Abstract
EQUALISING GRANTS FROM CENTRAL GOVERNMENT TO LOCAL AUTHORITIES ARE DESIGNED TO ENABLE ALL LOCAL AUTHORITIES TO PROVIDE A COMMON LEVEL OF SERVICE WITH A COMMON LOCAL TAX RATE. THE ENGLISH RATE SUPPORT GRANT IS EQUALISING, BUT IT DOES NOT AT PRESENT EXTEND TO PUBLIC TRANSPORT SUBSIDY. THIS PAPER INVESTIGATES EQUALISING GRANTS FOR PUBLIC TRANSPORT, USING A COUNTY-LEVEL ECONOMIC MODEL OF BUS SERVICES AND DATA FOR 36 ENGLISH COUNTIES. THE MAIN CONCLUSION IS THAT IF THE EQUALISATION PRINCIPLE WERE ADOPTED, ALMOST ALL CENTRAL GRANT WOULD GO TO RURAL AREAS. THIS WOULD NOT PRECLUDE PUBLIC TRANSPORT SUBSIDY IN URBAN AREAS, BUT IT WOULD BE FINANCED BY LOCAL, NOT CENTRAL TAXATION.(Author/publisher).