Reforming revenues – options for the future financing of local government

Despite significant changes outlined in the Budget and Spending Review in October 2021, a number of issues with local government revenue financing remain unresolved:

• Adequately funding councils to deliver services of an acceptable standard.
• Making the UK taxation system fairer for those who pay taxes.
• Giving councils more tools to encourage local growth.
• Enabling councils to deliver policies that have a wider societal benefit (such as reaching Net Zero).

It is key to address these in order to enable councils to deliver better services, encourage local growth and to deliver wider societal benefits, as well as to make the UK taxation system fairer.

This report, commissioned by the LGA, considers a number of options for local government revenue reform in light of these to contribute to the debate on a sustainable local government finance system. Options for reform are assessed against a common framework of principles; Fairness, Efficiency, Predictability, Transparency and Incentivising. The report considers options broadly categorised under the current system and reforming it, making national taxes local, and introducing new local taxes, and considers the feasibility of implementing such measures.

Read the report here.

Published January 2022