In Denmark, nearly all public services for individuals and families are delegated to local authorities, resulting in high quality and flexible delivery. The financing of these services is mostly ensured by tax revenues determined by the individual local authority but linked to the central government income tax. Local accountability in this regard has recently been called into question. Although local borrowing is strictly controlled, the system of grants and equalisation does not give incentives for cost efficiency in local government. Other accountability instruments (matching grants, general grants, the long tradition of negotiations) are analysed in light of their impact on control.