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Last Updated: Thursday, 15 January, 2004, 16:27 GMT
Council funding reforms demanded
Council tax protesters
Reforming the council tax is just one proposal
New proposals to change the way local councils raise money have been unveiled by local authority chiefs.

The Local Government Association plans include major changes to council tax, councils regaining control of business rates and getting a part of income tax.

This would create a more accountable and transparent system, it says.

"Local voters should know who is to praise or who to blame for good and bad spending decisions," LGA chairman Sir Jeremy Beecham said.

Unfair council tax?

But Local Government Minister Nick Raynsford said it would be "fanciful" to suggest all the LGA proposals for England could be viable.

Council tax explained

The LGA, which represents councils led by all parties, wants local authorities to be able to raise a larger proportion of their own income so that they depend less on central government.

Three-quarters of local council income currently comes directly from the government.

The LGA would like the balance reversed so 75% is raised locally.

It also argues the present council tax system is unfair because it is not related to people's incomes and voters cannot see a clear connection between local taxes and local spending.

The association wants to see a reformed council tax with more bands, more frequent valuations and a new discount system.

Vehicle excise duty
Sales tax
Stamp duty
Land value taxes
Tourist (bed) ta
Green taxes
Congestion charges

The LGA is also suggesting more charges for services.

But the key proposal is for a proportion of the national income tax to be ring-fenced and transferred directly to councils so they can run local government.

An alternative would be a local income tax, like that in place for the Scottish Parliament, where 3p can be added or subtracted from the standard rate.


The LGA's document is intended to provoke debate ahead of the government's review of council tax and does not represent its official policy.

Sir Jeremy told BBC News council tax was becoming "increasingly unsustainable".

And Tony Blair has said there is "no justification" for rises in council tax - which last year averaged at 13% - when central government had increased its support for local authorities.

Thousands of people are expected to descend on London this Saturday in protest at council tax levels.

I am sick and tired of my council tax bills going up year after year
Debbie, Gateshead, Tyne and Wear

Mr Raynsford said all options were being considered, including reform of the council tax and doing away with it.

Shadow local government secretary David Curry said ministers were "at the heart of the current council tax crisis" and had loaded expenditure demands on local authorities without giving them grants to pay for them.

The Liberal Democrats already support the idea of a local income tax to replace the council tax.

The BBC's Kevin Bocquet
"The more cash councils raise for themselves the more control they'll have"

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