Time to decide on fair council tax changes, says economist

http://www.bbc.co.uk/news/uk-wales-politics-29871748

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Preparatory work to make council tax fair should start now if changes are to be introduced after local authorities are merged, a former Welsh government adviser has said.

Economist Gerry Holtham said council tax bills should reflect property prices.

Ministers have signalled that they are thinking about possible changes to the council tax system.

However, they have ruled out reforms within the next three to five years.

The Welsh government is currently overseeing a reorganisation of local councils which will cut their numbers from 22 to as few 10.

Prof Holtham told BBC Wales' Sunday Politics that changes to local council funding could not be introduced now because of the mergers.

"But if they (ministers) are going to do this in three to five years time, they've got to be thinking about it now," he said.

"Now is the time to be consulting, thinking about it, deciding what it is they want to do and what it is they'll need to do if they decide to implement reform in say three to five years time.

"You don't want to be starting to think about it at the time when you want to be doing it."

Proportional taxing

Council tax bands were last revalued in Wales in 2005 and in England in 1992.

Prof Holtham said the tax should be "indexed" so it changes automatically with house prices.

He added that the tax should be proportional to the value of homes - so everyone paid, for example, 0.9% of the value of their home - meaning the wealthiest people would pay more.

It could also save the Welsh government up to £20m a year in council tax benefit, he said.

In a statement, the Welsh government pointed to the Wales Bill, which allows for the creation of new devolved taxes.

"We have no plans for changes to the model of local government funding prior to local government reorganisation," a spokesperson said.

"The Wales Bill opens up further possibilities for funding mechanisms for the future, enabling the Welsh government to take decisions to support growth and ensure fairness across Wales."