No council tax revaluation, says Pickles

24 Sep 10
The government today confirmed that there would be no revaluation of council tax bands in England during the current Parliament, prompting criticism that the levy is becoming discredited
By Lucy Phillips

24 September 2010

The government today confirmed that there would be no revaluation of council tax bands in England during the current Parliament, prompting criticism that the levy is becoming discredited.

Local Government Secretary Eric Pickles, who had widely criticised the prospect of revaluation while in opposition, said not doing one would protect families from local tax hikes over the next five years.

Pickles said: ‘Hefty council tax bills are a constant financial worry for many people. Today we are setting their minds at ease, and protecting the interests of the less well-off in particular.’

But Tony Travers, director of the Greater London Group at the London School of Economics, told Public Finance that today’s announcement was ‘evidence that there will probably never be a revaluation so eventually council tax will be discredited’. He added: ‘It raises the issue of whether at some point it will have to be replaced.’

The last council tax evaluation in England was carried out in 1991. In 2005, plans for a revaluation in 2007 were postponed by the former Labour government amid anger over a previous exercise in Wales, which led to tax increases for many householders. In 2007 Sir Michael Lyons’ review of local government recommended that one be done in the medium term, but this was ignored. Labour’s 2010 election manifesto pledged it would not carry out a council tax revaluation over the next Parliament.

CIPFA chief executive Steve Freer admitted that conducting a revaluation alongside the impending spending cuts ‘could create a potentially explosive cocktail’.

But, he added: ‘The failure of successive governments to grasp the revaluation nettle does have a significant downside.  It erodes confidence in the council tax by making it feel excessively complex and difficult for taxpayers to understand.  It misses a critical opportunity to simplify the tax and make it more transparent, putting it on a more positive footing which would be both robust and fair.’

It raised the question as to whether revaluation should be made mandatory ‘rather than discretionary for the government of the day to decide’, Freer said.

Andy Sawford, chief executive of the Local Government Information Unit, said Pickles’ decision was wholly expected. ‘The problem with [a revaluation] right now is that there are going to be many, many losers,’ he said. He added: ‘In the abstract there is a logic to it.... but there are lots of other things that are much more important to local government finances than a revaluation.’ 

The coalition has already announced that it will conduct a wholesale review of local government finance next year.

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