Rayner ‘wants council tax rise in the south to fund the north'
Council tax bills will rise in the south to fund investment in the north, it has been reported.
Angela Rayner, the deputy prime minister, is to announce plans for a 'progressive' funneling of Government grants to authorities in deprived areas.
According to The Times, Ms Rayner will set out a new formula which will see the grants redistributed depending on local needs.
The changes are expected to reduce the grant funding received by wealthier local authorities in London and the south east, which experts said would likely prompt council tax hikes to make up for any shortfalls.
Approximately half of council incomes currently come from Government grants.
Ms Rayner will reportedly cite discrepancies in council tax levies between richer and poorer areas.
A three-bedroom semi-detached house in Hartlepool, Co Durham, comes with a higher levy than an £80 million mansion in Westminster.
David Phillips, of the Institute for Fiscal Studies, told the newspaper that reform was overdue.
'It's been 20 years since we've had an effective system to allocate funding between councils so it is out of whack and the changes are going to be big,' he said.
'We would expect urban areas in the Midlands and north to benefit, and maybe some of the east London boroughs. But the Westminsters and Wandsworths of this world, which set very low council tax, will lose.
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