The government’s decision to rule out a council tax revaluation during the lifetime of the current Parliament came as no surprise. Expected spending cuts are already creating a tremendously high level of uncertainty and risk across the public services. Launching a revaluation in this climate might mix a very, very explosive cocktail.
But, if not now, then when?
Successive governments have opted not to grasp this nettle despite the attraction of correcting real unfairness. In other circumstances, making sure the tax base is up to date would be a cause to champion. But, in this case the unfairness is disguised. Most of the potential beneficiaries of a revaluation have absolutely no idea that, by being pegged to 1991 property values, they are paying over the odds.
Instead, we all tend to focus on the downside: the possibility that a revaluation may increase our tax bills. Viewed through that lens, postponement becomes a good news story. As the BBC News began its coverage the other day, “Householders throughout England can breathe a sigh of relief...”
All of this leaves politicians wedded to the ‘leave-well-alone’ option. But while this might be irresistibly attractive in the short term, it is potentially storing up significant problems for the medium and long term. In the absence of a revaluation, council tax feels excessively complex and difficult for taxpayers to understand. In turn, it becomes more difficult for politicians to justify and defend.
So, if we are to avoid steering the council tax on to the rocks, an important question looms large. How do we get to regular revaluations?
I think there are two options that need to be explored. The first is for government to relinquish its discretion and to place revaluations on a fixed-term frequency that is non-negotiable. The second is to do away with set-piece, all-property reviews and instead opt for continuous updating of the tax-base by routinely feeding in hard data about completed property sales.
Either of these options seem to me to have the potential to bolster faith and credibility in a fundamentally sound tax that is suffering from nothing more than a lack of proper maintenance.
If not, the options are for much bigger and more radical change. Anyone for another shot at the poll tax?
Steve Freer is the chief executive of CIPFA
