Councils must look at ways to maximise the income they generate themselves in order to raise funds to protect frontline services from spending cuts
Income from fees and charges is now a key budget component in any local authority in this era of fiscal austerity. Council staff, equipment and facilities are already used to offer a wide variety of services to private businesses and the general public.
Such services range from security patrols and cleaning graffiti to performing MOTs, servicing and maintenance for motor vehicles. But current services on offer only use a fraction of the potential for income generation.
Councils could raise money from such diverse activities as the provision of advertising space, cash collecting services for other agencies, private sector meals on wheels and the establishment of pet cemeteries.
Different governments have meant different charging taboos. Introducing domestic waste charges to encourage recycling is now out. Recovering the full cost of determining planning applications is in, however.
Sometimes fees and charges are just hiked up by a standard percentage year on year. In a few authorities, every single fee and charge is pored over in fantastic detail.
Nevertheless, management and finance time to carry out fees and charges reviews is in short supply. It makes sense thus to concentrate on the areas where there is scope to generate new resources. Using the latest guidance on offer and getting a plan in place for this is essential.
For many services, councils can recover at most the full cost of the service, taking several years together. But, how wide can the boundaries of the ‘service’ be set? And, are we sure, we are reliably and fairly calculating the service cost anyway?
So for example, how willing and smart are social services authorities at assessing and collecting client contributions, the biggest source of local authority fees and charges income?
The position is not helped by the massive range of legislation, regulations on what can be charged for, what cannot, and how the charges are calculated. To help councils strike out on their own and subsidise important services for the most vulnerable through their own income, this is an area where the government really needs to turn its attention.
Paul Cook is CIPFA’s advisor on income generation and the author of the institute’s A Practical Guide for Local Authorities on Income Generation
