ABSTRACT
Central government grants to local government in the United Kingdom in 1976 totalled the gargantuan sum of £9,367,000,000. Territorial justice, as opposed to individual justice, refers to the ability of a territorial unit of government to provide services according to the needs of its population, and to tax in accordance with its capacity to pay. Among 18 European democracies, Britain ranks fourth in percentage of local revenues provided by grants. There is, therefore, a large gap between the duties of local government in Britain, which are unusually heavy by most standards, and the financial capacity of local authorities to raise their own revenues, which are relatively slight. The consequence is a structural mismatch between duties and financial capacity. The sheer size of the annual grant plus its potential redistributive effects, have had a profound impact on centre-local political relations.
