Author Archives: Mike Bell

Council tax is one of the most outdated and unfair taxes in the UK today — and yet it continues to underpin the finances of every local authority in the country.

The system we use now was introduced over 30 years ago, and it still relies on property valuations from 1991. In that time, the housing market has transformed, but the tax bands have not. As a result, households are paying wildly different amounts of tax for properties of similar value today, simply because their homes were assessed differently decades ago. That’s not fair, and it’s certainly not progressive.

In places like North Somerset, we see the effects every day. A modest three-bedroom home in Weston-super-Mare might be paying more council tax than a far more valuable property in central London, simply because of the quirks of the old banding system (and then compounded by the government funding formulas). Families on modest incomes, pensioners, and young renters bear a disproportionate share of the burden, while those in high-value homes often pay less, relatively speaking.

Even the Institute for Fiscal Studies has called council tax “outdated and arbitrary”. And they’re right. Research shows that the poorest households pay a higher percentage of their income in council tax than the wealthiest. That’s not just bad economics — it’s bad ethics.

The Lyons Review, commissioned by the last Labour government in 2007, highlighted many of these problems and suggested a path forward. It called for regular property revaluations, new council tax bands to reflect modern housing values, and greater flexibility for councils to shape local taxation in ways that match their communities. Yet nearly two decades later, little has changed.

It’s time to revisit those ideas — and go further.

What would real reform look like? Here are steps we should be seriously considering:

1. A full revaluation of properties across England and Wales, bringing council tax bands in line with today’s market values.
2. The introduction of new, higher bands for very expensive homes, so that the wealthiest households contribute a fairer share.
3. A shift towards an income-based local tax, such as a local income tax, which the Liberal Democrats have long supported.
4. Greater devolution of fiscal powers to local councils, so they can tailor fairer funding systems to their communities.
5. Stronger protections for those on low incomes, including national support for relief schemes and discounts.

And this brings me to one of the most glaring inconsistencies in the current system: Council Tax Support (CTS) or council tax benefit in the old terminology.