has long been targeted at the poorest in our society
5 June 2023
The poor are failed most by our inability to reform local services
24 October 2022
Policy analysis
The IFS Scottish Budget Report – 2024–25
22 February 2024
Scottish Budget: Tax and spending in 2024–25
6 February 2024
Scottish Budget: The medium-term outlook and choices
6 February 2024
Academic research
Unfunded mandates and taxation
14 March 2024
What’s happened and what’s next for councils?
7 October 2021
Financing local police spending in England and Wales: fiscal federalism in practice
Since 1995, police forces in England and Wales have been able to raise revenues locally to supplement grants from central government.
21 February 2020