![]() The Government then distributes the money back to local authorities as Formula Grant.įurther details about how business rates are individually assessed can be found on the website of the Valuation Office. ![]() Although they are collected locally by district and borough councils, the money raised is then passed to central government. They are the tax on business premises set by central government. Business ratesīusiness rates (17%) are also known as non-domestic rates. General grant and business rates are added together to make up the Formula Grant, which is then distributed to local authorities using a complex formula. Formula Grant is largely funded by local business rates income (which is ultimately collected for central government). This is known as the Revenue Support Grant or Formula Grant. Local authorities and schools would normally only spend this allocated grant money on the specified purposes.Ī general grant is also paid by central government to local authorities. Specific grants are provided by central government to pay directly for individual services, such as running schools and helping vulnerable people with their housing and accommodation needs. This is made up from ‘specific’ grants (54%), and a general grant (7%) for local authorities and the police: The biggest single amount that local government receives is from central government. ![]() However, the local funding received by individual authorities varies significantly depending on the local tax base for council tax, the demography of local service need and the services provided by different types of local authority. Overall, local government spending is paid for by three main sources: These include county councils, district councils, London and Metropolitan authorities, and police and fire services. Local government spending pays for many different types of local authority. Local authorities spend the majority of this on providing schools, social services and maintaining roads, but they also provide many other services. Local government spending amounts to about 27% of all public spending.
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