D.28 Local authority funding comes from grants from central Government, redistributed business rates, and local taxation (the Council Tax). The first two of these funding sources forms the Formula Grant, allocated to each local authority.
D.29 Every year, in the Local Government Finance Settlement, Formula Grants are calculated and allocated using mathematical formulae that are designed to measure the relative needs and resources of different local authorities. In 2006/07, for the first time, the Government moved to produce forward allocations of most grants into multi-year settlements, thus allowing better future budget Test planning by local authorities. The first full three-year settlement was for 2008/09, 2009/10 and 2010/11.
D.30 In 2010/11, about 57% of the budget requirements (excluding specific, targeted and area based grants) of South West local authorities were provided by Council Tax receipts. Among the nine English regions, this is the joint second highest proportion, and compares to an average for England of 48% (47.4%). In effect, this means that South West residents are required to bear a higher proportion of the cost of their local services. This is because the formulae used in the Local Government Finance Settlement assess the resources of the region’s population to be higher than elsewhere, and hence the region's councils can raise more revenue from their Council Taxbase. The taxbase is calculated as the total number of properties in an area, equivalised to Council Tax Band D.
Further information about the Local Government Finance Settlement is available on the Communities and Local Government website: Local Government Finance Settlement 2010/11, which includes the leaflet: A guide to the Local Government Finance Settlement.
D.31 Besides local authority funding, there are many other public expenditure funding streams that come into a region and its local areas, some of this directly from central Government, and some via non-departmental agencies. A full analysis and summary of all public spending can be found on the HM Treasury Statistics on Public Finance and Spending website, which includes the Public Expenditure Statistical Analyses (PESA) series.
