Council Tax System Biased Against the North, Handing London £3bn Annual Subsidy, Says Thinktank

The structure of England's council tax system effectively hands London a subsidy worth around £3 billion a year, according to analysis by the Resolution Foundation reported by The Guardian.

The thinktank found that households outside London are paying hundreds of pounds a year more in council tax than they would under a system it considers fair, arguing that the current banding structure is biased against the north of England.

Council tax in England is based on property valuation bands that were last set using property values from 1991, a system that critics have long argued fails to reflect subsequent shifts in relative property prices between regions, including the sharp rise in London property values relative to much of the rest of the country.

The Resolution Foundation's findings add to a long-running debate about the fairness of England's local taxation system, with various organizations over the years calling for a revaluation of council tax bands or a broader overhaul of how local services are funded.

The report was published as attention in UK politics has increasingly turned to questions of regional inequality and the distribution of resources between London and other parts of the country, an issue frequently raised in the context of government commitments on devolving power away from Westminster.

Further detail on the Resolution Foundation's proposed remedies, or any government response to the findings, was not included in the available report.