Policy paper

2010 to 2015 government policy: Council Tax reform

Updated 8 May 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Applies to England

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/making-sure-council-tax-payers-get-good-value-for-money Current policies can be found at the GOV.UK policies list.


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.


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.


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.

Appendix 1: Council Tax referendums

This was a supporting detail page of the main policy document.

The Localism Act 2011 introduced a power for the Secretary of State for Communities and Local Government to issue principles that define what should be considered as excessive Council Tax, including proposed limits. The principles are subject to approval by the House of Commons.

From 2013 onwards, any council that wishes to raise its Council Tax above the limits that apply to them will have to to hold a referendum. The result of the referendum will be binding.

The Council Tax referendum principles (ie the maximum increase a council can set without a referendum) for 2014 to 2015 were published in February 2014.

Appendix 2: Council Tax freeze

This was a supporting detail page of the main policy document.

Council Tax freeze 2015 to 2016 scheme

On 26 June 2013 the Chancellor of the Exchequer announced as part of the Spending Round 2013 that the government will provide additional grant funding to support councils that freeze Council Tax in both 2014 to 2015 and 2015 to 2016.

A freeze in 2015 to 2016 means there has been 5 successive years of freeze funding provided by the government and a total funding package of £5 billion.

Freezes since 2010 mean a saving of up to £1,075 for an average household over the course of this Parliament.

Ministers have agreed that the funding for 2015 to 2016 freeze grant scheme will be in the spending review baseline for future years, so there will not be a ‘cliff edge’ effect on council finances. Funding for 2011 to 2012, 2013 to 2014, 2014 to 2015 freeze grants is already in the main local government settlement total for future years.

The 2012 to 2013 freeze grant was a one off grant in that year only and no longer features.

The Council Tax freeze scheme documents show how much grant funding government has been provided to individual local authorities, fire and rescue authorities and police and crime commissioners in the 2011 to 2012, 2012 to 2013, 2013 to 2014 and 2014 to 2015 schemes, as well as the indicative grant amounts in 2015 to 2016.

We have also provided figures on the:

You can also see figures for the average Band D Council Tax bill in England between 1993 and 2014.

Appendix 3: bins and waste collection

This was a supporting detail page of the main policy document.

Local councils provide waste collection services for most people’s homes. It is reasonable for householders to expect their waste to be collected every week, particularly biodegradable waste.

We are working with local councils to:

  • increase the frequency and quality of rubbish collections
  • make it easier to recycle
  • encourage reward schemes to increase recycling

In February 2012, we set up a £250 million fund to help local councils to provide a weekly waste collection service. We invited local councils to bid for money from the fund by August 2012. The fund was open to bids from local councils in England that wish to introduce, retain or reinstate a weekly collection service.

To be considered for funding, councils had to pledge to:

  • provide a weekly collection service to residents for at least 5 years
  • ensure that their service represents good value for money
  • achieve environmental benefits

118 councils submitted final bids. A list of the 87 winning bids and a short description of what each scheme will do can be found below.

Guidance for local authorities on how to deliver a weekly bin collection service was published in January 2014.