METHODS AND PROBLEMS OF LOCAL GOVERNMENT 303

(2) Grant$-in-Aid. If a local authority keeps its roads in good
repair, and its streets well lit, the people who benefit most are the
local residents, and it is reasonable that they should pay at least
part of the cost. But they are not the only beneficiaries; the
population of Manchester, for example, is supplied with goods
carried to it along roads in the care of the surrounding authorities.
An authority which pursues an active education policy produces
a supply of well-trained citizens who, as they grow older, may
scatter all over the country. National and local benefits cannot
be separated into watertight compartments, and in recognition of
this fact the Central Government makes grants to the local
authorities. Before the 1929 Act there were many separate grants,
each for some service managed by the local authorities. The
de-rating policy reduced the yield of the rates, so that some com-
pensation from the Central Government was necessary, and this
provided the opportunity for a general revision. It was decided that
a General Aid Grant should be made by the Ministry of Health for
the Health, Welfare, Highway and Public Assistance services; its
amount, for each County, to be determined by a formula which
took into account the population^ the total rateable value, the
number of children tinder five, the proportion of unemployed,
and the number of miles of road. The amounts now paid are a
compromise between this formula and the amounts lost through
de-rating; the formula will come into full operation in 1947 and
the size of the gi^nt will be reconsidered every five years. The
General Aid Grant is paid, in the first instance, to Counties and
County Boroughs; the former distribute it to their subordinate
authorities according to population, urban areas receiving five
times as much-per head as rural areas. The Ministry of Health
also makes the grants for housing already described. Another
formula fixes the grant paid by the Board of Education to local
education authorities; it is based on the number of children
attending school, the rateable value of the area, and a percentage of
the cost of various education services. Half the expenditure on
Higher education is met by grant. This principle, that the grant