Council funding

• What percentage of public spending is local government responsible for?

  About 25%
• Where does most of the money spent by local councils come from?

  Grants and local revenue
• What has happened to council funding in recent years?

  Funding has been squeezed, leading to cuts
• What is capital spending in local government?

  • Spending on buildings and long-term projects
  • Councils may borrow money for this
• What is revenue spending in local government?

  • Day-to-day expenditure
  • Includes salaries and maintenance
• How is council tax determined?

  Based on property value from 1991
• How many bands are houses placed in for council tax?

  Eight bands
• Who is exempt from paying council tax?

  • Children under 18
  • Full-time students
  • People with severe mental impairment
  • Live-in carers
  • Diplomats
• What is a precept in relation to council tax?

  Money requested by authorities to collect
• Who sets and collects council tax?

  • Set by all councils and authorities
  • Collected by the billing authority
• What happens if the government funding is lower than expected?

  It may lead to tax increases or service cuts
• What are the sources of revenue grants for local councils?

  • Anticipated in finance statements
  • Ring-fenced for specific services
  • Dedicated Schools grant for schools
• What is the purpose of budget meetings in councils?

  To determine spending needs for services
• What is the maximum council tax increase without a referendum?

  3% increase
• What additional percentage can councils increase council tax for social care?

  2% additional increase
• What is the property tax paid by occupiers of commercial properties called?

  Non-Domestic Rates
• What are the sources of capital expenditure for councils?

  • Borrowing from banks
  • Capital receipts
  • Capital grants
  • Private sector money
  • Using revenue surplus
• What is the consequence of borrowing for capital expenditure?

  Interest must be paid on the loan
• What happens if councils use capital receipts?

  They lose potential interest from the sale
• What is the implication of selling an asset for councils?

  It no longer generates income
• What are the revenue implications of using different funding sources?

  • Borrowing incurs interest costs
  • Using revenue sources has immediate costs
  • Selling assets stops income generation