Council tax report delayed again

The Lyons review into council tax has been postponed yet again, to allow it to consider this week’s major reports on planning, transport and skills.

Sir Michael Lyons was supposed to publish his report into local government finance last December, but it was postponed a year to allow him to also consider any new functions that councils should take on.

But yesterday chancellor Gordon Brown said the study would again be delayed until next spring to allow Sir Michael to look at the implications of the Eddington transport review, the Barker planning report and the Leitch study into skills on local authorities.

Sir Michael welcomed the delay, saying the three reports represented a “significant cluster of thinking” that would help local authorities “make the most powerful and effective contribution to future economic prosperity and infrastructure”.

But the Conservatives expressed dismay at yet another set back in a report that is expected to announce far-reaching changes to the way councils are financed – and accused the chancellor of a damage limitation exercise.

Shadow local government secretary Caroline Spelman said the Lyons review was “actively” considering a new local house price tax, which is already being introduced in Northern Ireland from April and has been recommended for Scotland.

“It is no surprise that Labour are trying to keep their tax-raising plans under wraps. Whatever option Gordon Brown chooses to implement, it is clear he will target families and pensioners whose only crime is to live in a nice neighbourhood,” she said.

She noted the small print in yesterday’s pre-Budget report which reveals ministers are expecting council tax receipts to rise by almost six per cent in the coming year and said this proved Labour was planning “an inflation-busting council tax hike this April”.

However, Treasury officials said the delay would benefit Sir Michael’s review and would also give him the opportunity to provide recommendations on the recent local government white paper. He is set to publish a discussion document next Monday.