District council unlawfully increased parking charges, auditor finds

An auditor has issued a report in the public interest after finding that a district council had unlawfully increased parking fees to support other services.

The report issued by Grant Thornton followed an objection to North Dorset District Council's 2012/13 accounts.

A local government elector – exercising their rights under the Audit Commission Act 1998 to object to the accounts – claimed that the local authority had increased its parking charges for inappropriate, and therefore potentially unlawful, reasons.

In setting car parking charges, the auditor noted, councils are required to comply with the Road Traffic Regulation Act 1984 (RTRA).

On 5 September 2011 North Dorset’s Cabinet considered a report on the result of a review of its off-street car parking service.

The minutes of the meeting stated that “the income from the car parks was used to pay the business rates for each car park and helped to support discretionary services such as Tobys and Treads”.

In approving the changes in car parking fees the committee minutes stated that the reason for its decision was “to assist with maintaining the council’s budget for the provision of key services”.

In its report Grant Thornton concluded that:

• The council had used its statutory powers to set off-street parking charges with the intention of raising revenue to support other key services in 2012/13. “It did not have regard to the fact that such charges may not be set with the intention of raising revenue.”
• In setting car park charges members had not been routinely made aware of the full costs (including the impact of capital expenditure) or other information which it may be relevant to take into consideration such as the level of any surplus achieved in previous years.

The auditor went on to recommend that:

1. The council ensures that in setting all fees and charges it does so in the context of the specific requirements of the relevant legislation.
2. In setting future budgets for off-street car parking the council should ensure that it does not set charges with the intention of raising revenue unless justified by statute.
3. In setting future charges members are provided with information on both the revenue and capital costs of providing the service and the level of surplus achieved in previous years.
4. The council considers keeping a separate account of its income and expenditure from off-street parking in order to aid decision making on future levels of charges.

John Gregory, Director at Grant Thornton, said: "In investigating an objection to increased parking charges in the 2012/13 accounts we concluded that the RTRA, which gives councils powers to charge for off-street parking, does not allow them to seek to deliberately make a surplus from these charges to fund other services. In our view the council's decision to increase fees in 2012/13 to support other services was therefore unlawful.

"We acknowledge that councils need to look at all possible ways of balancing the books in this time of austerity, but any income generation must be undertaken within the confines of the law.”

Gregory added: "North Dorset District Council has recognised its error in 2012/13 and will ensure that all future fees and charges are set in the context of the specific requirements of relevant legislation."

North Dorset’s Leader Cllr Deborah Croney said the authority accepted the auditor’s findings and recommendations and had “already addressed the issue”.