New or additional charges upon local authority revenues

35.8Money raised by local authorities by way of council tax is not itself subject to the House's rules of financial procedure. However, the statutes relating to local government finance provide for the payment of Revenue Support Grant to local authorities, out of money provided by Parliament; and in practice Revenue Support Grant makes up a significant proportion of local authorities' income.1 There is no longer a statutory obligation on Ministers, when determining the amounts of grant to be paid, to have regard to the level of local authority expenditure or to the extent of local authorities' statutory powers and functions; but the Speaker has ruled that a Money resolution is nevertheless required for any bill which implies an increase in the expenditure of local authorities, on the ground that it is reasonable to expect that, in practice, Revenue Support Grant will take account of that expenditure.2

Footnotes

  1. The relevant statutory provisions are to be found in the Local Government Finance Act 1988 (which introduced Revenue Support Grant in substitution for the former Rate Support Grant), and in the Local Government Finance Act 1992 (which introduced council tax in substitution for the former community charge). The proceeds of non-domestic rating are partly retained by billing authorities or shared with other local authorities, but a central share is distributed among local authorities in conjunction with Revenue Support Grant; see Local Government Finance Act 1988, sch 7B (inserted by the Local Government Finance Act 2012).
  2. Speaker's private ruling, 6 December 1989; HC Deb (1989–90) 163, c 448. The same principle is applied to similar grants to local authorities payable out of Estimates, such as grants made under the Education Act 2002, s 14.