The independent Local Government Finance Review Committee today published a report summarising the results of its recent public consultation on local taxation.
The Committee, chaired by Sir Peter Burt, was set up by the Executive to review different forms of local taxation, including reform of the council tax. The consultation document, launched in January this year, sought views on all aspects of the Committee's wide-ranging remit. It expects to report to Ministers in the summer of 2006.
Ministers have set out criteria against which the Committee should consider different forms of local taxation:
- Effect on the local economy/economic growth: in broad terms the economic impact of different local taxation systems will vary depending on what is being taxed (e.g. property or people) and the spread of the tax (e.g. whether set nationally or locally);
- Ability to pay/fairness: issues include both fairness to individuals and fairness between local authority areas;
- Preventing avoidance/collectability: the local taxation system should minimise the scope for avoiding payment and consequently eases the task of collecting the tax;
- Stability/predictability: it is desirable that individual taxpayers should have a reasonably firm idea of their future tax commitments and that local authorities should have a reasonable firm idea of how much revenue the system is likely to generate;
- Relationship to the Benefits System: The Council Tax Benefit Scheme is very important part of the current arrangements - would such a system be required under a reformed or new taxation system?
- Buoyancy: the local taxation system should be flexible enough to accommodate a wide range of economic circumstances and the political will about the levels of taxation;
- The cost of collection: it is probable that some of the possible local taxation systems will be more costly to collect than others;
- Who collects the tax?: some of the possible options would require different forms of collection, for example, local authorities or the Inland Revenue; and
- Shift to a new system/transitional arrangements: looking at what practical steps would be required to change the system, how quickly would that take or if transitional arrangements would be required.
After its launch in January, the Committee received around 350 responses and around 290 were from members of the public and approximately a third of these described themselves as pensioners. Other responses came from organisations and groups including local authorities, citizen and welfare groups, business organisations and political parties.
Copies of the feedback report can be obtained from the Committee's website at http://www.localgovernmentfinancereview.org