Cheddar is recognised as a village. The adjacent settlement of Axbridge, although only about a third the population of Cheddar, is a town. This apparently illogical situation is explained by the relative importance of the two places in historic times. While Axbridge grew in importance as a centre for cloth manufacturing in the Tudor period and gained a charter from King John, Cheddar remained a more dispersed mining and dairy-farming village. Its population grew with the arrival of the railways in the Victorian era and the advent of tourism.
The parish council, which has 15 members who are elected for four years, is responsible for local issues, including setting an annual precept (local rate) to cover the council’s operating costs and producing annual accounts for public scrutiny. The parish council evaluates local planning applications and works with the police, district council officers, and neighbourhood watch groups on matters of crime, security, and traffic. The parish council's role also includes initiating projects for the maintenance and repair of parish facilities, as well as consulting with the district council on the maintenance, repair, and improvement of highways, drainage, footpaths, public transport, and street cleaning. Conservation matters (including trees and listed buildings) and environmental issues are also the responsibility of the council.
The village falls within the Non-metropolitan district of Sedgemoor, which was formed on 1 April 1974 under the Local Government Act 1972. It was previously part of Axbridge Rural District. Sedgemoor is responsible for local planning and building control, local roads, council housing, environmental health, markets and fairs, refuse collection and recycling, cemeteries and crematoria, leisure services, parks, and tourism. Somerset County Council is responsible for running the largest and most expensive local services such as education, social services, the library, roads, public transport, trading standards, waste disposal and strategic planning, although fire, police and ambulance services are provided jointly with other authorities through the Devon and Somerset Fire and Rescue Service, Avon and Somerset Constabulary and the South Western Ambulance Service.
It is also part of the Wells county constituency represented in the House of Commons of the Parliament of the United Kingdom. It elects one Member of Parliament (MP) by the first past the post system of election, and is part of the South West England constituency of the European Parliament which elects six MEPs using the d'Hondt method of party-list proportional representation.
Cheddar is twinned with Felsberg, Germany and Vernouillet, France, and it has an active programme of exchange visits. Initially, Cheddar twinned with Felsberg in 1984. In 2000, Cheddar twinned with Vernouillet, which had also been twinned with Felsberg. Cheddar also has a friendship link with Ocho Rios in Saint Ann Parish, Jamaica.
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