Council tax is no longer fit for purpose, the Government needs to make it fairer for all - Jayne Dowle

Why then, apart from some murmurings about deputy PM and Housing Secretary Angela Rayner perhaps slashing the single person discount, is no-one in the Cabinet finding the mettle to tackle the biggest elephant in the room – council tax?

Talk about a ‘black hole’. Council tax is no longer fit for purpose. According to research earlier this month by house sale company Sell House Fast, more than 4.4 million council tax bills in England and Wales are currently unpaid, piling up a staggering £4.4bn in debt. Think of what that money could pay for.

As Rayner gives six struggling local authorities, including Bradford Council, special permission to instigate council tax increases of up to 10 per cent this year, calls for reform are sounding louder than ever. Something must be done, campaigners and think tanks say, but no-one with the power to make a difference seems to find time or inclination to start the ball rolling.

Under existing rules, town halls must stick to an annual council tax increase of no more than five per cent or find themselves obliged to hold a local referendum on the matter.

Rayner’s compliance with demands from cash-strapped councils means that 560,000 people in Bradford will face the highest proportional council tax bill rise in the country; an increase four times the current rate of inflation, standing at 2.5 per cent.

For many people in Bradford, this will be a huge financial blow; it’s Britain’s poorest households handing over an increasing share of their income on council tax, finds the Resolution Foundation.

Highlighting the “regressive” nature of council tax, meaning poorer households pay more of their income towards the pot than richer ones, the think tank, which works to highlight problems experienced by those on lower and middle incomes, says failure to reform has made it progressively worse.

Indeed, so dire is the situation, it’s now comparing council tax to the poll tax that led to a protest riot in Trafalgar Square and contributed to the downfall of Conservative Prime Minister Margaret Thatcher in 1990.

“Council tax is consuming a larger share of their poor families’ household budgets, who are spending almost as much on these bills as they pay in income tax,” says Lalitha Try, an economist at the Resolution Foundation. “This terribly designed tax increasingly resembles the very thing it was meant to replace – the dreaded poll tax.”

Council tax is essentially a simple system; unlike the poll tax, which taxed every resident in a certain area at the same sum, laid down by the local authority, council tax is a property-based tax, so based on the value of a property, usually payable regardless of whether you are a tenant or a homeowner.

Thanks to a double whammy of out-of-date values still being used to assess for council tax, and increasing local authority outlay, particularly for social care, it is now often the case that those living in less-than-privileged postcodes, including across the north of England, find themselves paying far more than others in more favoured areas.

In Wales revised property values were introduced in 2003. Campaigners in both England and Scotland say that fresh valuations are well overdue, but many would like to see a fully-thought-out root and branch reform of the whole way we pay for our bins collecting, our libraries, parks and social care.

The Fairer Share Campaign, for instance, argues that instead of council tax, it would be much more equitable to have a flat rate of 0.48 per cent of the value of a property payable by property owners – not tenants – and that other property-related taxes, Stamp Duty and Bedroom Tax, should be scrapped.

Under this ‘proportional property tax’, property values would be updated annually and automatically to ensure that increases - or decreases - in the value of a property are accurately reflected in what the owners have to pay.

There, that’s half the government’s work done for it already. Time to pick up the poisoned chalice of council tax and make it fairer for all.