METHODS AND PROBLEMS OF LOCAL GOVERNMENT 305

Capitalism-Socialism issue. But the immediate question for local
residents is simply, who provides the service most cheaply and
efficiently? The answer can only be found by examining- the facts
and figures of each case. If the evidence is in favour of the local
authority, the citizens can enjoy either lower rates, or lower
prices for the service; if the latter, they will have more money to
spend as they please, and so add to the prosperity of their
area.

(4) Loans. Much of the expenditure of a local authority recurs
every year, and must be met out of annual revenue from one of
the sources mentioned above. Often, however, building has to
be done, or public services started or re-equipped, and the
benefits of the capital expenditure will continue for many years—
benefits either of added health and comfort, or actual money
revenue. Foir such purposes, it is financially sound to borrow
money, and the authorities do this by getting an overdraft from
the hank like a private person, or issuing stock like a company,
or mortgaging some of the municipal property. Since the repay-
ment of loans is guaranteed by the Government, local authorities
find that they can borrow more easily and cheaply than private
concerns. Naturally, the law describes the purposes for which
loans may be raised, and the conditions of repayment. For every
loan permission must be obtained from the appropriate Govern-
ment Department, which sees that the law is being observed,
and approves the details. Most loans have to be repaid in sixty
years or less, but for housing loans a maximum of eighty years
is allowed. The total debt of local authorities reaches nearly
£1,500,000,000, about one-third of wEIch is for housing,

Management. A County Council is compelled by law to appoint
a Finance Committee, and other local authorities, except Parishes,
almost invariably do the same. Eveiy year, the other committees,
in change of activities which cause expenditure, frame estimates
which the^Finance Committee examines, generally trying to see
if they can be reduced without fundamental alteration of the
policy approved by the Council The Finance Committee, in