Speculation grows over council tax plans
The government has refused to dismiss rumours that it plans to replace council tax with a mixture of income tax and a property levy.
The Sunday Telegraph reported that the proposal will be unveiled by local government minister Nick Raynsford in coming weeks, when the government publishes its interim results of a review on tax.
A spokesman for the Office of the Deputy Prime Minister called to story “pure speculation” and pointed out that the review of local authority funding was due to report in the summer.
Mr Raynsford has previously criticised the Liberal Democrats’ plans for local income tax and the government is expected to opt for a rebranding of council tax with the possible addition of an extra property band for more valuable properties.
The Local Government Association has suggested allocating a portion of national income tax for local councils.
Opposition to soaring council tax bills has been growing in recent months, with an average increase in bills of 12.9 per cent last year and further rises predicted this year. Demonstrations followed last year’s increases, many by pensioners who want the current system scrapped.
Despite the hefty rises, cuts are still expected in council services such as road maintenance and leisure, because the government has ring-fenced so much for education and social care.
A total of 65 councils have been warned to rethink tax rises or be penalised by a government price cap.
