Local Government Finance: The 1990 Reforms

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In this commentary we describe in detail reforms taking place to local authority finances and analyse their effects on local authorities and local tax payers. The study includes the results of a major survey undertaken by the Institute of Revenues, Rating and Valuation of local authorities' experiences in introducing the administrative arrangements for the community charge.

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... The reasons for this situation are as follows: (1) there is no requirement for local authorities and municipalities to provide a fully accessible public toilet; (2) there is no user-participation process with a focus on the toilet needs of diverse people; and (3) public toilet provision is costly to maintain, both financially and environmentally (Aker and Tasdemir, 2010;Ersoy, 1989;1999;Gulluce, 2004). Moreover, toilet governance in Turkey is fragmented. ...
Provision of public toilets is not only a matter of land use, but also an essential design and planning concern. This study examines the following questions through an explanatory study. (i) What problems do public toilets pose? (ii) What toilet facilities do people require most and/or most emphasize would affect the way they use land and participate in social life? (iii) How do demands, needs, and expectations around public toilets change depending on gender, age, and ability? We conduct a survey of 300 people in fourteen public restrooms in the city centre of Ankara, Turkey. According to factor analysis results, public toilets should be seen as potential urban spaces and initial opportunities for sustainable urban developments and liveable cities.
... Especially during the 1980s, local governments (metropolitan city municipalities and district municipalities) were extensively benefited from various financial improvements transferred into their budgets (Keleş, 1992). As Ersoy (1999) stated the urban population increased 60% between 1980 and 1995 in Turkey, while during this period, the municipal revenues increased 140% in real terms (Ersoy, 1999, p. 81). Between 1975 and 1980, the share of housing co-operatives in housing supply was only 10.9%, this ratio reached 21. 1% between 1980 and1985;and it rose 31.5% between 1985and 1990(Işık and Pınarcıoğlu, 2001. ...
Since the 1980s, the economic and political conjuncture of the world has changed to a great extent leading to profound transformations in cities and metropolitan areas. Economic restructuring, globalization process, and re-organization of central-local government relations are the basic factors behind these transformations In a similar vein, after the mid-1980s and throughout the 1990s, the development of Istanbul metropolitan area have been characterized by a variety of factors ranging from the implementation of the neoliberal policies at the national level to the changes in the metropolitan government at the local level. Although the roots of this transformation can be traced back to the late-1970s, the most important changes have taken place in the last two decades. After 1980, Turkey adopted neoliberal policies in order to increase its economic articulation to the international relations. As a result of these measures, starting from the mid-1980s, foreign direct investment inflows into Turkey have increased to a great extent. Moreover, parallel to the worldwide trend of rising importance of producer services, the share of service sector investments has increased in total amount of foreign direct investment inflows into Turkey. During this period, Istanbul metropolitan area and especially its Central Business District (CBD) was affected to a great extent by the implementation of private sector-led projects realized by both foreign and Turkish firms operating in various activities such as retailing, tourism, real-estate, finance and other producer services. The author argues that the neoliberal policies of the central government after the 1980s, the increase in foreign direct investments in service sector, the investment shift from industry to commercial and residential real-estate development and financial activities have brought about significant transformations in Istanbul metropolitan area. In this work, in the light of the above-mentioned factors, the develop
The majority of the governing and administering of Britain occurs away from the confines of Whitehall and Westminster in a large number of non-central government organisations that can be found throughout Britain. These organisations, as with the rest of the political-administrative machinery of the state, have undergone a number of distinct transformations over the past fourteen years. The extent to which these changes constitute a real revolution, and the implications of them for the management and administration of the services that the people of Britain receive, are important issues not only in their own right but also in terms of the possible shape and direction that these parts of the governmental machinery will assume in the future.
The findings and conclusions of this paper are not subject to detailed review and do not necessarily reflect the official views and policies of the Lincoln Institute of Land Policy. Please do not photocopy without permission of the authors. Contact the authors directly with all questions or requests for permission.
