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Use of car parking fees to support other services 'unlawful'

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A decision by a district council to increase car parking fees to help fund other services following budget cuts has been deemed “unlawful” by auditors.

North Dorset DC’s decision to increase parking charges in 2012-13 contravened the Road Traffic Regulation Act 1984 (RTRA), according to a ‘report in the public interest’ by Grant Thornton.

The investigation followed an objection by a resident in August 2013 who questioned whether it was right to set car park charges at a level to support other key services.

Grant Thornton’s report acknowledged that budgeting for a surplus from car parking charges was “not necessarily always unlawful” and the auditors said it can be “impossible” to calculate the exact costs of providing parking services. It added: “It may also be prudent to budget for a surplus to allow for unforeseen expenses, shortfalls in other years, and payment of capital charges/debts.”

However, when North Dorset’s cabinet considered a report on the result of a review of its off-street car parking service on 5 September, 2011, it approved an increase to car parking fees “to assist with maintaining the council’s budget for the provision of key services”, according to minutes from the meeting.

Those minutes also said the council had made the decision to increase charges “due to the increasingly difficult financial position the council was being put under” as a result of budget cuts from central government.

Grant Thornton’s report said North Dorset operated 22 off-street car parks, 11 of which it raised charges for. In 2012-13 the council gained a net income of £110,000 from those car parks, the report said.

John Gregory, director at Grant Thornton UK, said the act did not allow councils to “deliberately make a surplus” from car parking charges to fund other services. Mr Gregory said: “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.”

The report also recommended North Dorset should keep a separate account of its income and expenditure from off-street parking in order to help councillors decide on future charges.

North Dorset DC had not responded to a request for comment at the time of publication, but Mr Gregory said the council had “recognised its error”.

The publication of reports in the public interest was previously the responsibility of the Audit Commission. Town and parish councils aside, there have only been three other such reports since 2012. They related to governance issues at Newham LBC, Corby BC’s management of capital regeneration projects, and Wirral MBC’s procurement of highway and engineering services.

Grant Thornton said reports in the public interest have to be consided by the council in question in a public meeting, normally within a month of issue.

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