Friday, September 05, 2025
Are Welsh council tax payers getting a raw deal?
The website says that researchers at Cardiff University’s Wales Governance Centre have concluded that the impact on poorer households in particular makes the current situation unsustainable:
Comparing the increases in Wales with those in England and Scotland, the researchers state: “Looking just at the very recent history of council tax increases, this is the second consecutive year in which Welsh council tax increases exceed those in England, where increases over 5% typically require a local referendum. Wales’ increases this year are below Scotland, where councils raised taxes by an average of 8.8% this year. But taking a longer-term view, the pattern in council tax increases since devolution is much more one-sided and can be starkly and simply shown.
“Since the advent of devolution in 1999, Wales has seen average annual council tax increases of 5%, compared with 4% in England (with increases constrained by caps and referendum requirements since 2010) and 2% in Scotland (due to the Scottish Government’s council tax freeze policy since 2007-08).
“This means that Welsh council tax bills have effectively tripled since devolution, with notably faster increases than England and Scotland since the start of UK austerity measures in 2010. In 2025-26, council tax revenues are now £440m higher than they would have been had they increased in line with England since 2010-11, and £750m higher than if we had followed Scotland’s trajectory of council tax increases. These are serious sums of money in Wales.
“Over the Sixth Senedd term as a whole (2021-22 to 2025-26), council tax revenues will have increased by over £600m – £233m higher than if bill increases had followed Scotland.
“The Welsh Government would have a straightforward explanation for these increases. By allowing higher council tax rises, Wales has avoided council bankruptcies and has kept vital services like adult and children’s social care and ALN (Additional Learning Needs) provision in a stronger state than across the border.
“This extra resource does of course help fund local services. But the problem is that by choosing Council Tax as the vehicle for providing this extra resource, tax increases have hit Welsh households very unequally.
“Unlike income tax, council tax does not tax households based on their income, nor on the current value of their property. Instead, council tax bills are based on the valuation bands which are roughly based on how much a given property was worth in April 2003 (when the last revaluation was undertaken in Wales). There are nine bands, with A representing the lowest value properties and I the highest. But even though they cover every type and size of property imaginable, rates for bands A-C and E-I vary only quite narrowly around the central band D rate, regulated by a Welsh Government-set formula.
The really big issue of course is, as they say, the limited variation around the B and D rate set by the council means households living in Band A-C properties pay a much higher proportion of the value of their house in council tax than households living in a Band H-I property. This heightens the unfairness of the tax.
The next Welsh government needs to get to grips with this problem quickly.
