Policy

Making sure Council Tax payers get good value for money

Issue

Council Tax bills in England more than doubled between 1997 and 2011. We want Council Tax payers to be able to veto excessive rises, to help them reduce their living expenses. We also want to make sure that they get good value for money from their councils.

Actions

Council Tax freeze

We will have provided funding of up to £5.2 billion to help freeze Council Tax over the lifetime of this Parliament.

Council Tax referendums

We have changed the law to give local residents the power to veto excessive Council Tax rises.

Bins and waste collection

We’ve set up a Weekly Collection Support Scheme to support local authorities to provide weekly collections of household waste and recycling.

Reducing the costs of administering Council Tax

We’ve given local residents a new legal right to choose to pay their Council Tax bills in 12 monthly payments, rather than the fixed 10, in the course of a year.

Giving councils more freedom to decide what discounts people should get for second homes and empty homes

The government has given councils greater local flexibility to choose to waive special tax relief on second homes and empty homes. This will allow councils to increase the amount of Council Tax they collect without increasing the overall band D Council Tax rate.

Removing barriers to extended families living together by providing a national Council Tax discount for annexes

We’ve introduced a new national Council Tax discount for family annexes.

Background

Council Tax is the main source of locally raised income for many local authorities. This helps make up the difference between the amount a local authority wishes to spend and the amount it receives from other sources, such as government grants.

Council Tax replaced the Community Charge on 1 April 1993 and is calculated based on the Council Tax band assigned to the property. Bands are assigned based on the value of the property in 1991, or the most recent revaluation.

The government’s intention to freeze Council Tax for at least 1 year and give local residents the power to veto excessive rises in Council Tax bills was outlined in the Coalition Agreement.

The government announced on 23 March 2011 that all eligible local, fire and rescue and police authorities in England had decided to freeze or reduce their band D Council Tax in 2011 to 2012 and would therefore all be eligible to get the extra grant.

On 8 October 2012 the Chancellor of the Exchequer announced new support for local authorities in England to help them freeze Council Tax for a third year.

On 26 June 2013 funding for 2 further years (2014 to 2015 and 2015 to 2016) of Council Tax freeze was announced by the Chancellor of the Exchequer.

Who we’ve consulted

The government consulted on introducing technical reforms to Council Tax in October 2011.

The consultation paper discussed possible changes to Council Tax charges for people who own a second home or an empty property. It also covered other potential reforms including changing the arrangements for paying Council Tax by instalments.

In August 2013 the government invited views on the level of Council Tax that should apply to properties with self-contained annexes.

Bills and legislation

The Localism Act 2011 provides local residents with the power to approve or veto excessive Council Tax rises. This replaced the previous power of the Secretary of State for Communities and Local Government to set limits for Council Tax increases.