Following the huge Council Tax increase of 2003
(12.9% average) the Government appointed
Nick Raynsford MP to head up the Balance of Funding Review.
The Government set up the Review in response to local government concerns that the present balance of funding was a problem. It had been argued that it undermined local authority accountability and gave rise to the 'gearing problem'. The overall aim of the Review was to look at all aspects of the balance of funding, review the evidence and consider reform options, setting out the pros and cons of each. Its aim was not to consider ways of increasing local government revenue, but rather to examine the case for changing the balance of funding between central and local sources, which is currently about 75% central to 25% local.
The Review took place between April 2003 and July 2004. Isitfair submitted written evidence to the Review and despite several requests to meet with Nick Raynsford, he refused to do so. Meeting council tax payers was clearly beneath him.
The Review made a number of recommendations, the two key ones being:
The key points to note are:
With regards to the last point, this was also used prior to the revaluation in
Wales. What actually happened there was that the overall council tax liability
increased as more properties were re-banded upwards, as opposed to downwards. This
outcome was the opposite to what Ministers had predicted would happen. They claimed
that the revaluation would be 'revenue neutral'.
Another point to note is that by just looking at the 'overall liabilities of taxpayers' allows for variances between different areas. It is already well documented how funding has been moved from the South to the Midlands and the North. It is clear that this situation will continue, and become worse, but not 'significantly', whatever that means.
All Government papers relating to this review may be accessed via this link.
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