My understanding (and I am open to correction) is that a council decides upon its expenditure and then calculates how much each property tax payer, banded, needs to pay to cover this..
I pay a much higher P.T. than someone with the same valuation band in London (and Buckingham Palace!); but if all the properties there had the bands increased - perhaps with new higher bands introduced - a specific house would still receive the same property tax bill after the re-evaluation as before (obviously assuming that the London increases were in proportion to each other) because it's the same amount of money that has to be raised. Banding sets out the proportion of the cost, not an absolute figure.
You of course assume that bands would be shifted by a considerable margin rather than just revaluing the properties themselves and then allocating them to their new bands. An easy way to raise quite a lot of revenue would be to just fiddle with the bands slightly. In Middlesbrough there's a huge number of properties that are currently Band A (to the point it's unusual to see anything above Band A!) that on their current valuation would be Band D or even E. In Middlesbrough Band A attracts an annual charge of £1,579.30 whilst Band E is £2,895.39.
Now I don't actually think that any Government could get away with doing it that way. If you revalued you'd have to do something with the band as well. I could well see that Band A would end up encompassing properties which are currently in Bands A - D for instance. But I think it's unwise to assume that the Bands themselves would move lock step with the wider revaluation of properties themselves.
I'm not sure how many people have actually looked at what the bands but for interest here they are (for England, they're close but slightly different in Wales whilst quite a lot different in Scotland. In Northern Ireland they're still using Rates rather than Council Tax!):
Property valuation as of 1 April 1991 and corresponding Council Tax band
| Valuation Band | Property valuation on 1 April 1991 | Proportion of Band D |
|---|
| A | Up to and including £40,000 | 6/9ths |
|---|
| B | £40,001 to £52,000 | 7/9ths |
|---|
| C | £52,001 to £68,000 | 8/9ths |
|---|
| D | £68,001 to £88,000 | 9/9ths |
|---|
| E | £88,001 to £120,000 | 11/9ths |
|---|
| F | £120,001 to £ 160,000 | 13/9ths |
|---|
| G | £160,001 to £320,000
| 15/9ths |
|---|
| H | More than £320,000 | 18/9ths |
|---|
(Via my local council:
https://www.redcar-cleveland.gov.uk/council-tax/council-tax-bands)
People may like to compare what band their property is currently in versus where it would be if revalued without the bands being changed!
I don't discount the issues of smaller towns and cities, being from one myself. In practice I think the key problem in local councils is that we're so far beyond what's "fair" and at a point where no council can afford to provide the vital services, let alone do a lot of the things like trading standards which are less visible but have a huge impact on people's lives.
Quite. The reality is that the entire structure and funding formula for Local Government is completely broken. To a great extent Local Government has become a commissioner (and/or provider though it varies) of social care services (adult and childrens) that happens to have bin collections, pothole maintenance and homelessness prevention tagged on. The later (homelessness prevention) is itself a great driver of the bankruptcy that is facing Local Government with the cost of temporary accommodation rising to £2.2bn last financial year:
Local authorities in England are spending a record £2.29bn a year on providing emergency temporary accommodation to homeless households, according to new provisional government figures released today (Thursday 29th August).
The figures also show:
- Councils spent £2.29bn on temporary accommodation from April 2023 to March 2024.
- The amount spent on temporary accommodation has increased by 29% from £1.77bn the previous year.
- Half of this total spend (£1.34bn) was on nightly paid accommodation and bed and breakfasts – the least suitable form of temporary accommodation. The amount spent on this form of accommodation has increased by 55% on the previous year.
These figures come as data released earlier this month showed that a record 117,450 households were being forced to live in temporary accommodation as of March 2024, a 12% increase on the previous year.
In reality Local Government requires fundamental reform both structurally and financially. On the structure it's bonkers that we have such a patchwork where some areas have a unitary authority, others have parish councils under a unitary authority some even have parish councils, district councils and then a county council on top. Plus some now have combined authorities which sit on top of the existing melange of authorities with their own powers. Then of course you have the Police and Crime Commissioners sat as another level (sometimes subsumed into the Combined Authority but not always), as well as the territorial police and fire services which don't always match the local authority structures (we have a Cleveland Police and a Cleveland Fire Brigade, we've not had a Cleveland County since the mid-1990s...).
Then there's the financial constraints that they now operate under as well. Whilst officially they have Council Tax to raise the money they need to deliver their services in reality this is a fiction. The actual ability to raise Council Tax is tightly proscribed meaning that there's little they can do to use it as a mechanism to increase revenue leaving them wholly reliant on Central Government to actually make the books balance. Meanwhile the things they they have a statutory duty to provide they have precious little influence over how much these cost (How can one council resolve the housing crisis which is driven the costs of temporary accommodation? Or accommodate the increasingly elderly population that requires more social care?) so just have to absorb, somehow, these costs. Plus when the Government does decide to provide them additional help it's always in the form, these days, of "pots" of funding that they have to compete Hunger Games style for wasting even more time and money on bidding for funding which they may not even get in the end anyway.
That's before we even get into, going back to structure, the horrific democratic deficit that exists within Local Government as unless your local elections lines up with a general election no one actually votes, and that the councillors that are elected are basically doing it part time as most allowances are not much at all (at my council the basic payment is £10k with the leader getting an extra £22k, £32k to be the democratic leader of an organisation with a budget of around £125m).
The whole of Local Government is in catastrophic need of reform, it should also be very urgent because of course for many people their main interaction with the state is via Local Government.
