Allocation of the UK Rate Support Grant by Use of the Methods of Optimal Control

Abstract

There have been a number of recent criticisms of the methods used to allocate the local authority Rate Support Grant in the UK. A new approach to grant allocation is proposed in this paper, which is based upon mathematical control theory. This method overcomes many criticisms of grant allocation: It allows the explicit identification of grant-allocation goals; it permits the consistent inclusion of constraints; it allows optimal allocation over longer time horizons; and it can incorporate uncertainty in the measurement of local needs and costs. The method is, however, consistent with existing methods of grant allocation and can be implemented within the constraints of existing information bases.