Fair Funding, 1991 Prices

England is reforming how councils are funded, but council tax still relies on property valuations from 1991. Can a system be fair when one half remains stuck in the past?

4 October 2026

Sir,

There is an entirely reasonable principle behind the Government's changes to council funding: places with greater need, and less ability to raise money themselves, should receive more help.

The difficulty comes when somebody has to make up the difference.

Hammersmith & Fulham is considering a council tax increase of up to 150% on its own share of the bill, as its government funding is projected to fall sharply. The figure is a budget scenario, not an agreed increase. The Government has also announced that it will remove the usual referendum limits for it and five other authorities with unusually low council-tax bills for 2027–28 and 2028–29.There is an argument for that too. Why should taxpayers elsewhere subsidise exceptionally low council tax in some of the wealthiest parts of the country?

But if the object is fairness, council tax is a curious instrument with which to finish the job.

In England, council-tax bands are still based on what homes would have been worth in 1991. Property prices have changed rather a lot since John Major was in Downing Street, and they haven't changed equally everywhere.

Individual properties can be reassessed, but there has been no general revaluation to reflect those changes.

So we are updating how we decide which councils need money while continuing to use a property-tax system whose underlying valuations are more than three decades old.

That does not mean people in historically low-tax boroughs should never pay more. Nor should an expensive postcode automatically entitle a council to more government money

.It does suggest the reform stops half way

If we are prepared to reconsider which councils need money, how much they need, and how much they can reasonably raise themselves, the tax used to raise some of it also deserves another look.

It is difficult to build a modern system of local government finance while leaving one of its foundations from 1991.

R. D. Kerr