The ‘fairness’ of the standard spending assessments underlying the community charge

In this paper average domestic rate levels per adult for 1989/90 are correlated with standard measures of the socio‐economic status of English local authority districts, derived from the 1981 Census. These correlations show that rate levels tend to be higher in areas of social disadvantage and lower in more socially advantaged areas. When introducing the provisional figures for the new Community Charge for 1990/91 the Secretary of State stressed that this new charge would be fairer than the system of domestic rates. If the community charge were fairer than rates, this paper argues, the charge would not depend upon the socio‐economic status of the area in the same way. However, it is shown that, quite to the contrary, the community charge is even more strongly related to the socio‐economic status of the local authority than are rates. By using alternative cost assumptions, from consultative documents submitted to the Government by the Local Authority Associations, it is shown that community charge levels are crucially dependent on the assumptions underlying the Standard Spending Assessments, the Government's assessment of what it costs to provide a standard level of service.