Abstract
Attempts by central governments to control local authority spending for the macroeconomic reasons identified in Chapter 5 may create tensions between central and local government. The greater the disparity between central and local government expenditure objectives, the greater the potential for central-local conflict. This is especially the case where central government preferences require local authorities to spend less on services than they wish, because it implies central restrictions on the various sources of local government income. This may create severe budgetary problems for local governments, whereby they find it extremely difficult, if not impossible, to finance all their expenditure needs. This would be contrary to the spirit of Article 9 of the European Charter of Local Self-Government, indicated by the above excerpt.
The financial systems on which resources available to local authorities are based shall be of a sufficiently diversified and buoyant nature to enable them to keep pace as far as practically possible with the real evolution of the cost of carrying out their tasks.
(European Charter of Local Self-Government: Article 9)
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© 1999 Stephen J. Bailey
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Bailey, S.J. (1999). Fiscal Stress. In: Local Government Economics. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-27415-4_6
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DOI: https://doi.org/10.1007/978-1-349-27415-4_6
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-0-333-66908-2
Online ISBN: 978-1-349-27415-4
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