Magazine article Public Finance

Poll Paralysis

Magazine article Public Finance

Poll Paralysis

Article excerpt

It's hard enough for politicians to come up with sensible solutions for the funding of local government at the best of times. But during an election it seems virtually impossible.

Last week saw the Conservatives announce a surprising U-turn on the council tax revaluation due in England in 2007. Having previously supported revaluation, the party now claims it is in fact a '£2bn stealth tax' and will have nothing to do with it.

So if the Tories win the election, there will be no revaluation for at least four years. Council tax will continue to be paid on the basis of 1991 property prices, despite the huge regional disparity in house price inflation since then.

Not to be outdone, Labourthen came up with its own policy reversal. Local government minister Nick Raynsford boldly announced that higher council tax bands were no longer on the agenda.

Additional bands were, of course, suggested as part of last year s Balance of Funding review, which Raynsford chaired. Another of the review groups proposals, a supplementary local income tax, was also rejected by the prime minister last week.

With so many options now ruled out, it makes Sir Michael Lyons' current review into the council tax all the more problematic. …

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