Controlling Local Government Expenditure in Britain: The Experience of Rate Capping

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Abstract
Rate capping was introduced by the British Conservative Government in 1984 to impose a legally enforceable ceiling on the rating power of local authorities. It is a discriminatory measure. High-spending authorities, as assessed in accordance with current and historic data, are given annual rate limits by central government, with rights of appeal and negotiation. The process has generated great controversy, with some local authorities threatening municipal bankruptcy and all showing great reluctance to operate within the system. But the financial impact has so far been marginal: The government moved gingerly, and creative accounting has helped postpone financial difficulties.

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