Revaluation of Council Tax in Wales – an early acid test
Here, I explore a long-neglected issue in public policy making, but one which has a long history in Wales, and which has a contemporary relevance.
The issue is that of land and property, and particularly its taxation.
One of the earliest challenges to face the in-coming, minority Plaid Cymru administration in Wales will involve a revaluation exercise, designed to make Council Tax fairer. The timetable for implementation of that exercise is already set out in statute, culminating in April 2028. The commitment has its origins in the Cooperation Agreement between the then Labour Government and Plaid Cymru during the last Senedd term. As the First Minister of the time, my ambition for the Cooperation Agreement was that it should bind two Parties together in pursuit of solutions to the most difficult policy problems. Matters which could be taken forward by a single Party did not require an agreement. But many of the most challenging problems required, I believed, a wider political effort, if success was to be achieved. The Cooperation Agreement was signed on 1 December 2021 and was intended to last for three years.
A commitment to council tax revaluation was certainly worth its place on that list. While Scotland and England have seen no revaluation of the council tax based since its inception (reinforcing, in the process, the inherently regressive nature of the tax) Wales has carried out one revaluation exercise in 2005. As someone involved at the time, I think I can fairly say that the level of public hostility to which the exercise gave rise was considerably greater than anticipated. In vain did Ministers explain that revaluation did not raise any additional money: it simply distributed existing bills in a fairer way. Those whose bills went down, or were held down, remained silent. Those whose bills went up took full advantage of the newly emerging e-mail to make their anger known. A hastily assembled (and expensive) ‘transition’ scheme had to be put in place to mitigate the impact at household level. While the policy was undoubtedly the correct one, the political and administrative folk-horror which became attached to it meant that nearly 20 years went by before the policy challenge could be grasped again.
The Cooperation Agreement came to a premature end in May 2024, following the elections of new Leaders to both Plaid Cymru and Labour. In the process, the commitment to revaluation took a step back from the intentions of the Cooperative Agreement. Now, instead of implementation before the elections of May 2026, the date was moved into the new Senedd term, in legislation which also commits future Seneddau to regular, five yearly revaluations in future.
That date, however, means that extensive preparatory work will already have been undertaken, often led by expert advice from the Institute of Fiscal Studies. The new Government will have to make rapid decisions, in a contested area, where the political stakes are high. A great deal will be learned from the approach taken. In opposition, Plaid Cymru generally made great play of what it portrayed as Labour’s lack of ambition, especially in tackling poverty. Council tax revaluation is a responsibility which lies entirely in the hands of the Senedd and its Government. In this case, there is no Westminster Government to blame. The radicalism – or otherwise – of the new administration’s approach will be assessed against its proximity to the advice provided by the IFS. From its first report in 2020, the Institute concluded (unsurprisingly) that the system was ‘ripe for revaluation and reform’. It provided a menu of potential measures to take forward that reform, ranging from simple revaluation (keeping the present banded system but updating property values) through changes to the bands themselves and onwards to more radical reforms of the system. And in that regard, the incoming Government will also have at its disposal a wealth of recent implementation detail surrounding an entirely different system of taxation, Land Value Tax (see A Land Value Tax for Wales? Claims and contexts and The evolution of Wales’ fiscal landscape), as well as over a century of history since Lloyd George’s commitment to LVT in his People’s Budget of 1908. In opposition Plaid Cymru often criticised what it saw as a lack of progress in this more fundamental possibility for reform. That too will need to find a place in the decisions to be made in the coming weeks, rather than months.
It has rapidly become conventional wisdom that the elections of May 7th marked a seismic shift in Welsh politics, and in many ways that is hard to gain-say. It can be argued more fundamentally, I believe, that the most striking feature of the election outcome was the resilience of long-established Welsh political preferences. For more than 150 years, Wales has preferred governments of the left of centre. Left of centre parties secured 60% of votes cast in May’s elections, leaving parties of the political Right sharing the remaining 40%. Change took place more between parties within the two blocks, than between the blocks themselves.
That is why the revaluation issue is relevant. It provides an early test of the extent to which an incoming administration will implement its self-asserted radicalism in office. It also represents a challenge for the much-diminished Senedd Labour Group. The arithmetic of the new term means that nothing progressive can make its way through the Senedd without the involvement of Labour. The implementation of council tax revaluation will also provide an early test of the extent to which an appetite exists for cooperative action, in pursuit of radical change. And all that, in turn, will be help shape the policy and political landscape of the next four years in Wales.
About the author
Mark Drakeford was a Member of the Welsh Parliament between May 2011 and April 2026. He served as First Minister of Wales and Leader of Welsh Labour from 2018 to 2024. He was Cabinet Secretary for Finance and Welsh Language until May 2026. Mark is also an Honorary Distinguished Professor in the School of Law and Politics at University of Cardiff.
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