Charging around

Councils in many service areas charge fees, for example for swimming or parking services. There are a host of legal powers available to councils to charge for services. There are also a number of specific legal restrictions that prevent charging for certain services and it is important to remember that the charging power under the Local Government Act 2003 (England and Wales) only applies to ‘discretionary services’ not statutory services.

Discretionary services are those services that an authority has the power but not a duty to provide. An authority may charge where the person who receives the service has agreed to its provision. A council could not for example charge for its education services that it is required to provide.

The Government’s intention in bringing about a more certain power to charge reflects the need for local authorities to distinguish between doing something for a ‘commercial purpose’ which, if undertaken using the Local government Act 2003 must be done under a trading company, and doing something for a ‘civic purpose’ which will generally fall under a charging route.

Sections 93 and 94 of the Local Government Act 2003 provides a power for best value authorities to charge for discretionary services. This new power to charge does not apply where the power to provide the service in question already benefits from a charging power or is subject to an express prohibition from charging.

Best value authorities are required to have regard to any guidance that may be issued by the Secretary of State. See APSE briefings in the right side column which further explore these issues.

The essential difference between charging and trading is that charging for discretionary services is limited to cost recovery whereas trading (through a company) permits the making of a profit. There are 4 main differences in the powers:

Differences between Charging and Trading

• charging relates only to discretionary services, whereas the power to trade is for all services
• all best value authorities can use the power to charge
• charging is limited to the recovery of the cost of providing the service whereas trading can be at a profit
• the power to trade is only exercisable through a company

Charging in Wales

Charging provisions in Wales are a mirror image to those that apply within English Authorities. As in England charging powers are not subject to any form of performance categorisation as the power is conferred, as in England, directly to the local authority – it is not like trading whereby the power is conferred by the Welsh Assembly Government.

Charging in Scotland

Local authorities can provide services for other public bodies and charge them for this without restriction. They can charge for discretionary services such as leisure and parking. Local authorities can trade with community partners and the private sector up to certain thresholds although these thresholds remain to be set.

Charging is effectively rolled into provisions contained with the Trading provisions within Scotland. The Best Value Taskforce Guidance provides a further route to information which you can download by clicking here.

APSE has been working with Scottish local government and with the Scottish Parliament to revise guidance to enable a more flexible framework within Scotland

Charging in Northern Ireland

As there are no similar provisions to those contained in the Local Government Act 2003 applying within Northern Ireland authorities in Northern Ireland must rely upon specific powers to charge in specific areas including the Local Authorities (Goods and Services) Act 1970