Council Tax
The question
To ask the Secretary of State for Housing, Communities and Local Government, when his Department plans to implement Council Tax equalisation as part of proposed funding reforms; and what assessment he has made of the potential impact of those reforms on councils with lower ability to raise local revenue.
Answered by Alison McGovern
On Thursday 20 November, we published the government response to the Fair Funding Review 2.0, which sets out the government’s plan to introduce a fairer and evidence-led funding system.
As part of this, the government is clear that it has an important role as an equaliser for local government income, directing funding towards the places that are less able to meet their needs through locally raised income. The government will therefore apply a resource adjustment which accounts for the differing Council Tax raising ability between local authorities which will be implemented as part of the 2026-27 Local Government Finance Settlement and will be phased in over three years.
The resource adjustment achieves the objective of full equalisation. This provides funding in a way that supports local authorities to offer a consistent level of service to their residents regardless of their tax base.
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