Britain’s council tax is arbitrary, regressive and needs fixing

THE FINANCING of local authorities in Britain can stir passions and topple leaders. In 1989 Margaret Thatcher’s Conservative government introduced the “poll tax”, an average annual charge of £392 (£934 or $1,190 in today’s money) on every voter. It was very unpopular, leading to violent clashes with protesters in London, and contributing to the ousting of the prime minister eight months later.Three decades on, the levy that replaced Thatcher’s poll tax is also in trouble. Council tax is among Britain’s most regressive. It pays for services used every day. In 2023, 296 local authorities raised nearly £40bn—half their funds (the rest comes from central government)—from 25m householders in England. It pays for services such as social care, which accounts for half of their spending and the growth in which is partly why fixing local-government finances is so urgent, but also schools, policing, libraries and much else. On December 6th the Local Government Association, a club for local authorities, said that as many as a fifth of them risk financial collapse. On November 29th Nottingham’s council had become the fifth local authority in a 12-month period in effect to declare bankruptcy.