Geographical inequalities and sub-national funding in France
This review aims to draw out lessons for England, and the UK more broadly, regarding how funding mechanisms can be used to address spatial inequalities better. The review is based on desk research of academic and policy publications, as well as 11 interviews conducted with French academics and policy experts in summer-winter 2024.
Our analysis indicates how equalisation mechanisms are important in supporting local authorities in France that face significant expenses and insufficient resources, thus reducing territorial inequalities. Experiences in France suggest that equalisation measures can be complicated to operate and the deduction of revenues from some local authorities can cause resentment. The volume and ease of operation of equalisation mechanisms are therefore important. In constrained financial contexts Vertical equalisation grants may be most effective if they are targeted at a small number of the most disadvantaged local authorities.
The review highlights several key issues relevant to the UK and English context, including how fiscal equalisation mechanisms and local fiscal autonomy and flexibility can support national government in addressing geographical inequalities. The report also provides insights into how the state can help local authorities with less capacity / expertise by providing support with developing funding bids. Accessing support from civil servants based regionally who have a strong understanding of regional needs can help facilitate relationship building and enable the development of stronger, more regionally responsive bids.
France illustrates how long-term local fiscal autonomy, equalisation mechanisms and flexibility are important in enabling sub-national government to develop locally specific, long-term responses. Sporadic or piecemeal levers are unlikely to create considerable impact.
Selective application of competitive funding, alongside sustained long-term allocations, can foster innovation in tackling challenges while supporting strategic planning.
There is a trade-off to be made between targeting funding at all local authorities that share certain size characteristics (e.g. small towns) and targeting those with the greatest levels of socio-economic needs. Whilst targeting all local authorities in this manner can symbolically draw attention to the challenges faced by that type of area, spreading funding thinly can limit the extent to which inequalities can be addressed, not addressing citizens' feelings of abandonment.
Meet the Author
Dr Abigail Taylor
Throughout Abigail’s studies and career, the key thread has been understanding the role of place in social and economic inequalities. Abigail’s research often involves a cross-national focus. She specialises in qualitative research having considerable expertise in semi-structured interviews, case studies, thematic analysis and NVIVO. She has particular experience in conducting research with both policy makers and disadvantaged individuals.
Abigail is passionate about leading and contributing to research and policy analysis that informs and influences regional and national growth policies. She has contributed significantly to engagement and impact through secondments to the Industrial Strategy Council and the Smart Specialisation Hub.