Behind this chapter lies a feature almost unique to Britain: the proportion of revenue for local government raised locally is lower than in almost any other advanced European state. The only significant source of local revenue available to councils is the council tax - a tax on property which provides about a fifth of revenue. The overwhelming source of local government revenue comes from central government, and even the levels set for council tax have since its introduction been tightly controlled by the centre. Local authorities are uniquely boxed in, and getting them out of the box is the most important policy problem in local government. But any solution is plagued with difficulties. The property values on which the council tax is based have not been revalued since 1991, and no government has been prepared to risk the political difficulties involved in revaluation in England. Other countries have developed alternative or additional local tax bases: for instance, local sales taxes, common in the USA; local income taxes; a land value tax (designed to capture part of the rising value of land); and a mansion tax on the value of exceptionally highly valued properties. Every one of these faces huge obstacles because each damages powerful interests. None of the aspirations for greater decentralization voiced after the Scottish independence referendum mean anything without a solution to the problem of centralized control of finances.
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