Lyons Inquiry

The Lyons Inquiry was an independent inquiry into the form, function and funding of local government in England. Appointed jointly by the Chancellor of the Exchequer (Gordon Brown) and the Deputy Prime Minister (John Prescott) in the summer of 2004, Sir Michael Lyons produced several reports over the next 3 years, culminating in a final report on the future of local government published alongside the Chancellor’s Budget in March 2007.

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While local government activities in England are financed from a variety of sources, including central government grant, the key local taxes since 1992 have been the uniform business rate (set centrally but collected locally) and council tax. Both are property taxes, based on the rental or resale value of a property at a given point in time.

The Local Government Act 2003[1] introduced a commitment to revalue all domestic properties in England and Wales, for the purposes of calculating council tax bills, by 2007. This would have been the first revaluation to take place since council tax was introduced in 1993.

Following that Act, the Government commissioned a Balance of Funding review,[2] which reported with recommendations in July 2004.[3] At the same time, a House of Commons Select Committee conducted an inquiry into local government revenue, again reporting their conclusions in July 2004.[4]

In July 2004 the Government appointed Sir Michael Lyons to undertake a comprehensive Inquiry into local government funding, focussing in particular on:

  • the most pressing issues affecting local government funding
  • how council tax should be reformed
  • other possible sources of local funding, such as local income tax, reformed non-domestic rates and other local taxes and charges
  • the implications for the financing of possible elected regional assemblies

Work on the Inquiry began in ernest in October 2004, and encompassed the commissioning of research and a number of public consultation events.

In November 2004, the voters in North East England rejected a proposal for an Elected Regional Assembly, following which the Government abandoned its plans to proceed with the introduction elected assemblies across England.

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