Proposed Local Government Finance Legislative Competence Order

Michael German

Pre-ballot Information: Outline Proposed Legislative Competence Order

Outline of proposed Order

Field 12 (local government) of Part 1 of Schedule 5 to the Government of Wales Act 2006 is to be amended as follows:

Add the following matters to Field 12: local government: provision to amend legislation relating to local government finance in Wales.

Pre-ballot Information: Explanatory Memorandum

Policy Objectives of the Proposed Order

The raising of tax for local government, through council tax & business rates, drives many aspects of the public policy agenda in Wales; from

the fairness of the system itself,
the impact of paying on many people and on businesses,
the need for periodic revaluations of the tax and the efficiency of its collection,
the so-called gearing effect which drives up council tax faster than the prevailing inflation rate,
the applicability of different discounts and relief schemes
the localisation of business rates
the accountability of local authorities

The issue has been the subject of many debates in the Assembly and in wider civic society; and of many formal reviews including most notably the long running Lyons review which has a limited remit encompassing Wales and its local government finance system.

The LCO would enable measures to be brought forward to repeal the council tax and replaced it with a different and fairer system, based on ability to pay; would enable the re-localisation of business rates (as the BIDS system has begun to do at the margins) and a more flexible form of rebates and reliefs to better promote other public policy agendas.

Support for reform of the local government finance system, in a way that could only be achieved through this LCO, has come from a wide variety of sources, either in support of abolition or simply reform of the tax, including political parties, newspapers, pensioners groups, specially created lobby groups, and others in civic society.