Sir Michael Lyons has published his highly anticipated report on council tax, calling for two new price bands at either end of the housing spectrum.

Those entitled to tax benefits should also receive them automatically, rather than having to claim them, the Place-Shaping: A Shared Vision for the Future of Local Government review recommends.

He has urged ministers to consider allocating a fixed proportion of council tax income to local governments, to introduce a tourist tax in certain regions and to cap levies on empty commercial properties.

Before any changes can come into effect, however, council tax price bands will have to be revaluated, a process that will take several years.

Responding to the recommendations, local government minister Phil Woolas confirmed that Communities and Local Government would exempt charities from a business rate charge on unused premises, but suggested that a revaluation would not occur during the lifetime of the current parliament.

"The evidence in the inquiry shows that a revaluation would not have a significant impact on the fairness of council tax relative to income," he explained.

"Sir Michael has said that there is no magic bullet or simple solution to local government funding. We agree. We also support his conclusions that the council tax is not broken."

Mr Woolas also noted that, at 96.8 per cent, the council tax collection rate was at its highest ever.

The Lyons report was commissioned by the prime minister and Gordon Brown in 2004.