Council tax reform planned
Welsh Government Finance and Local Government Minister Rebecca Evans has announced plans for a consultation next year on an ambitious package of council tax reforms.
The move is the first step in progressing the Programme for Government and Plaid Cymru Co-operation Agreement commitments to make Council Tax fairer.
Options being considered this term include revaluation, a review of the Council Tax Reduction Scheme, and an evaluation of discounts, disregards, exemptions and premiums – with options for more fundamental reform in the longer term.
Reforms to council tax would be designed to ensure contributions from households are made as fairly as possible, while maintaining its role as a significant revenue stream which helps to fund essential public services including education, social care, and recycling.
Rebecca Evans, Minister for Finance and Local Government, said:
“We want to modernise the council tax system and make it fairer. We want to make council tax more progressive in its design and delivery.
“This will be a significant piece of work and it will be important, through the consultation we launch next year, that we listen to people’s views and look at what can be practically achieved during this Senedd term - as well as leaving open the potential for further and more fundamental reforms in the longer term.
“I have been speaking with colleagues in local government, who are of course key partners in delivering what we set out to achieve. It’s important we co-design changes with them as well as work with partners in the Senedd and across Wales to find consensus on reform.
“Changes won’t be brought in immediately and it will be important to focus work on the early building blocks needed for change, including revaluation. I want to achieve meaningful reform, with carefully considered ideas that everyone gets a chance to have a say on.”
This work will be carried out in collaboration with the Plaid Cymru Senedd Group, as part of the Co-operation Agreement between the Welsh Government and Plaid Cymru.
Siân Gwenllian, Plaid Cymru Lead Designated Member said:
“Plaid Cymru will work closely with the Welsh Government and local government in Wales to reform what is an out of date, regressive and distortionary taxation. We have long argued that the current system disproportionately impacts poorer areas and change is long overdue. We look forward to developing a fairer and more progressive system as we put our co-operation agreement with the Welsh Government into action.”
A consultation is planned with a view to introducing initial reforms during this Senedd term.
In the last term the Welsh Government removed the threat of imprisonment for non-payment of council tax, created a new exemption for young care-leavers, improved access to discounts for people with severe mental impairments, and launched a national campaign to raise awareness of support including the Council Tax Reduction Scheme.
The Welsh Government’s Programme for Government, and the Cooperation Agreement which was adopted last week, both contained commitments to reform council tax to make it fairer.
Notes to editors
The Minister for Finance and Local Government will make a statement to the Senedd on the afternoon of Tuesday 7th December.
A revaluation exercise would help to ensure every property falls within a tax-band which reflects the property market. It could offer the opportunity to add bands to the top or bottom ends of the scale to better reflect household wealth and people’s ability to pay. Wales last underwent a revaluation exercise in 2003 and the Minister has stated her intention that future revaluations should happen more frequently.
The Council Tax Reduction Scheme was developed at pace following the UK Government abolishing Council Tax Benefit in 2013. A review would aim to ensure the scheme takes full account of the impact of Universal Credit.
The council tax system includes complex arrangements for various discounts, disregarded persons, exemptions and premiums, many of which have been in place since the tax was created in 1993. A review would consider the effectiveness of these arrangements through the lens of the Welsh Government’s goals for a stronger, greener and fairer Wales.