Audit Scotland has published a report on local government charges for services. If the subject sounds familiar, it should. UNISON Scotland published its own work on the subject in May of this year, showing how charges appeared to be plugging the gap caused by the Council Tax freeze.
This report confirms that the income that councils raise from charges has risen over the last decade and is estimated at some £1.3 billion, or approximately 7% of a council’s overall expenditure. That’s equivalent to over 50% of the amount they raise through council tax. And this doesn’t include rents or fines.
The proportion of income from charges rose from 5.6% in 2003/04 to 7.4% in 2013. The implementation of the council tax freeze in 2007/08 altered the relative proportion of councils’ income from charges as the chart below demonstrates.
Councils are facing continuing financial pressures through increasing costs and demands on services. The Scottish Government funding settlement to local authorities for 2013/14 is £9.9 billion, a decrease of about 2.25% in real terms. As a consequence there is an increasing need for councils to examine potential sources of income, including charging more for their services.
Councils do not have complete freedom to charge for services. Many council services are provided with no direct charge to the service user like children’s education and street cleaning. Councils do however have discretion to charge for other services such as planning consents and building control certificates, the use of sports facilities, licensing and burials and cremations. Councils may also offer price concessions to certain service users based on, for example, their age, employment or financial circumstances.
Councils apply charges to a wide range of services, but the biggest service area is social work, followed by roads and transport (see below)
As locally elected bodies it can be expected that councils' charging policies will differ. The report recommends that councils should be transparent about their charges and set them in the context of wider service objectives. Councils should be aware of any unexplained inconsistencies and be able to explain why their charging policy differs from other authorities, including the use of benchmarking.
As we said in May, charges are cutting deep into people’s pocket and are often regressive. Freezing the Council Tax will not reduce poverty or inequality. Councils need resources to continue providing vital services rather than impose damaging cuts or punitive charges.