Although some would categorise all specific and special grants as earmarked grants, the situation in practice is less clear. Some grants, such as the police special grant, provide a block of funding to a specific service. There has been a growing trend towards earmarked funding as a proportion of total external support for local government. There was a large measure of agreement in the Review Group about the appropriate roles for general and earmarked grants. General grants therefore fit in with the concept of joined up government.
General grants are also relatively simple and economic to administer.
Therefore earmarked grants may relieve pressures on the general grant system in cases where ministers wish to promote particular initiatives or where spending pressures impact on a minority of local authorities. 3.16 Local government representatives expressed concern about pressures for hypothecation within the SSA system. Hypothecation refers to the idea that the element of the SSA calculated for each service should be dedicated entirely to that service. This results in an authority s spending on a particular service being judged by reference to its SSA for that service. More recently hypothecation has taken the form of pressures to passport grant through to particular services.