Local Government Revenue - Reviews and Reports
ODPM Local Government Revenue Report
The ODPM commissioned a Select Committee in February 2004 to conduct an inquiry
into local government revenue in order to inform the public debate. The committee
was chaired by Andrew Bennett MP. At that time remember, the Balance of Funding
Review had not yet reported. We therefore had two inquiries running together
looking at the same or similar issues. This inquiry looked at:
- What is the role and purpose of Government grant in ensuring adequate local
- Is the current balance between centrally and locally raised revenue appropriate?
- Should businesses contribute directly to local services?
- Is the council tax a viable and adequate source of local revenue?
- What other local taxes might be acceptable? (e.g. a congestion tax, workplace parking
tax, tourist tax, earnings related tax or sales tax.)
- Should there be a ceiling on local government expenditure and taxation, and if
so how should controls operate?
- To what extent does Central Government control or influence contribute to local
government expenditure and taxation?
The Review made a number of recommendations, the key ones being:
- Local authorities should have control over a much greater proportion of their
income, at least 50%.
- It is much more appropriate for local authorities to be held to account for local
decisions, including the level of local taxation, through the ballot box. If
the Government insist on retaining capping, capping should be selective, rather than
general and selected local authorities should be given a year in which to meet the
- Local authorities should be given the freedom to implement local priorities,
and be judged for these decisions by the local electorate
- The Committee recommends that the Government dramatically reduce their inspection
regimes on local authorities
- Council tax should be retained, provided it and council tax benefit are reformed
- Banding should be expanded at either end of the scale with divisions in what are now
bands A, G and H
- Multipliers should be changed to ensure that the new bands are broadly in line with
- Consideration be given to regional and sub-regional banding
- Rename Council Tax Benefit (CTB) to Council Tax Rebate (CTR)
- Improve the take up of CTB
- Local Income Tax is a non starter
- The cap which prevents business rates increasing by more that the rate of inflation
- Government returns business rates to local authority control as soon as possible
- We believe that local authorities should have the opportunity to introduce a
"basket of local taxes"
Many of these recommendations are quite reasonable, but the retention of the council
tax system is disappointing, and once again, CTB is seen as the answer to the problems,
which it isn't. It is ludicrous that a taxation system can only be sustained
because of a benefit system. This, more than anything else, demonstrates how
bad a system this really is. The Government is effectively paying itself!
Members of Isitfair were invited to appear before the committee and give oral evidence.
We duly attended on 11 May 2004 and a transcript of our appearance can be read
here (questions 338 - 388).
back to top of page