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‘Spring is the time of plans and projects,' according to Tolstoy. Or for local government, it is the time of budgets and council tax setting – but somehow it sounds far less poetic. The whole concept of setting council tax in recent years has become something of a farce. Thanks to democracy and localism, councils have choice and autonomy over their local taxes – tax hikes can be low, exceptionally low, or non-existent. And, despite a thinly veiled threat – or was it even veiled? – in the Budget, councils were left in the dark until the 11th hour over the referendum threshold, making forward planning a nightmare. As local government edges up its taxes by the smallest of margins in a bid to keep pace with rising inflation and scrape meagre breathing space on fiscal pressures, it begs the question, is it worth it? To risk the wrath of the secretary of state, the local media and, most importantly, the residents for a few extra pounds in the coffers is a hard call – but desperate times call for desperate measures. It is the clearest indication yet that the local government finance system is close to collapse. As Mark Stephens of the Joseph Rowntree Foundation suggests, council tax is at the ‘end of its shelf life'. Based on property valuations that are more than 20 years out of date, it is hardly surprising that council tax is no longer fit for purpose but the spectre of poll tax – the grave mistake that contributed to the downfall of Margaret Thatcher's government – looms large in the sector. Local government secretary David Miliband cancelled the last planned revaluation in a bid to save his party from an angry electorate – and no one since has had the courage to amend the system. Now that the council budget is out of the way, it is indeed the time for ‘plans and projects'. The next Government – of whatever hue – should plan a council tax revaluation as soon as possible while they are not on the election trail. That is, if they plan to keep council tax at all.

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To tax or not to tax is the vexatious question

By Heather Jameson | 06 March 2014

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