Controlling Local Government Spending: The Implementation and Impact of Capping Council Taxes

Abstract

The level of local fiscal autonomy is widely regarded as an important indicator of the state of central-local relations and the capping of council tax increases has proved to be one of the most contentious of all of the constraints placed on local authorities by UK central government. Over the last decade the devolved administrations in Scotland and Wales have moved away from capping in favour of a more consensual approach. This decision reflects the difference in scale and nature of their policy communities and appears to have been at least as successful in controlling increases in local taxes as the more directive, top-down strategy favoured by policymakers in England. The current UK government's proposals to promote local referenda rather than ministerial diktat as the means of controlling council tax levels represents a potentially important new but as yet unproven approach.

Key Words:

• Local government
• council tax capping
• intergovernmental relations
• devolution