As if councils didn’t already have enough to contend with, they are now facing a barrage of criticism over charging.
Previously, the Government indicated that local authorities should further explore opportunities to generate income so long as this was not exploiting the public. Faced with unprecedented cuts in resources, many authorities have done exactly that. Indeed, only a couple of months ago communities and local government secretary Eric Pickles cited APSE’s examples of local authority MOT stations providing a service to the public and undertaking tree inspections for private businesses for insurance purposes on national radio and flagged up a link to our web pages on the topic.
Yet ministers are now accusing councils of treating residents as ‘cash cows’ in the media and linking charges for services with so-called ‘fat cat’ chief executives’ salaries (The MJ, 13/1/11 p.3).
While no-one is suggesting for a minute that councils should ruthlessly introduce fees that could see prices hiked for service users, there are certainly activities that could be provided on a charged-for basis to ensure their survival and generate surpluses to invest in others. Examples include local authorities hiring out expensive plant and equipment to neighbouring authorities to help to offset their capital outlay. New regulations also allow them to charge prisons and hospitals to collect their trade waste.
This is about underpinning rather than squeezing the local economy and councils must ensure that local businesses are not affected. In fact, EU competition law requires them to be mindful of the impact on the marketplace.
In APSE’s view, focusing on efficiency, income generation and innovation is the only hope for surviving the cuts. Trading and charging can be a way of achieving all three. It must be done in a carefully considered, strategic way however. An Audit Commission report back in 2008, showed local authorities in England and Wales were generating £11b in charges, my view is this is likely to increase in future years. It also recommended that every council should have a clear corporate charging strategy in place.
Charging and trading must be properly thought through. We have developed a seven stage approach; identify legal powers; integrate it into your community strategy; establish a need; develop a business plan; undertake market analysis; carry out risk assessment; and ensure it links to well-being powers.
Public opinion is an important factor to consider. And ministerial criticism, after previously supporting charging, does not help local businesses and residents understand what they are paying for and why. Or – more to the point – that with local government in such dire straights, the alternative might be to lose services they value altogether.