Local government can be made self-financing claim IEA authors
The impact and legacy of the seminal 1981 Budget
It is argued that local government could be made self-funded by transforming VAT into a local sales tax used specifically to fund local councils. The local sales tax would be collected by councils who would be directly accountable to their electorates for how the money was spent. Councils could set different tax rates as they competed for revenue and people would be free to move to and shop within those local authorities whose tax and spending regimes most closely corresponded with their own preferences.
The study also examines the case for local government from first principles, analyses the Blair government’s programme of local government modernisation and examines the successes and failures of PFI.
Read the full study here.