From Rates to the Poll Tax: Local Government Finance in the Thatcher Era

By Arthur Midwinter; Claire Monaghan | Go to book overview

CHAPTER THREE
The Control of Local Expenditure

THE LOCAL EXPENDITURE NETWORK
Prior to the reorganisation of local government in 1975, the fiscal environment was one of growth in expenditure and central grants, with the assumption that local authorities would themselves be the main mechanism of service delivery. This financial trend was interpreted as increasing central control, as local authorities became more dependent on central grants. The Wheatley Report concluded that this had a damaging effect on the independence and initiative of local authorities, whilst the Layfield Committee felt that the process of centralisation was even more marked in Scotland than in England and Wales.These issues were addressed in a pioneering study by Edward Page ( Page, 1978) which put the financial arguments into a political and administrative context. His thesis was that differences in structure and process could be expected to result in variations in output. In Scotland, the existence of a single government department with responsibility for local government, a single local authority association, and a small number of authorities with a pattern of Labour dominance in urban areas and Independent dominance in rural areas, were all factors seen to be important. Page, however, was 'rehearsing' the arguments which had been made already in official reports. Layfield ( 1976) had noted that the Scottish Office has a detailed knowledge of local strategies, circumstances and resources. So too, did the Central Policy Review Staff ( 1977). Layfield identified three financial characteristics which pointed to greater central control:
local government receives a greater proportion of its total expenditure from central funds than in England and Wales;
the assessments for distributing funds left greater scope for influence by ministers than the formula based system in England;
the level of capital expenditure in Scotland is higher and is subject to more stringent control than current expenditure.

We would argue that none of these points demonstrates that central control is greater. Firstly, the level of grant varies between Scottish authorities in

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From Rates to the Poll Tax: Local Government Finance in the Thatcher Era
Table of contents

Table of contents

  • Title Page i
  • Contents iii
  • List of Tables v
  • Acknowledgements vii
  • Chapter One - the Fiscal and Budgetary Environment 1
  • Chapter Two - the Conservative Agenda 29
  • Chapter Three - the Control of Local Expenditure 38
  • Conclusion 61
  • Chapter Four - the Reform of Local Taxation 63
  • Conclusions 97
  • Chapter Five - the Politics of Efficiency 99
  • Chapter Six - the Limits to Financial Reform 123
  • Conclusions 135
  • References 140
  • Index 149
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