Legality and Locality: The Role of Law in Central-Local Government Relations

By Martin I. Loughlin | Go to book overview

5
OF TAPERS, TARGETS AND CAPS:
CENTRAL CONTROLS OVER
LOCAL EXPENDITURE

Writing in 1912, Edwin Cannanexplained how, in producing a new edition of his classic study on The History of LocalRates, he had undertaken the 'extraordinarily difficult task' of including an additional chapter onthe relationship between expenses borne by local rates and those contributed bycentral government grants.1'There are', he reflected,'probably not a dozen persons in England who could pass an examination on the principles which determine thedistribution between the various localities of the proceeds of the nationaltaxes allocated to them by the Local Government Act 1888, and the Actswhich have followed it.'2The arrangements, Cannan was to conclude, amounted to'eclecticism in excelsis'. 3 Cannan was scarcely alone in holding thisconviction. His views were, for example, echoed by none other than SidneyWebb, a man blessed with a remarkable ability to dig out the most obscure of details andsubject them to rational analysis. Writing at the same time as Cannan, Webb arrived atthe conclusion that the system of central grants in aid of localexpenditure is 'a chaos which practically no one understands'. 4

In the early decades of the twentiethcentury there existed a great multiplicity of grants allocated according to a range of differentialcriteria. 5 Indeed, the Royal Commission on Taxation in 1901 had concluded that one of the basic reasons for the lack of public demand for reform was the vastcomplexity of the system.6 Another reason perhaps was that,during this period, central grants contributed only around one-fifth of localexpenditure.7 As the burden of local expenditure increased during the 1920s, however, agreater proportion of that expenditure came to be met by central grants and, as a result,pressure emerged for the reorganization of the grant system. This was achieved inthe Local Government Act 1929 which replaced many of thespecific grants with a general grant. With the enactment of this general grant, the principle ofgrant allocation

____________________
1
E. Cannan, The History of Local Rates in England ( London, 2nd edn., 1912), v-vi.
4
S. Webb, Grants in Aid [ 1911]( London, 2nd edn., 1920),7.
5
It has been estimated, for example, that in 1918 local education was supported by 57 grants which were calculated by reference to different rules: D. N. Chester, "Centraland Local Government" ( London, 1957),170.
6
Report of the Royal Commission on LocalTaxation, Cd. 638 ( 1901),1.
7
C. D. Foster, R. A. Jackman and M.Perlman, "Local Government Finance ina Unitary State" ( London, 1980), 133 (Fig. 1.5.1).

-263-

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