19 September 2008
Local authority finance experts have warned of 'serious consequences' if the status quo is maintained for council tax in England.
Tony Travers, director of the Greater London Group at the London School of Economics, said there was fear among politicians about reforming council tax, but since its early 'unlikely success' its popularity had waned.
Speaking at a Local Government Association conference on September 17, Travers warned: 'If revaluation never takes place then council tax will become discredited.
'There are three key potential reforms: introducing additional council tax bands, to have more regular revaluation and improve the payment of benefits,' he said.
The government has effectively ruled out revaluing the 1991 property valuations, on which council tax is based, until at least 2011. Steve Jones, LGA director of finance and performance, said this had 'quite serious consequences'.
CIPFA chief executive Steve Freer argued that the principle of a property tax was well founded, but it was at risk due to out-of-date valuations, and needed refocusing. 'Property is a very important component of individual wealth and therefore a component that is quite respectably taxed,' he said.
The housing crisis in Britain presented a good case for a property tax that encouraged the efficient use of property. He suggested incentives to encourage people to move down a council tax band to promote this idea. Freeing up partly occupied larger houses should be seen as a 'positive step for individuals and the community as a whole'.
Freer said council tax needed clearer lines of accountability to work: 'We've got to think about some sort of system of self-regulation, some system of collective restraint in the local government family.'
PFsep2008
