Council tax bills could be cut by hundreds of pounds each year if powers are devolved, report finds

The think tank estimates that the average tax cut annually for households across Yorkshire would be hundreds of pounds.

In North Yorkshire, the average council tax payer could see their bill slashed by £625, while in Leeds it could reduce by £478.

In Sheffield, the Centre for Cities estimates that bills could come down by £548.

Under the current system, in some parts of the country, residents in the cheapest properties pay council tax at rates 10 or more times higher than taxpayers in the most expensive homes.

The think tank says this can be eliminated with a progressive tax.

It is calling for annual revaluations of council tax bands, three more bands to account for changes in property values and devolving rate-setting powers to local and combined authorities.

Andrew Carter, chief executive of Centre for Cities, said: “Tackling the unfairness in the council tax system gives a majority of people a tax cut. This means much-needed savings for a majority of households in every part of England.

“Government should take the opportunity to give places more power over how taxes are collected locally at the same time as it plans to widen devolution of transport and budgeting powers.

“The fragmentation of local authorities and their lack of autonomy over their own revenues are major contributors to local government’s financial instability.

“These are issues affecting councils across the country, so we need a nationwide reset that neither hiking council tax on everyone nor extra central government grant can provide.”

The new Labour government is committed to increasing devolution to the regions and extending greater powers to local authorities.

It is focusing on transport, planning and skills, although is not thought to be considering handing down more fiscal controls.

Across Europe it is very common for regions and local governments to set tax rates.

While the UK has among the lowest shares of total tax take collected at a local level of any OECD nation, at just 5 per cent – far lower than the rest of the G7.