Local Taxation in England and Wales

The growth in the amount of Government grants relatively to the growth of the amount of local rates is shown in Table B.

Many factors have contributed to the increase in the percentage shown in the last column of this table. Among them may be men tioned : the imposition by the State of new duties (e.g., education, housing) upon the local authorities; the insistence by the State upon the attainment of a higher standard of local administration than is deemed to be attainable without the giving of State assistance; the substitution, under the Agricultural Rates Acts, 1896 and 1923, of Government grants for proportions of the rates formerly payable by the occupiers of agricultural land ; the pro gressive development of means of communication between the sev eral localities, accompanied by the growth of a public opinion that certain services, formerly deemed to be predominantly of local interest, have become predominantly of national interest ; and the prevalence of the doctrine that, at least in the case of the cost of such predominantly national services, the incidence of national taxation is, as between persons of equal income resident in dif ferent localities, more equitable than the incidence of local rates. It will be seen on reference to Table A that the amount of the Government grants in aid of the cost of the services constituting Group II. in that table was not far short of the expenditure fall ing to be met out of rates in respect of that group.

At the present time (1928) the proportion of the Government grants to local authorities which is distributable through the local taxation account has fallen to less than one-sixth of the whole amount of those grants. Upwards of five-sixths of that amount has been made by Parliament distributable either (i.) on the basis that (subject to certain safeguards) the grant to a local authority in respect of a service shall be some prescribed propor tion (or part) of the expenditure by the local authority on the service, or (ii.) on some other basis which makes an increase in the amount of the grant depend directly or indirectly upon an increase in the expenditure on the service by the local authority.

This system, it is said, inflicts hardship upon the localities not able to afford increases of expenditure and is over-generous to and stimulates expenditure in localities well able to afford such in creases. Moreover, like the pre-1888 grant system, it involves Parliament and the Government departments to an increasing and undesired extent in the supervision in detail of some parts of the work of local authorities.

Rates for Public Local Purposes.

For the purposes of local rates for public local purposes, England and \Vales have been di vided by Parliament into rating areas, each of which is rated separately for the cost of the services administered therein by local authorities, so far as that cost is not met out of the receipts from fees, tolls, dues, rents, etc., and the Government grants already mentioned. The expression "local rates for public local purposes" includes all rates levied by local authorities, except (i) certain land-drainage rates and unusual rates—amounting in all to less than 1% of the total amount so levied—and (ii.) water rates levied only on consumers of water in respect of water sup plied to them ; and in the following part of this article the word "rates" must be read as meaning "local rates for public local pur poses" unless the context otherwise requires.

The number of rating_ areas is (in 1928) 1,804. This total com prises 29 metropolitan boroughs (including the cities of London and Westminster), 83 county boroughs (including cities such as Birmingham, Liverpool and Manchester), 255 municipal bor oughs not being county boroughs, 783 other urban districts, and 654 rural districts. In each of these rating areas the council of the borough or district—a popularly elected body—is the rating authority, charged, to the exclusion of every other body, with the statutory duty of making and levying rates of sufficient amount to meet not only its own expenses, so far as they are payable out of rates, but such part of the expenses of every other local au thority exercising jurisdiction within the area as may be payable out of the rates of the area.