Democratic decentralisation through ‘conventional’ institutions of local government is facing increasing challenges, whether from financial pressures, questions of representativeness, difficult central-local relations and from a perhaps growing belief that local government has failed to realise its potential and there may be better ways of achieving societal goals. It is clear there is need to contemplate quite radical change to ensure local government becomes or remains ‘fit for purpose’. This collection of papers illustrates the way in which the role of local government is evolving in different parts of the Commonwealth and provides practical examples of new local government at work. It showcases emerging practice, and highlights success stories from new ways of working and challenges confronting local government in both developed and developing countries. New Century Local Government makes a very valuable contribution to helping understand the changing role of local government, and will ensure that practitioners are up-to-date with the most innovative initiatives in local government planning and administration.

This paper assesses the effectiveness of Metropolitan, Municipal and District Assemblies (MMDAs) in Ghana’s Northern Region in mobilising internally generated funds (IGF) to finance development projects. The study gathered both primary and secondary data from three MMDAs: Tamale Metropolitan Assembly, Yendi Municipal Assembly and Saboba District Assembly. It employed a multi-stage sampling technique of questionnaires, interviews, focus groups and key informant interviews to collect data from respondents and obtain a snapshot of their situation in the 2013 fiscal year. It established that fines, property rates, licences, annual rates, investment income, permits, sales of tender documents, and business taxes were potential sources of revenue for the assemblies. Also, the study identified a range of strategies employed by assemblies to raise revenue: engagement of revenue collectors, use of a mobile revenue taskforce, registration of businesses, visits to markets and business centres, commission payments for revenue collectors, security checkpoints, incentivisation of revenue collectors, establishment of revenue collection points, and rotation of revenue collectors. Nevertheless, the study found that the MMDAs studied could not meet their IGF revenue targets for the 2013 fiscal year, with all three falling below 50%. This poor performance was attributed to: inadequate logistics to support effective IGF mobilisation; under-declaring of revenues; not enough revenue collectors; poor supervision and monitoring; poor compliance by ratepayers; corruption; political interference; inadequate knowledge and skills among revenue collectors; poor service delivery by the assemblies; ineffective collaboration; and lack of revenue data.

District Assemblies in Ghana are charged with the responsibility of developing their areas of jurisdiction mainly through internally mobilised revenue. As a consequence, the assemblies are empowered by various pieces of legislation to impose local taxes within their jurisdiction. The local taxes include property rates which are a form of tax that only the District Assemblies may levy. The study therefore looked at the levying of property rates in the Upper East Region and assessed the role and institutional capacity of the Land Valuation Division of the Lands Commission in the tax administration. Findings included limited coverage of the tax, use of flat rates due to absence of up-to-date property values, inadequate technical personnel and logistics for the Land Valuation Division (LVD) and lack of political will to levy the rates fully. Relevant suggestions are made, such as the need to introduce mass valuation, widen the tax coverage, establish a fund for revaluation and revive the Valuation Training School, as well as provide requisite logistics for efficient performance of the LVD.

This resource guide provides practical guidance for designing, implementing and evaluating decentralisation reforms and local government practices to ensure they are as effective as possible. It also synthesises and presents current debates on the impact of decentralisation and local government on poverty reduction, service delivery and conflict as well as providing links to cutting-edge research and recent case studies.

Decentralisation is now taking place in the public administrations of most countries of the world. A critical determinant of the effective performance of local governments is finance – their ability to both mobilise financial resources and to use those resources effectively and efficiently.

This book explores the variety of methods used to ensure that fiscal decentralisation takes place alongside administrative decentralisation. It considers the range of revenue sources available, the design systems of intergovernmental transfers between central and local government, and the kinds of rules and procedures necessary to ensure that local governments use their financial resources appropriately.

The experiences described in this book will help local government managers, and national policymakers charged with local government finance issues, to ensure that they follow good practice in their own programmes of local government reform.