Councils relying more on extra chargesWatchdog says councils take billions in fees

22 January 2008

Four children eating in a kitchen

Councils are increasingly reliant on income from charging for services such as parking, school meals and swimming pools, the local government watchdog said today.

The Audit Commission said that councils in England were collecting £10.8 billion a year in fees and charges. A quarter of local authorities now raised more from charges than they did from council tax.

However, the commission said that the majority of councils did not properly understand how these charges contributed to their overall expenditure and failed to demonstrate to the public the benefits they derived from them.

Council tax

'The public is more willing to pay charges if they can see what they can get for their money. They need to know why the council has decided to charge for some services, but subsidise others,' said Audit Commission chairman Michael O'Higgins.

'With pressures on public finances and rising expectations, councils should look at what they charge and who pays so they can make better use of charging to improve outcomes for local people.'

Chairman of the Local Government Association Sir Simon Milton said: 'The impact of a flawed council tax system, combined with increasing pressures for services, means that local councils have to make tough choices between spending cuts, council tax rises and charging fees.

'In certain parts of the country the money councils will receive next year from central government will make it the worst settlement for a decade.'

'Locals suffer'

He continued: 'England has Europe's most centralised system of funding and it is local people that are suffering because of it.

'The average taxpayer in England pays £1,000 a year in tax that is subject to local control, and yet pays nearly £6,000 a year in tax that is entirely under the control of central government. Unlike national quangos, if people do not like the charges that are levied then they can ultimately vote the council out.

'That different councils have different charging policies should come as no surprise. Every area has its own unique issues and councils will rightly adopt charging policies to local circumstances.'

'Trying to set arbitrary national charging policies that don't reflect local circumstances work against the interests of local people...under the current system councils are doing the best they can to put people first with the tools they've got.'

Responsibility

A Department for Communities and Local Government spokesman said: 'It is important that local government accepts responsibility and shows leadership in tackling the difficult decisions we all face, rejecting the easy option of simply passing the buck on to others.

'Contrary to what they say, the Government has supported councils with a 45% real terms increase in funding between 1997 and 2011, including an extra £920 million in core grant next year.

'Sir Michael Lyons' independent report also found there is a strong case for retaining a local property tax.'

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