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The determinants of local police spending

IFS Working Paper W18/09

Since 1995, police forces in England and Wales have obtained the right to raise revenues locally to supplement central government grants in order to fund their activities. The extent to which they have used these local revenue-raising powers varies signi cantly across area and time. We seek to explain this variation in locally raised police revenues over the 2000s, unpicking the role of local differences in preferences, central government funding, the production of public safety given police inputs, and certain political economy features of the local decision making process. We find that around three-quarters of the variation in local revenues per capita can be explained by differences in incomes, prices and preferences. We also examine whether changes in service provision by other agencies spillover into the local demand for policing by affecting the local tax price of police activities.