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Council tax review - key findings | | The Balance of Funding Review set up to look at the way council tax could be made more fair has been published. Here are its key findings: There are strong arguments for shifting the balance towards local funding, but this depends on the feasibility of measures. Council tax has important advantages as a local tax, and should be retained, but reformed, in order to help people on low incomes and to reduce the impact of revaluation. More work is needed on the reform options which must include a fair and effective system of council tax benefit. Levels of benefit take-up must be improved. There is a clear case for reviewing council tax bands, and the ratios between them at the time of revaluation, but particular care must be taken to ensure those on low incomes are not unfairly affected by any changes. The only way to achieve a major shift in the balance of funding is to supplement a reformed council tax with either a re-localised business rate or a local income tax - or a combination of both. Returning business rates to local authority control could give councils greater incentives to promote economic development and improve links with business. However, business has serious concerns about this. A local tax would be more progressive and more buoyant than council tax but would be less predictable. More work is needed on how this could be adminstrated and what its impact might be. Smaller taxes or charges do not provide the potential for major change in the balance of funding.
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