By Iain McLean and Alistair McMillanThis report looks at the way local government should be funded in the UK with the prospect of regional assemblies. It considers how in a more devolved world we can fund for equity without introducing complex formula or creating perverse incentives. The authors draw on extensive research from Australia and Canada. They suggest that the establishment of a UK Grants Commission to distribute and allocate both regional and local funding would boost both efficiency and equity. They also propose a number of changes on how we raise and spend taxes, including allowing for some national income tax to be collected at local level.
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