Local government finance responds to the differing needs of localities
Within the scope of this research, we will assess how the local government finance responds to the differing needs of localities in the United Kingdom. It is apparent that the ability of local government to address such needs is heavily dependent on the state government. The Treasury is the central actor at the executive stage of budgeting. The first round of bargaining over expenditures is typically at the level of civil servants – those from spending departments and those from the Treasury. This bargaining takes place with the knowledge of the relevant ministers, but can be conducted more easily by officials who know both one another and the facts of the programs. Both elements are important. Interpersonal trust and respect are important components of the success of any bargainer, especially when the spending departments must have their requests reviewed annually. (Richardson, 2001, p. 77)
The second stage of executive bargaining occurs among the spending ministers, the Treasury, and the cabinet as a whole. Budget decisions are manifestly political, and if nothing else, they reflect the relative political powers and skills of the ministers involved. The task of the spending ministers is to fight for their programs and to try to get as much money as they can. “The Treasury ministers are the guardians of the public purse and play the role of skeptic.” (Fischer, 1999, p. 67) The prime minister must moderate any conflicts, but knows that he or she can rarely go against her Treasury ministers if the government is to function smoothly. Also, in today’s more conservative period, there is some political advantage to opposing expenditure increases.
The fight over the budget occurs on a one-to-one basis between spending ministers and the Treasury ministers, in cabinet committees, and finally in full cabinet meetings. Under the Thatcher government, a special cabinet committee was formed in most years to review disputes between the Treasury and spending departments, usually siding with the Treasury. (Johnson, 2002, p. 43) British government has made a great deal of effort to control the costs of government through analytic programs such as PESC (Public Expenditure Survey Committee) and PAR (Programme Analysis and Review). (Johnson, 2002, p. 46) The major input of PESC into the decision process is a projection of the expenditure implications of existing programs, showing what the expenditure level would be if programs were to provide the same level of services in the year being budgeted as in previous years. PAR was intended as a comprehensive evaluation of specific programs, with the intention of making those programs more efficient or perhaps eliminating them.
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