not as providers of public services, but as local agencies of state policies, can even be seen in
federal states such as the USA in areas such as education (see Tanzi, 2001).
Despite this caveat, the data seem to suggest that the UK does not offer its citizens a
significantly more centralised form of public service provision than its European neighbours.
Indeed, in many respects (see Table 1) the UK has imposed a much greater consistency on
the shape of its local government by explicitly allocating functions to different tiers of
government, generally avoiding clashes of competencies. In some respects Scotland also
benefits from the fact that the remit of the Scottish Parliament with respect to devolved
expenditures is clearly defined. As a devolved region Scotland is also unique in having much
more exclusive control of functions such as education and health when compared to many EU
unitary states. There is a more marked difference between the UK and other EU countries in
the degree and nature of fiscal autonomy granted to its sub-central governments.
Fiscal Autonomy: To What Extent should Sub-National Jurisdictions
Control their Revenues?
The Comparative Evidence
This is a much more controversial area and one where the practice has varied considerably
both within the EU and the OECD. Traditionally the UK has financed most of the spending
of its sub-national jurisdictions through grants. Figure 1 shows that the UK makes less use of
taxation to fund regional and local government spending than most European countries (the
exceptions are the Netherlands and Ireland, which are geographically much smaller).
However, these data tell a very partial story on the degree of fiscal autonomy given to sub-
national jurisdictions, as many other countries, including federal states like Germany and
Austria, make extensive use of tax-sharing arrangements whereby regional and local
authorities are given some share of the total tax yield. If the sub-national jurisdictions do not
actually control either the tax base or the tax rates that generate the revenues they share with