The Concise Oxford Dictionary of Politics (154 page)

 
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The revenue raised by elected
local government
. It includes local taxation, national grant subventions, local government service user charges, and loan capital funding. Variations are commonly rooted in the historical development of the role of local government in the political system, and agendas for reform are generally bound up with prescriptions for that role.
Direct local taxation is levied either on property or on individuals. The former is dependent upon property valuations either for rental or sale, of which the UK rates and the council tax respectively have been prime examples. Local tax on individuals may be levied at a flat rate—a
poll tax
—or progressively in accord with income on lines similar to national systems of income tax. Property-based taxation, present for much of their histories in both the United States and the United Kingdom, is, however, more common and symptomatic of states in which property ownership was deemed necessary for the granting of political rights, such as the vote, and in which the principle of limited government is deeply embedded in political culture. Individual-based local taxation has tended to be introduced in states as individual citizenship rights have developed more independently of property ownership. In some countries local taxation is levied indirectly in the form of sales taxes and may serve as a supplement to direct taxation.
National grant subventions vary primarily in three ways. First, a subvention may be made from the national budget as part of a discretionary process of public expenditure, or through the ear-marking of a particular tax, the proceeds of which in any year will go to local government. Secondly, a subvention may be made in the form of a
block grant
to cover a number of services, or as a grant specifically in aid of a particular service. Thirdly, a subvention may be granted
post hoc
on the basis of a percentage of expenditure already carried out by a local authority, or prior to expenditure in accord with a formula-defined calculation of need. Earmarked national taxes for local use have become markedly less common as budgeting has become more complex, and fiscal crises have been experienced, leaving governments with a greater desire for discretion in the usage of national taxes. Specific percentage grants are most commonly used in aid of new services, in which case central government wishes to target money to the service and reward those local authorities who show more commitment by spending more. Needs-based grants, often introduced when services have been under local authority control for some time, place a higher priority on helping to equalize levels of service expenditure in relation to need between rich and poor areas. Block grants, theoretically, offer a local authority greater discretion as to how money will be spent whilst at the same time offering central government greater control over the aggregate amount.
Service user charges may be subsidized or set at market levels. The first type has been common in charging for the provision of social services such as housing and health care, whilst market charges have been more common for utilities such as gas and electricity. Since the 1980s the general trend in Europe towards reducing public expenditure and encouraging market forms of supply has led to a reduction in subsidized user charges in favour of market charges with rebates, even on services specifically provided for the poor.
Local taxation, grants, and user fees provide the basis for revenue account expenditure on services. Capital funding may come from a variety of sources, including the private capital markets and government capital loan accounts, and then be repaid over a period of years. Rarely are local authorities' capital funding policies not regulated. In the UK, government since the First World War has strongly controlled both the purpose and amount of loans sought.
Historically, local taxation has been a principal source of finance where local independence against state formation is strongest, an appropriate local resource base exists, and services provided have been considered to be primarily of local interest. Both the United Kingdom and the United States reflect this pattern, with even the level of local taxation in the United Kingdom being left in local hands until rate-capping was introduced in 1984. Where the concept of the nation-state is stronger, as in France, local taxation has been much less important than national grants, and in the Third World the lack of local resource bases leaves localities highly dependent on central funding. The expansion of local government responsibilities across North America and Europe in the twentieth century as part of increased state intervention has necessitated increased central funding both to supplement local fiscal bases under severe pressure, and to reflect the national importance of the services that local government has undertaken. On the assumption that he who pays the piper calls the tune, many analysts have concluded that regulation of capital funding and increased central revenue funding has inevitably meant increased central control of both local finance and policy since the 1970s. However, the centralization thesis assumes unrealistically that the centre can control policy as well as finance. Nevertheless, the drift towards central funding in the United Kingdom, as elsewhere, seems set to continue.
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The politics of subnational units. Liberal theorists have focused on elections, political participation in local government, party competition, the political executive, and local government administration, assessing each primarily in terms of the values of public interest, access, and accountability and executive and administrative effectiveness and efficiency.
By these criteria, the quality of British local democracy is patchy. Some improvements since the 1960s have been marked. The incidence of uncontested elections was dramatically reduced and the extent of voter turnout increased after the 1972 Local Government Act, which reduced the number of district authorities and gave all urban authorities an urban core. The citizens' charters for local government launched in the early 1990s attempted to enhance local government accountability to service consumers and local tax-payers. Party competition has been increased by these developments. Whilst the decentralized committee system still formally holds sway, many local authorities that are controlled by a single party have developed unofficial cabinet and party caucus procedures for arriving at policy. Similarly in administration, local government has been at the forefront of the new public management revolution in the late 1980s and early 1990s.
Such improvements and changes have to be considered in context. Turnout in local elections remains considerably lower than in national elections. The electoral system used—
first-past-the-post
—fails to give fair representation whilst in many areas also failing to deliver the supposed compensation of coherent single-party administration. British local authorities, moreover, tend to have bigger populations and lower councillor per head of the population densities than European counterparts. They remain comparatively distant to local citizens, and in the policy-making process local government élites have considerably more resources than interest groups. Local voting behaviour is primarily determined by perceptions of national party competition. Local politicians remain largely part-time, paid only expenses incurred in council business. Executive coherence or dominating leadership over local government officers is difficult to attain in such circumstances. Reformers promote local electoral reform to gain representative results, smaller local government areas to foster localism, a vigorous local media to promote public interest in local issues, and the salaried payment of local politicians.
The
New Right
has conceptualized local politics in terms of the local market place for the provision of services. They have advocated market solutions to service delivery problems and the contraction of local government in favour of a range of private, voluntary, and quasi-governmental agencies at a local level. A range of agencies, collectively entitled local governance, has risen to replace the monopolistic control over service provision of elected local government. To their friends these are efficient service deliverers, to their enemies they are unaccountable
quangos
through which the Conservative Party, which by 1994 controlled almost no local authorities in Britain, could perpetuate their policies and their people. One motivation for the
poll tax
was to increase awareness of the true costs of local government, and hence make citizens vote for just what they were prepared to pay for. In the end it had the opposite effect as central taxes were transferred to paying for local services in a vain attempt to relieve the unpopularity of the tax. The episode ended with local government weaker than when it began.
Radical writers have seen elected local government more in terms of a wider local government system, conceptualized often as a local state. They have taken a number of different views of the development of local politics. For example, a thesis advanced by Peter Saunders in
The Dual State
argued that the capitalist state had segregated itself according to social investment and social consumption functions, the latter of which were located in the local state, primarily provided by elected local government, but also by the National Health Service and other voluntary and quasi-governmental agencies, because they could be most efficiently tailored to ameliorating proletarian need by being located close to it. Hence, it may be argued that local politics has moved from being fordist to post-fordist. However, as long as local politics moves its focus away from elected local government into unelected agencies where it is easier for business interests to predominate, the concerns of critics may become increasingly hard to meet.
The format of local politics elsewhere is heavily shaped by the degree of
federalism
. Unitary states such as France tend to have weak local politics (although in France this is tempered by the custom of national politicians doubling up as mayors of their local commune). Federal states have strong local politics. The autonomy of local politics in the United States from interest-group pressures has long been controversial: see also
community power
;
pluralism
;
machine
.
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