Projects
Council tax reform
Council tax is, quite simply, an unfair tax. Whilst the richest fifth of non-retired households pay 2% of their gross income on council tax, the poorest fifth pay 5%. This regressive nature is not because it is a property tax, nor is it inevitable. Rather, it arises from the way that the amounts levied from properties of different value are calculated. So, for example, a household in a £400,000 house currently pays about three times the council tax of a household in a £40,000 house even though the house is worth ten times as much.
Because the government can choose the council tax bands and how the levels of tax vary by band, there is considerable scope for reform. By choosing different values, it is possible to reduce the council tax burden for those on low incomes whilst still leaving those in the middle unscathed. Such a change could be implemented without either significant administrative effort or primary legislation.
Because of its importance as a subject, we have established the Centre for Council Tax Reform, to make the case for a fairer, less regressive council tax that contributes to stronger local democracy. The Centre provides authoritative information about council tax, presents the arguments for change, and facilitates dialogue between key stakeholders.
The Centre for Council Tax Reform is supported by UNISON, the Public and Commercial Services Union and the Local Government Information Unit.
We have also undertaken a variety of projects specifically concerned with council tax reform. In reverse chronological order:
- Council Tax: the answer sets out the conclusions of several years of research carried out by the Centre. Providing examples of how the reforms might work in practice, the report calls for an increase in the number of bands at both ends of the current banding system, for regional variations in the banding system, and for a 'maximum liability' approach in the administration of council tax benefit. View/download the report.
- In July 2004, the ODPM select committee produced its report on local government funding, including Council Tax reform. As you will see, NPI were expert witnesses for their deliberations.
- We have analysed the options for reforming the current council tax system on behalf of the Government's Balance of Funding Review. The report explores various degrees of reform and assesses their feasibility according to a range of criteria agreed with the Government. View/download the report.
- We produced a report for Help The Aged on the impact of council tax upon older people's income. View/download the report.
- We produced two papers for the Association of London Government (ALG), one on the implications of the revaluation for London local authorities, and one on the current restriction of council tax benefits to Band E and below.
- In 2002, we worked with SIGOMA (effectively the association of municipal local authorities outside London) on options for council tax reform. Our report for SIGOMA is currently not in the public domain.
- In 1999, we undertook our original research into the subject, analysing the options for change. View/download the executive summary or the full report.