Senedd Wales

Senedd Wales

Reforming local taxation: Senedd to consider amendments to the Local Government Finance (Wales) Bill

Published 08/07/2024   |   Reading Time minutes

On Tuesday 9 July, the Senedd will have its second opportunity to amend the Local Government Finance (Wales) Bill.

The Bill places a duty on Welsh Ministers to conduct five-yearly council tax revaluations and increases the frequency of non-domestic rates (business rates) revaluations. It also removes duties on local authorities to publish council tax notices in newspapers, which prompted a strong response from some media providers in Wales.

The Local Government and Housing Committee considered 45 tabled amendments to the Bill on 13 June 2024. Of those, only 8 were agreed, all of which were Welsh Government amendments.

This article summarises some key discussions during Stage 2 scrutiny.

Council Tax revaluation by 2028

The Welsh Government’s Phase 1 consultation - A Fairer Council Tax proposed to undertake a revaluation of all domestic properties on 1 April 2025 using existing powers. These powers were last used by the Welsh Ministers to revalue properties in 2005. There is currently no statutory requirement to update property valuations on a regular basis.

The Bill, as introduced, would have established statutory council tax revaluations from 2030, and every fifth year after (in 2035, 2040, 2045 etc). However, a Phase 2 consultation on local taxation reforms, undertaken between November 2023 and February 2024, highlighted a split in public opinion on the speed of reform.

On 15 May, the Cabinet Secretary for Finance, Constitution and Cabinet Office, Rebecca Evans MS, told Members that despite “a clear appetite for reform”, this would now be delivered over a “slower time frame”. As a result, the revaluation for 2025 was abandoned..

The Cabinet Secretary brought forward amendments to the Bill to enable statutory council tax revaluation cycles to begin in 2028. Luke Fletcher MS had tabled an amendment which sought to compel the Welsh Ministers to implement reforms by 1 April 2025, and spoke of his disappointment that a revaluation of domestic properties would not proceed as planned. He noted that it was an opportunity to do something “quite revolutionary”, but also recognised that the time to act on reforms in 2025 had now “passed”, and withdrew the amendment.

Referendums on council tax increases

Seeking to add new provisions to the Bill, Peter Fox MS tabled an amendment that would place duties on local authorities to hold a referendum if council tax increases exceeded 5%. The Member stated that holding such referendums would “increase transparency and accountability”. Similar powers exist in England, but do not extend to Wales. The Welsh Ministers do currently have some powers to limit (cap) excessive increases in the budget requirement of local authorities, but these powers have never been used.

The Cabinet Secretary regarded this amendment as a “significant deviation” from the Welsh Government’s approach to “localism”, suggesting that the powers for local referendums in England were introduced to “restrict local government democratic accountability”. The amendment was rejected.

Seeking “value for money” for public notices

The section of the Bill that attracted significant attention is the new duty on local authorities to publish council tax notices online. The Bill also removes the current duty to publish those notices in newspapers. Following earlier scrutiny of the Bill, the Committee acknowledged section 20 wouldn’t prevent local authorities from publishing such notices in newspapers, but “given the current financial pressures, local authorities may choose not to do so in order to make savings”.

An amendment tabled by Peter Fox MS, sought to remove section 20 from the Bill in its entirety. The Member expressed concerns about access to information for the elderly, as well as ensuring transparency and accountability of local decision-making. Members supporting the amendment shared concerns about the impact of the provisions on local news outlets, with James Evans MS stating that this could be “detrimental to the viability of a number of local news outlets across the country”.

The Cabinet Secretary stressed that all council tax payers would still receive information about council tax as part of their annual bill, but that the current duties on local authorities result in an “inflexible approach”. The Minister emphasised that section 20 does not prevent local authorities from publishing notices in newspapers, but that it is important that local authorities “achieve value for money”. The Cabinet Secretary asked Members of the Committee to resist the amendment.

Section 20 remains in the Bill.

Enhanced scrutiny

The Local Government Finance (Wales) Bill does many things, but in a number of cases, it’s providing Welsh Ministers with powers to make subordinate legislation (regulations) across a range of matters relating to local taxation. That means the detail of what might happen with areas such as non-domestic rates reliefs, exemptions for businesses and council tax discounts, won’t be known until that subordinate legislation is made.

Stakeholders, as well as Members of the Senedd’s Finance and Legislation, Justice and Constitution committees expressed concerns about the broad regulation-making powers for Welsh Ministers in the Bill.

The Local Government and Housing Committee had recommended in its Stage 1 report on the Bill that the Welsh Government includes enhanced approval procedures for draft Welsh Government regulations in relation to this legislation. This would allow Senedd committees “appropriate time for scrutiny”, beyond what is currently provided for subordinate legislation.

Peter Fox MS tabled amendments to this effect, that would provide the enhanced scrutiny procedures the Committee had called for on a specific set of regulations. This would mean that certain regulations laid using powers in this Bill would be subject to a period of 60 days scrutiny compared to the standard 30 days. However, the Cabinet Secretary didn’t think this was proportionate, noting that these amendments “could disadvantage ratepayers in Wales by delaying or even preventing the provision of new support”. All amendments relating to enhanced approval procedures were rejected.

Review of new powers

In its Stage 1 report on the Bill, the Local Government and Housing Committee called for amendments to ensure a process for reviewing new powers in the Bill, particularly in relation to: powers to confer or withdraw non-domestic rates relief; powers for specifying artificial avoidance techniques (measures used by some to avoid paying tax); and, where substantial changes to council tax discounts are made by regulations (such as changing, reducing or disapplying existing discounts).

The review should, according to the Committee, be undertaken before the end of the Seventh Senedd and include:

  • an assessment by the Welsh Ministers of alternative legislative mechanisms for making changes to Welsh legislation in the context of non-domestic rates reliefs, exemptions, multipliers, anti-avoidance provisions and council tax discounts; and
  • a requirement to consult the Senedd.

Amendments tabled by Peter Fox MS, would have placed such a requirement on the Welsh Ministers. Responding to the amendment, the Cabinet Secretary noted that the Welsh Government had accepted in principle, the Committee’s recommendation, and that the Welsh Government:

Will amend the explanatory memorandum after Stage 2 to include a commitment to undertake a post-implementation review of the operation and the impact of the legislation before the end of the seventh Senedd.

The Cabinet Secretary also highlighted the Senedd’s ability to “undertake post-legislative scrutiny, should it choose to do so”. The Cabinet Secretary called on colleagues to “resist” the amendments, which were rejected.

You can follow Stage 3 of the Bill’s proceedings (09 July) on

Article by Osian Bowyer, Senedd Research, Welsh Parliament