LGIU@40 Collection: Finance

Finance is a central theme of our LGIU@40 campaign about the future of local government. This collection of resources explores the risks and opportunities for local government finance, and includes major research reports, articles, member-only briefings and our Global Local newsletter.

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LGIU’s 40th anniversary comes at what feels like a critical juncture for local government. Longstanding challenges such as finance and increased demand on services and infrastructure are butting up against more existential threats to communities like climate change, populism and unregulated, poorly understood technology.

Our LGIU@40 campaign, while utilising our unrivalled experience of working with local government is very much about the future. Identifying three core themes – participation, trust and finance – we have been working extensively with our members and the wider sector on a set of new ideas for how local government could work better in the future. A manifesto – to be published at the end of the year – will provide a blueprint for how we can move from aspiration to action and build the foundations that local government needs to navigate the challenging times we all face.

Local government finance systems are markedly different in different countries. Local government finances and how they are funded will be pivotal in navigating the challenges posed by the many global interconnected and escalating issues, such as climate change, economic instability, and public health emergencies. In this context, achieving financial sustainability becomes an imperative for local governments as they grapple with the multifaceted nature of the permacrisis. A sustainable approach to local government finance that focuses on integrating economic, social, and environmental considerations will need to be explored in order to develop long-term resilience in local government and communities.

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Local government finance 💰

This edition highlights innovative practice and shares resources to help you make the best of your budget. We go beyond the bottom line with findings from LGIU’s Local Democracy Research Centre, which is currently exploring local government funding and finance systems from around the world.

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Latest finance research from the Local Democracy Research Centre

The State of Local Government Finance in England 2024

This report is drawn from the LGIU’s 11th annual survey of senior council leaders, chief executives, chief finance officers and cabinet members for finance, and provides a detailed picture of how the sector views the current financial position of local authorities. Read here.

Learning from local government finance across the world: Proposals for improving the financial resilience of local government in England

We know local government finance in England is not fit for purpose, but how can we fix it? The proposals in this paper draw on our in-depth research into local government systems in Germany, Italy and Japan – part of an ongoing international comparisons project. Read here.

What is the state of local government finance now?

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Councils on notice: does a section 114 mean bankruptcy for local government?

Last week Birmingham City Council issued a section 114 notice, joining a number of other authorities that have failed to balance their books over the past two years. With other authorities expected to follow this year and next, this article examines what it means for local government. Read here.

IFS Deaton Inequality Review: the distribution of public service spending

In May 2019, the Institute for Fiscal Studies (IFS) launched the IFS Deaton Review on Inequality, described as a “five-year study of the inequalities in society”. This latest briefing covers ‘The distribution of public service spending’ report, published in May 2023. Read here.

Insights from the 2024 Budget for Irish local government: Is it happy days?

This briefing examines the local implications of the 2024 Budget, which will not generally be covered in the national media. Those parts, like housing, planning, transport, and climate change policy, will have a significant impact on the local government sector in 2024 and beyond, as we explore in this overview of the budget announcement. Read here.

Best Value Regime – supporting sustainable local government

This briefing summarises the Audit Commission’s Best Value in Scotland report, which looks at the impact of twenty years of auditing Best Value and the Commission’s plans to overhaul the current Best Value regime to help strengthen the financial sustainability of Scottish councils. Read here.

Councillors at the casino? The differentiated landscape of local council financial strategies in England

Professor Andy Pike from Newcastle University explores how financial innovation has become part of the repertoire for local councils struggling to close funding gaps in England. He explains how these practices are connected to characterisations of ‘councillors at the casino’ running risks with taxpayers’ money and taking a public service gamble, jeopardising essential service provisions. Read here.

Global Local: Local government finance

This special edition of Global Local includes brand new research from the Local Democracy Research Centre, international lessons on local government finance, resources, toolkits and inspiring practice in local government finance. Read here.

How can we learn from others

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A system wide analysis of local government finance in Italy

The LGIU’s Local Democracy Research Centre is exploring how local government is funded in different countries as part of ongoing work to develop new ideas and solutions to tackle long-standing problems. This report takes an in-depth look at the system in Italy. Read here.

A system wide perspective of local government finance in Germany

This report focuses on the local government funding system in Germany. It is part of ongoing research by the LGIU’s Local Democracy Research Centre comparing funding systems in different countries. Read here.

