Introduction In this chapter and those that follow, it is supposed that decisions have been made to allocate some functions to subcentral authorities, and that one or more tiers of authorities have been established. It is now necessary to decide how these authorities will be financed. Revenue sources for subcentral authorities can doubtless be classified in a number o f ways, but one fundamental distinction is between grants, which are received from other governments, and independent sources of revenue, which are raised directly. The three principal independent sources are taxes, charges and loans, and these are examined in Chapters 6-8. Grants form the subject of the present chapter and of Chapters 4 and 5.