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The most widely used typologies of European local government systems are based on research conducted in the 1980s. The most popular are those of Page and Goldsmith (1987), distinguishing between Northern and Southern European systems, and Hesse and Sharpe (1991), distinguishing between Southern, Northern and Anglo-Saxon models. The rare attempts to include the Eastern part of the continent are far from comprehensive or satisfactory. They usually view the whole region as a distinct group, referring to its specific historical background and recent radical decentralisation (Bennett 1993, Heinelt and Hlepas 2006). Disappointingly, the same approach is presented in the most recent comprehensive analysis of European local government systems (Loughlin et al. 2010). This article tries to fill the gap produced by this simplification, by offering a comprehensive picture of the variation within the Eastern European region and suggesting a first attempt at a typology of around 20 countries of the region. The criteria for this typology refers to those used in earlier classifications of the Western European systems and include: (i) territorial organisation and tiers of elected local governments, (ii) scope of functions provided by local governments (functional decentralisation), (iii) financial autonomy, (iv) horizontal power relations within local government institutions (election systems and relationships between mayors and councils).
It is argued within this paper that domestic rates, which represent an important and significant source of local government revenue for district councils in Northern Ireland, should be reformed. There are currently issues pertaining to the present system which adversely affect both fairness and equity. The rating system for both domestic and non-domestic property has its origins in the early nineteenth century, when the basis of assessment was centred on hypothetical rental values. It is a contention of this paper that the use of annual rental values for domestic property taxation is no longer tenable owing principally to the lack of open market rental evidence and the transparency of the system. Given the absence of regular revaluations, significant disparities and inequities are now inherent in the rating system which can only be addressed by undertaking a further revaluation based on capital values. This paper examines, at both the macro and micro levels, the impact of the assessment lag on effective tax rates and the effect of a change in the basis of the tax.
This paper hypothesises the existence of several sources of monopoly power for local governments when the system of local taxation is reformed, by central government. In particular we argue that information asymmetries between tax-payers and (central and local) government at the time of reform provide opportunities for local politicians to set tax levels which differ from those expected in a full information setting. We predict that, compared to pre-reform tax levels, local tax levels post-reform will differ according to four local government characteristics: (i) the size of the seat majority of the ruling local party; (ii) whether the party controlling local government is the same as, or is different from, the ruling party of central government; (iii) whether the local government structure has one or two ‘tiers’ and whether the same party controls both ‘tiers’; and (iv) the degree of indebtedness of the local authority. Testing the model on the U.K. local tax reform of 1990, we find strong evidence consistent with the hypothesis that inter-authority differences in local tax levels reflect differences in the degree of local political monopoly power resulting from information asymmetries. This monopoly power appears to have been used generally, but not exclusively, to raise tax levels.
Although it is nearly two years since the Government reformed the system of local business rates to introduce a uniform business rate, the debate still continues over the merits of the new system. The importance of local business rates should not be underestimated. The non-domestic rates' yield of close to £10 billion in England in 1990-91 accounted for 30 per cent of local authorities' net financing. By comparison, the yield from mainstream corporation tax in the UK in 1990 will be around £12 billion.
The introduction of the Community Charge - or 'poll tax' - in April this year brought the issue of local government finance to the forefront of British politics. The heated political controversy, and the radical nature of the reforms to local domestic and business taxation, have generated considerable academic analysis and comment, not only in Britain but also abroad. These have clarified many of the key issues in the reforms - the Government's objective of greater 'accountability' in local government, the effect of the new system on the tax levels required to finance local spending, the distributional incidence of the new tax, and the question of administrative cost. But comment in some of these areas has had to be speculative; in advance of experience, some key parameters have been uncertain, with few obvious precedents in either UK or overseas experience. In this paper we present some early evidence on the operation of the new system in practice, both to provide a commentary on the first months of the Community Charge, and to identify what can be learned from experience in the first year.
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