4M TO LOSE IN COUNCIL TAX REVIEW

First published by: This is Money

FOUR million householders face Council Tax increases of £100 a year or more.

The estimate bears out the worst fears of homeowners in the South East that they will be punished for the rising value of their properties. Many middle-income earners in the South who live in Band D homes will pay an average of £270 more a year if their property moves up a band.

The four (4) million figures has been calculated by Sir Michael Lyons, the former town hall bureaucrat asked to find an alternative to Council Tax last year. His inquiry was shelved by the Deputy Prime Minister when ministers lost their nerve. The revaluation itself was also delayed indefinitely amid fears that it would result in large-scale tax increases. There has also been an outcry over the intrusive inspections bureaucrats have been empowered to carry out.

But an interim report from Sir Michael today urges the Government to go ahead with the revaluation in England - and tells ministers they should be honest about the fact that it will produce 'winners and losers'. His estimate means that four million householders' properties will be pushed up to a higher level in the bands used to calculate Council Tax bills.

An average Council Tax payer in England now has a bill for £1,009 a year. But those who pay bills on that scale for Band C homes in southern England would have to find an extra £112 if their property was reassessed as Band D. Many middle-income earners in the South already live in Band D homes. They pay more than their Band D counterparts in the North because, when the last valuation was carried out in 1991, their houses were already worth much more than similar northern properties.

Under Sir Michael's estimates, if their homes are pushed up to Band E they will face Council Tax increases of £269, up from an average £1,214 to £1,483. By contrast, many Council Tax payers in the North could see their homes drop down a band. That would benefit northerners already said by southern council chiefs to be paying disproportionately low bills.

Local government spokesman said: 'Sir Michael Lyons's interim report brings more bad news for the Government. Earlier this year, Labour panicked and postponed their revaluation for fear it would damage their chances in May's local elections. 'But this report only confirms what we already knew - when the revaluation does come, at least four million people will be hit with even higher Council Tax bills.' The warning of big hikes after revaluation undermines the Chancellor’s hopes of calming the Council Tax crisis by keeping increases next spring to around 5 per cent - still more than double the rate of inflation.

The Government has pumped an extra £1.1bn of taxpayers' money into town hall coffers to keep the bills down. A source close to the Deputy Prime Minister said there was 'nothing surprising' in the suggestion that four million householders would be paying more. 'By implication if we had four million people moving up, we would have had four million people moving down, because the intention was never for additional revenue to come to the Government,' the source said.

He said people could not continue to pay Council Tax based on 1991 property values indefinitely. Town hall money-wasters condemned HALF of all English councils are wasting money, a Whitehall spending watchdog warned yesterday. The Audit Commission said the authorities met only the minimum standards for the way they spent their share of more than £80bn a year. 

The findings come as the Government and local authorities argue over who is to blame for soaring Council Tax bills. Commission chairman James Strachan said: 'We are concerned that half of all councils are only achieving at, or below, what we consider to be minimum acceptable level.' The watchdog states: 'Internal control, how well a council manages its risks and has effective arrangements to ensure proper use of public funds, is the area where councils most consistently underperform.'Hull - home town authority of Deputy Prime Minister, who is in charge of local government - was among ten councils labelled the worst performing in England.

Some council chiefs believe the Audit Commission had been pressured by the Chancellor to make tougher judgments on local authorities. But the commission did find the Tory-run shire counties, which ministers want to abolish, were more efficient than smaller 'unitary' authorities favoured by the Government. Eric Pickles, the government spokesman, said: 'The shires are among some of the best performing councils, which makes the desire to abolish them all the more bemusing.' Christine Melsom of Council Tax protest group Is It Fair? said: 'All councils waste a certain amount of money but I think the majority of the problem stems from the Government and the shortfall in grants they give town halls.'

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX. 

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