Council tax bands are based on outdated valuations (Picture: Alberto Manuel Urosa Toledano/Getty Images)

Council tax is set to rise in 95% of local authorities in England by £100 or more, according to research released today.

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Naturally, no one’s particularly happy about having their monthly outgoings possibly substantially increased without their input, and for the poorest it could be more than just an inconvenience.

And that’s the issue with council tax – the amount we pay has absolutely nothing to do with how much we earn, spend or have in the bank.

It is, essentially, an arbitrary number based on flawed calculations, which are decades out of date.


Council tax was introduced in 1993 as a panicked alternative to the disastrous Poll Tax, which led to riots throughout the country, but its execution was rushed and poorly thought through.



The current bands are based on the property valuations from 1991 (although in 2005, Wales saw revised valuations introduced), which means that every new property built is bizarrely assessed based on what it would have been worth up to 25 years ago. Many of the people on the lowest bands are actually living in what is now a premium location property.

Because it’s the responsibility of the tenant, not the owner, to pay council tax, it functions as a penalty for renters, who are already at a disadvantage and may have no assets or wealth to their name.

Even the loopholes don’t work properly: students are exempt but other members of the household have to cover their share, meaning many students end up paying it anyway in order to be able to live with non-students, who would otherwise be out of pocket.

Despite council tax already increasing way beyond inflation, councils do not receive enough funding to function – hence the proposed increase.

The answer is clear: we must reverse the damaging austerity cuts of the past decade, which have pushed councils and social care to breaking point, rather than taking an already regressive tax and burdening the public with the cost at a disproportionate rate.

Because council tax is calculated based on bands, rather than a percentage of value, the lowest valued house still pays up to a third of what the most expensive property is taxed.

The Scottish parliament has been wrestling with this broken system to little effect, while in Westminster the only viable alternative presented has been the so-called ‘Mansion Tax’, which was abandoned by the Liberal Democrats and Labour alike after negative publicity.

Other suggestions floated include a local income tax, where the government essentially gives a local authority a percentage of its revenue (this system is used in US cities, including New York and Philadelphia), and land value tax following the Hong Kong model, which is backed by the Green Party and has recently had some tenuous support from Labour.

You’d be forgiven for being sceptical that any of these complex alternatives would provide the perfect solution, but at least it would be a move away from what we have now.

The anticipated increases will make make the council tax system even more unfair and regressive, putting the burden on the poorest in society, rather than the wealthiest.



It’s time to scrap this legacy of the Thatcher government and bring in a localised taxation system, which properly funds our councils without exacerbating inequality and pushing people further towards poverty.

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