Local Government Finance in Germany – different but equally challenged

This article explores how the recent work of LGIU’s Local Democracy Research Centre on the finance system in England and Germany, highlights the clear differences in structure, responsibility and self-financing capacity when compared to the system in Ireland, and points to challenges which will have a resonance with Irish Elected Members and Officials. Read here.

The limitations of local government finance in England: A system wide perspective

For the last ten years we have been asking council leaders, chief executives, cabinet members for finance and section 151 officers their opinions on how local services are financed in England. This new report is the next step in our ongoing research into how local government finance could be different and better. Read here.

Funding the future of local government, an Australian perspective

Communities and governments worldwide are facing a challenging future due to inflation, inequality, disruptive technology, geopolitical tensions, and climate change. In this briefing, Professor Richard Eccleston from the University of Tasmania unpacks the increasingly challenging issue of local government funding in Australia. Read here.

Local government finance: a comparative study

The Local Democracy Research Centre has commissioned experts at the University of Northumbria, led by Dr Kevin Muldoon-Smith, to look at how local government is funded in different countries around the world. This is an introduction to that research with an overview to the funding systems in England, Germany, Italy and Japan. Read here.

Five international lessons for Scottish local government finance

To mark the launch of a research project on the State of Local Government Finance in Scotland, LGIU and Solace hosted a roundtable discussion with Senior Officers in Scottish local government to present five applicable local government finance lessons from LGIU’s international research. Read here.

Three key questions for local government finance in Scotland

To mark the launch of a research project on the State of Local Government Finance in Scotland, LGIU and Solace hosted a roundtable discussion with senior Officers in Scottish local government to give a “behind the scenes” picture of local government finance in Scotland. Read here.

Local Government in Ireland: Not as badly off as I thought it was….

LGIU’s Commissioning Editor for Ireland reflects on the recently published research on local government finance and funding in England, and wonders if the grass is not always so green. Read the article here.

What are the next steps?

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It is time for the UK government to fix the broken funding system?

In this think piece, Cllr Ray Morgan, Leader of Havering Borough Council, asks if it’s time to change the local government funding system across England in light of mounting pressure on the sector. He remarks that his own well-run council is now sounding the alarm bells during these testing times and offers some suggested solutions that might help make local government sustainable. Read here

South Tyneside’s cost of living intervention

From Covid-19 to the rising cost of living, local government have been frontline dealing with back-to-back crises. In this article, South Tyneside Council’s Leader, Tracey Dixon, outlines the intervention methods their council and partners are taking to try and help ease the financial struggles facing the most vulnerable in their community. Read here.

The South Tyneside Pledge: the power of many

Cllr Tracey Dixon, Leader of South Tyneside Council, shares the details of South Tyneside’s Pledge, a new community wealth building project which, at just 18 months old, has already boosted the borough’s economy by £3m. How have they done it? This article takes a look. Read here.

Sustainable approaches to local government funding will create resilient places

A sustainable approach to local government finance is the only way to ensure long-term resilience for local places and local communities, writes Jonathan Carr-West. Read here.

Mayor of Glen Eira – Moving the local government sector towards a more sustainable future

Cllr Jim Magee is the Mayor of the City of Glen Eira in Melbourne’s inner south. In his latest article for LGIU, he outlines the positive steps in local government reforms in the state of Victoria, Australia, but urges for more to be done to ensure the sector moves into a more sustainable footing. Read here.

We need a new way of funding local government in England

The financial distress of local authorities in England has its roots in a funding system that is broken, as Jonathan Carr-West told a Commons Committee last week. Read here.

Mayor of Glen Eira calls for major shake up of local government in Victoria

Cr. Jim Magee of the City of Glen Eira outlines the challenges for local government in Victoria and the need for change and funding reform. “Costs are increasing much quicker than local government can cover, and it’s putting services at risk.” Read here.

PB or not PB: question time for participatory budgeting

This briefing explores participatory budgeting, universally known as PB, specifically looking into the history of PB, how it is defined, and reviewing many studies of PB around the world. Read here.

Participatory budgeting – a third sector perspective

This briefing looks at the ways local authorities are involving communities in Participatory Budgeting (PB) and working to meet the Scottish Government commitment for 1% of local budgets to be subject to participatory budgeting by 2021. Read here.