Over a quarter of English councils generate more income from charging for services such as parking, school meals and swimming than they raise through council tax, according to an Audit Commission report published today. Across England, councils are now collecting a total of £10.8 billion from fees and charges, the equivalent of £210 for every person in England.
Yet the Audit Commission's report Positively Charged, released today reveals that the majority of councils remain unaware of how these charges contribute to their overall expenditure and have little understanding of how their approach to charging compares with other councils. The findings also show that they are failing to demonstrate clearly to the public what additional benefits are delivered by new or increased charges. Therefore the report calls for councils to review their approach to charging and to have a more transparent debate both internally and with local people about the issues.
As well as raising revenue, councils can use charging to encourage people to be healthy and green and improve quality of life. Examples include promoting fitness by reducing charges at sports centres for disadvantaged groups, tackling congestion by introducing road charging or subsidising park and ride bus services. However at present, the report reveals, nearly half of all councils have no agreed charging strategy and many are not giving due consideration to how their charges are affecting people who use, or could use, their services.
To coincide with the release of the report, the Audit Commission commissioned an Ipsos MORI poll to look at people's attitudes to charging and council tax. It revealed that the majority of people think the charges they pay offer good value for money. The public appears more receptive to charges than councils suppose, especially if people can choose whether to use a service or not.
Michael O'Higgins, Chairman of the Audit Commission said:
'Councils raise half as much from charging for services as they do from council tax, yet the issue attracts much less attention than it deserves. '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. '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.'
Positively Charged recommends that central government reviews the limitations it imposes on local authorities' charging powers to ensure they are justified, and to ensure that charges set nationally remain appropriate in the light of councils' costs.
From 2009 the Audit Commission will take account of how well individual councils are using their powers to charge as part of its annual use of resources assessments. These assessments are carried out at all councils as part of the external audit by appointed auditors.
NOTES TO EDITORS
1. In 2006/07 councils in England raised £10.8 billion from sales, fees and charges, according to data published by Communities and Local Government in Local Government Finance Statistics: Revenue Outturn Service Expenditure Summary 2006/07. This represented about 8 per cent of total council income.
2. In the same year, collectively, local authorities raised £22.4 billion through council tax, according to the Office of the Deputy Prime Minister, Statistical Release: Levels of council tax set by local authorities in England 2006/07, 2006.
3. Positively Charged presents the findings from research undertaken in 2007 into councils' use of their powers to charge for services. The findings are based on an analysis of central government data on local authority income from fees and charges, interviews with councillors and officers at 13 councils, a survey of local council finance directors and research with the general public undertaken for the Commission by Ipsos MORI.
4. The report includes a number of positive examples of councils using charging strategically to achieve their objectives. Ipswich Borough Council reviewed their pricing of sports services to improve access for disadvantaged groups and avoid subsidising commercial hirers such as professional football clubs. East Hampshire District Council removed car parking charges in the towns of Alton and Petersfield on a number of days in December to incentivise people to support local traders by doing their Christmas shopping locally.