14. The following five principles are those which should govern all financial arrangements between principal authorities and parish and town councils. They set out the key aims to be achieved when setting up new arrangements. The principles should also be used by those reviewing existing arrangements, as a checklist to see whether all these objectives are being achieved by them.
Fairness in the provision of services (and access to them) by the principal authority between different parts of their area;
Simplicity – to keep administrative costs of operation to a minimum;
Transparency – to help understanding;
Democratic control and accountability – to let local councils support additional services with additional expenditure while ensuring accountability to all those responsible for funding. This means distinguishing between funding by principal authorities (for a service carried out by a local council) and funding raised by local councils themselves (eg using their precepting powers);
Finance following function – where provision of a service is devolved or transferred from a principal authority to a local council, funding is also transferred, with the amount involved being agreed by the principal authority and the parish or town council.
These principles should be a continual reference point when setting up new or assessing existing financial arrangements between principal authorities and parish and town councils.
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Published on 14 May 2002
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