The quiet return of equalization alongside incentive in the English local government finance system

Abstract

Local authority retention of 50% of business rates revenue was introduced in England in 2013–14, to be increased to 100% in the next few years. This signalled a move away from formula-based grant funding towards a funding system based on economic incentives. However, the 2016–17 settlement includes adjustments that indicate that equalization imperatives remain part of the policy toolkit. Given the complexity of the influences on local authority funding, these could maintain a considerable role when the new system is introduced.

Keywords:

• Business rates
• equalization
• local government finance
• needs assessment

Acknowledgements

I would like to thank Professor John Stewart and two anonymous reviewers for helpful comments on the first draft of this paper.

Additional information

Notes on contributors

Mark Sandford

Mark Sandford is a Senior Research Analyst in the House of Commons Library, London, UK.