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Local authorities heading towards reorganisation face a lose-lose scenario on how to harmonise varying council tax bills, a finance director has warned.The unitaries that will be formed will be allowed to charge different amounts in different predecessor areas over seven years, provided the gap between the highest and lowest charging areas narrows every year.But Lancashire CC's corporate director of finance Gary Fielding, who was corporate director of resources at North Yorkshire Council when it went through reorganisation, said there was no cost-free option with council tax harmonisation – a critical, politically-sensitive decision for the shadow authorities amid the reorganisation process. Speaking this week, Fielding told The MJ: ‘In a way, you cannot win. There's no such thing as a free lunch on this.'If unitaries choose to equalise quickly, residents in previously lower-taxed areas will face sharper bill rises, but the authority will get financial certainty faster and cut years of administrative complexity. Equalise slowly, and the increases for taxpayers will be gentler, but the unitary will lose income overall and residents might start asking why they are paying more than their neighbours for the same services.Fielding added: ‘The politicians will probably think of this as an opportunity to lower council tax. If you do that you will lose millions of pounds in revenue.'Research carried out by Fielding found that most recently-created unitaries took a year to equalise – though his own North Yorkshire decided on a cross-party basis to take two years to close the approximately 4% gap because of one outlier authority.Fielding said: ‘For Hambleton residents that [one year] was going to be too much to swallow. I think had we done it in one year it would have hit hard.'Down on the south coast, Bournemouth, Christchurch and Poole Council found it had to close a 14.8% council tax gap, sparking claims the Conservatives had been ‘wiped out' at the polls over the issue and accusations from some residents that their bills were ‘completely unfair and unjust'. North Yorkshire's deliberate two-year spread appears to have avoided a comparable reaction, and Fielding has urged councils planning for reorganisation to start thinking about getting council tax harmonisation done quickly now.He also suggested reorganising local authorities should look closely at council tax support schemes to ease the impact on more vulnerable residents.Fielding added: ‘Start modelling, planning and preparing now. Get that decision done as quickly as you can. You need to get it over and done with as soon as you possibly can.'The Ministry of Housing, Communities and Local Government has been lobbied to consider allowing council tax harmonisation to happen in the years before reorganisation rather than in one cliff edge hit but has not changed the regulations.

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POLICY AND POLITICS

Council tax harmonisation warning

By Dan Peters | 13 August 2026

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