Dark clouds are gathering on the horizon for the Government on their system of council tax as one by one authorities step forward to criticise the current system and call for reform.

This week, it is the turn of the Local Government Association, (LGA) - the national voice for local authorities in England and Wales. Their report, 'The Balance of Funding - A combination option', which is out for consultation with all local authorities, sets out the 'unsustainability' and 'unfairness' of the Government's current system of council tax.

The LGA hope to get all party support from local authorities for submission to Government, as part of their Balance of Funding Review - a review of how local authorities are funded.

Devon's County Councillors welcomed the LGA report yesterday, but fear that it might not be enough to convince Government.

The Council will be considering its formal response to the LGA consultation at its Executive meeting in early February, but its first reaction yesterday welcomed the LGA consultation, whilst being more reticent about the LGA's ideas for reform.

In the report, the LGA identify key problems with the current system, saying that people do not see a clear connection between local taxes and decisions to spend, that it is unfair to local taxpayers and to local authorities, and that it is not buoyant enough -that increases in tax base do not automatically lead to more council tax income.

The LGA says that their proposals offer a solution to the problems of rising council tax bills; the confusion as to who is to blame, and the local dependence on central government funding decisions.

They are recommending the replacement of council tax with a combination of a fairer property tax, the relocalisation of the business rate and the transfer of a proportion of national income tax to fund local government, either as an assigned revenue or as a local income tax.

That there needs to be reform is in no doubt in Devon, as pensioners, the County Council and other authorities continue to campaign vigorously for reform.

The campaign is gathering momentum too with the recent Audit Commission report that highlighted the inadequacies of the current system, echoing much of what Devon has been saying for months.

And this week, the Government's Department for Environment, Food and Rural Affairs, has published a report that shows areas of Devon accounting for some of the most disadvantaged rural districts in the country. A report that Rural Affairs Minister Alun Michael said would help the department ensure that funding is targeted at areas which need it most.

At the Council meeting, the Leaders of the Council's four political parties welcomed the LGA's consultation and the opportunity for debate, but at this early stage were cautious about the LGA's proposals.

Councillor Brian Greenslade, Leader of the Council and Leader of the Liberal Democrat Group said: 'I welcome the opportunity to debate this very important subject. We recognise that the current system of council tax is no longer sustainable as a method of raising revenue and we want to see a system that recognises people's ability to pay.'

According to the LGA, a possible effect of their proposals would be a reverse in how much money is funded from central Government and how much is raised in council tax locally.

Nationally the average split for local authority funding is 74 per cent from central Government with 26 per cent raised through council tax. With the LGA proposals, 28 per cent funding would come from central Government and 72 per cent raised through council tax.

Cllr Greenslade said, 'One of the key issues of this report is that of 'democracy' and the proportion of funding supported by central Government grants. (The LGA proposals) would put a lot more power into the hands of local authorities and strengthen local accountability.'

The Council's Executive will consider the LGA consultation at its meeting in early February before giving its formal response.

The LGA consultation will culminate with their report to Local Government Minister Nick Raynesford after the consultation deadline of 13 February, as part of the Government's Balance of Funding review.

The debate at Full Council can be viewed on Devon County Council's website, www.devon.gov.uk, following links to webcasts of previous meetings.

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