England & Wales, Global Finance

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


Over the past 10 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. And the evidence revealed by these surveys – that there has been a major sustained failure to properly fund local services in England – has become undeniable.

So the question now is: how could local government finance be different?

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.

The research takes a whole-system approach, considering local government finance as a system operating within varied national contexts, including the constitutional and legal framework, politics, expectations, roles and responsibilities.

This first report is an essential assessment of how local government is financed in England, the historical context, the peculiarities of the system and the reasons it has come under sustained criticism. Over the next few months we will release reports on Germany, Italy and Japan, each of which will reveal more about the options available for funding local governments – useful not only to readers in England, but to anyone working in or interested in local government around the world.

By building our understanding of the different ways local services are funded across the world – especially outside of the English-speaking world – we can identify the most effective ways to ensure local governments work for their citizens.

Download the report

Further Reading

Local government finance: a comparative study is an introduction to the full research programme with an overview of the funding systems in England, Germany, Italy and Japan.


This research is part of a body of work that is informing our campaign LGIU@40: For the future of local government.

Together with our members and the wider sector we will be establishing a set of new ideas about how local government could work better and how we can build the firm foundations we need to navigate a turbulent and uncertain future.

Local Democracy Research Centre (LDRC)

The LGIU’s Local Democracy Research Centre (LDRC) has an international programme that engages local authorities and universities in original research to solve key challenges facing our local democracies everywhere. We develop new ideas and approaches for governance, municipalism and citizen participation.