LORD Palmerston was a famous British statesman and Prime Minister in the 19th century. He's been largely forgotten in our modern era when people seem to think history started with Mrs Thatcher.

But Palmerston still gets the occasional mention - in the House of Lords anyway! - for the Schleswig-Holstein Question. He claimed ironically only three people understood it.

One was dead, the second in a lunatic asylum and he himself had forgotten.

I certainly haven't any idea what it was about but I was reminded of his comment while trying to get my mind round a present-day craziness called local government finance.

Pendle Council's chief executive, Stephen Barnes, might shoot me for saying so but I wonder if anyone at all understands how it works - or at least why it happens as it does.

Take for instance the grants the Government pays to Lancashire districts every year. They pay around four-fifths of spending on services not covered by the council tax.

Two years ago the Government changed how it works out what each council should get. They said the new system was fairer and more accurate in assessing each area's needs.

Councils like Burnley and Pendle cheered! At last some of our problems were recognised, more money would be paid over.

At least, that is what the Government promised. But if they paid some councils more, others would get less and they have been too frightened to cut grants to some.

So they have failed to hand over the extra money they themselves worked out that we need.

And it's not peanuts. In the past two years, Burnley Council has been shortchanged by well over £1million. Just think how this could have helped to improve services in a town the Government says really needs help. Hyndburn and Chorley are in the same boat.

Pendle actually tops the league - it's the Lancashire "loss-leader." The Government has kept back no less than £1.5million - money that it agrees is needed here.

Forget Schleswig-Holstein! Can anyone explain this modern scandal?

Parliament starts up again this week and it's time for ministers to give some answers.