An explanation of how local government is funded.

Where does our funding come from?

Local government finance comes from several sources. Local councils obtain their income from:

  • rates
  • government grants
  • fees and charges for certain services
  • loans

District council rates

Councils are legally required to strike the district rates (the domestic district rate and the non-domestic district rate) no later than 15 February each year. The level of rates will be estimated in order to adequately meet the financial needs in the next financial year. 


Department for Communities Local Government & Housing Regulation Division Government grants consist of:

  • Rates Support Grant, which provides extra financial resources for those councils whose needs exceed their wealth base
  • De-rating Grant, which compensates councils for the loss of district rate income due to the statutory de-rating (lowering of rates) of certain property
  • Transferred Functions Grant, which supports the functions that transferred as part of local government reform to district councils
  • Civil Contingencies Grant to support councils in emergency planning

Other government departments pay specific grants to councils which help with the financing of certain revenue and capital expenditure. 

Related articles

Back to top