Abstract: The study aims to identify the main changes taking place in the finance of local governance in the UK, and to assess three key aspects of the changing system: the sources of finance for contemporary local governance in the UK; the mechanisms for allocating finance; and procedures for controlling the financed organisations. The project has two main components. First is the construction of a detailed model of local finance in the UK, based on data for local governments, on the rules governing the allocation of local finance, and on data for a representative sample of households. This model is then used to describe how the pattern of local finance and its impact on the population has changed over the past decade. The second component addresses issues of targeting and control in the context of the new institutions and institutional relationships developing in the field of local governance, based on case studies of three policy areas: education; community case; and housing. Case studies are based on in-depth interviews with individuals involved in the process of local financial allocation and control, looking at the issues from a range of institutional perspectives.