The household charge is a local authority charge, the proceeds of which will be used to fund vital local services in our communities.
The Local Government (Household Charge) Act 2011 provides that income from the household charge is to be paid into the Local Government Fund. I will disburse monies back to local authorities in general-purpose grants, making it possible for me to equalise distribution, and ensuring that those local authorities with lower populations than others do not suffer unduly as a result.
General Purpose Grants contribute to meeting the difference between the cost to local authorities of providing a reasonable level of services and the income available to them from local sources and from specific grants. The two principle sources of revenue for the Local Government Fund are the proceeds of motor tax and the income from the Household Charge.
General purpose grants from the Local Government Fund are structured to bring about equalisation, over time, so that each authority will have sufficient resources, either from central grants or from its local income base, to provide a reasonable level of day to day services to its customers. For the purposes of allocations, a range of factors is taken into account, including each local authority's expenditure on, and income from, its services, and the overall amount of funding available for distribution.