paying for local services

• Local councils and county councils require funding to provide essential public services such as education, social care, and waste collection.

  They generate income through four main sources:

  1. Council Tax
  2. Business Rates
  3. Central Government Grants
  4. Income from Charges and Fees
• 1. Council Tax

  • A local tax collected by district, borough, and unitary authorities.
  • The government sets the maximum amount a council can charge, which can be capped.
  • A portion of council tax is used to fund services such as:
  • County council services – Police, fire service, schools.
  • Parish council services – Maintenance of parks and local facilities.
  • Every household must pay based on the property’s market value.
  • Wealthier areas contribute more than lower-income areas.
• 2. Business Rates

  • A tax paid by businesses, based on the open market rental value of their premises.
  • Set by the central government, but councils have some control over spending.
  • Local Government Finance Act 2012 allows councils to keep half of business rate revenue.
  • This encourages councils to attract and support businesses to increase local income.
  • If a business closes, the tax reduces.
• 3. Central Government Grants

  • Annual funding given to local councils by the government.
  • Some grants must be used for specific services like education and social care.
  • The amount allocated is based on area needs and population size.
  • Austerity measures (2010-2015) led to a 37% reduction in grants, forcing councils to plan funding carefully.
• Income from Charges and Fees

  • Councils charge fees for specific services to generate extra income.
  • Examples include:
  • Parking fees
  • Bulky waste collection
  • Leisure centre entry
  • Some councils charge rent for social housing, but must also maintain properties to a "decent home" standard.
  • Certain services (education, elections, libraries, and standard refuse collection) cannot be charged for.
• Explain one way that encouraging the development of local businesses and enterprise would benefit local government funds or income. (2 marks)

  Local government funding is boosted by local business rates. By encouraging new business and enterprise they are increasing their income.