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Rebecca Evans MS, Minister for Finance and Local Government

First published:
21 September 2022
Last updated:

On 29 March 2022, I made a statement setting out the Welsh Government’s plans for the reform of non-domestic rating (NDR) during the current Senedd term. Today, I am taking the next step in this reform programme by launching a consultation on a range of proposals which will make essential and positive changes to NDR in Wales.

For more than 30 years, NDR has been an important part of the way we fund public services in Wales, with all revenue generated from NDR being distributed to local government to help pay for the vital local services we all use.

Our Programme for Government sets out the ambition for a fairer, greener and stronger Wales. These principles form the basis for any potential changes to the NDR system. We also have a clear commitment to make the case for clear and stable tax devolution and, where possible, to legislate to ensure decisions are taken and scrutinised in Wales.

The NDR tax-base is unique to Wales and any reforms to the system need to reflect this. Our immediate aim is to make changes that improve the overall system and meet emerging challenges that are specific to Wales, whilst maintaining the strengths and benefits of the existing local tax.

The Welsh Government has a number of levers available to change the way the NDR system operates in Wales, but the range and flexibility of these levers is still limited in practice through legislative and operational constraints. Our agenda for NDR reform seeks to address these limitations, providing the Welsh Government with opportunities to adapt and renew the system for Wales, designing components to reflect our tax-base.

The consultation covers a wide range of improvements to the NDR system in Wales. Our proposals include the following.

  • More frequent revaluation cycles, a change which many stakeholders have been calling for to ensure that rates valuations more accurately reflect up-to-date market conditions, along with additional measures necessary to support this.
  • Improving the flow of information between government and ratepayers, taking advantage of digital services.
  • Providing the Welsh Government with more flexible legislation to amend reliefs and exemptions in future years.
  • A review of reliefs and exemptions to ensure the arrangements align with our Programme for Government commitments and the available support is targeted in the most effective way.
  • Providing greater scope to vary the multiplier to help align annual increases with our economic development priorities.
  • Improving the administration of valuation functions and rating lists to streamline processes and reduce the burden on government and ratepayers.
  • Further measures to ensure we can continue tackling avoidance.

Some proposals would make specific improvements in the short to medium-term, while others relate to policy levers that would enable the Welsh Government to better adapt and customise NDR as conditions change. The consultation also outlines our continued work to explore the scope for more radical reform through alternative approaches to raising local taxes over the longer-term.

Many of the proposals that are the focus of this consultation would require primary legislation to deliver. In a statement on the legislative programme on 5 July 2022, the First Minister announced plans to bring forward a local government finance bill towards the end of 2023. Subject to the outcome of the consultation, the Bill could provide an opportunity to take forward some of our proposals for NDR.

I recognise that we are launching this consultation at a time when the cost-of-living crisis is already affecting businesses and their employees, through the rising prices of goods, services and energy costs. These challenges will remain at the forefront of our considerations, although the changes outlined in this document will need time to implement and take effect.

All the proposals in the consultation will require a coordinated and cooperative approach between the Welsh Government, the Valuation Office Agency, local government and other stakeholders. We have been working closely with our delivery partners to ensure our plans are practical and will continue to do so.

The consultation is open for a 12-week period and will close on 14 December 2022. I look forward to hearing the views of all stakeholders.

The consultation can be found at the following link: