Government shelve council tax revaluation

The revaluation of council tax in England has been postponed, the government has confirmed today.

14:35 20 September 2005

The revaluation of council tax in England has been postponed, the government has confirmed today.

It will instead extend its inquiry into local government funding so that any future revaluation will take into account reforms to the way local government is funded.

Council tax revaluation, which involves revaluing properties and the council tax bands in which they are in, started in April this year and would have affected council tax bills from April 2007.

At the time of the last revaluation in England, in 1991, house prices were on average 186 per cent less than today, according to Halifax.

Today's decision is said to be in order to ensure that Sir Michael Lyons' review of funding can consider issues relating to the wider functions of local government.

Local government minister David Miliband said it was necessary to get "a clear and complete picture of what we want local government to do before we tackle how it will be funded".

"We have decided to postpone revaluation from 2007 so that revaluation can take full account of Sir Michael Lyons' further work. We do not believe that revaluation will take place this parliament," he added.

Critics of the government believe it is shelving the review because it fears a backlash over further increases in council tax.

In the recent revaluation carried out in Wales, one in three homes moved up at least one council tax band, leading to higher bills.

The Conservative party, which pledged during the general election to shelve revaluation, had warned that should the same happen in England, the typical household would see their bill increased by 270 a year.

Today, shadow local government minister Caroline Spelman accused Labour's plans of being in "complete disarray".

"The announcement is only a postponement, not a cancellation, and we are still yet to find out what nasty surprises the Lyons review will bring," she said.

"Labour's third-term tax hikes are still to come, and all they have done today is reset the clock on this ticking tax timebomb."

The Liberal Democrats are promising to scrap council tax altogether and replace it with a local income tax.