Local Government Finance

Question 1

revenue funding?

Answer 1

Needed for day-to-day costs of running council i.e. buildings, light, heat, staff salaries.
Raised locally and from gov grants.

Question 2

Capital funding

Answer 2

Used for major projects with a life of a year or more i.e. infrastructure, computers

Question 3

How is revenue funding raised?

Answer 3

Mainly locally through Council tax- different bands, based on 1991 value.
Can also be raised via government grants.
Also through income from fees and charges.

Question 4

What is council tax?

Answer 4

8 bands- A-H
charged based on 1991 value of property
discounts given to singletons, students, those on low income

Question 5

how is council tax collected?

Answer 5

Each local authority sets their own rates
Unitary- bill sent out including fire and police. Authority collects an hands relevant sum to fire and police

two-tier- districts and boroughs collect and then give money to county council, fire and police and parish

Question 6

raising council tax

Answer 6

Any council wishing to raise by more than 2% must have a referendum.
Social care precept means they can add 3% for adult social care without ref.

Question 7

reserves

Answer 7

Must hold a reserve by law
but can be used to fund rev and capital spending
meant for emergencies i.e. flooding

Question 8

fees, rents, charges

Answer 8

council house rent- must be put back into council housing

car parking charges/ fines- only be used for transport issues

Question 9

gov grants

Answer 9

i.e. revenue support grant which is a top up from gov
dedicated schools and public health grants are ringfenced
concessionary bus fares grant
housing benefit grant

Question 10

business rates

Answer 10

centrally set, locally raised
50% to council, 50% to treasury
concern over 2019 increase which saw them rise to over 50% for first time.

Question 11

how is capital funding raised?

Answer 11

public works loans board- independent, set up by parliament to finance local authorities
Banks- will often lend as in the past local authorities have never defulted on a loan
Government- for specific projects i.e roads and schools
Lottery- i.e. heritage fund
selling capital- i.e. land/buildings
private public partnerships

Question 12

council budget

Answer 12

sets out how much will b spent, if any cuts to be made, if any increase to council tax
set by cabinet in leader and cabinet system
set by policy and resources committee in committee system
Must be approved at full council meeting