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Forum Brief: Council tax

The council tax is set to be scrapped in its present form within four years, according to reports in the Times.

Following a number of complaints against rising local authority bills, the current system of eight tax bands applicable to the whole country will be replaced by a scheme under which the bands are set regionally to reflect local property values.

Forum Response: Local Government Information Unit

Cllr Dave Wilcox, chairman of the Local Government Information Unit, said: "A growing consensus is forming about the regressive and unsustainable nature of the council tax. Revaluing properties and adding a few more tax bands will not do.

"There must be a new capacity for regional income-related variations to protect those living just above benefit entitlement levels, but whose homes have risen sharply in value.

"Linked to council tax reform, stronger local democracy demands greater local autonomy over finance, with a broader local government tax base and less central direction over spending.

"Research has shown that voters would be more likely to vote in local elections if councils had more scope to set taxes and charges locally and decide how the money is spent.

"I welcome ministers moving beyond blaming councils for the crisis that trends in central government policy has caused. Better still, certain 'experts advisors' could stop using low turnouts in council elections to justify further centralisation.

"Adding to the burden on council taxpayers, the business rate has made a disproportionately low contribution towards council spending in recent years. Ministers seem to have ruled out returning business rates wholly to local control.

"This would go far towards councils raising most of their own revenue, strengthen the link between local businesses and councils, and help correct the under-funding of those services that have not been a ministerial priority.

"Other measures to widen the revenue raising options available to councillors, and relieve pressure on council taxpayers, might include a discretionary local element to income tax and a range of taxing and charging powers.

"Raising most council revenue locally would curb the tendency for small variations in a council's spending, or in government grant distribution, to cause disproportionate fluctuations in taxpayers' bills. Moreover, ministers would find that their own dilemmas over capping recede as councillors answer more to ward electors, and their local priorities, than to Whitehall."

Published: Mon, 12 Jan 2004 01:00:00 GMT+00