Council revenues surge raises bankruptcy concerns | Politics | News

December 29, 2023
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Jeremy Hunt

Council revenues surge raises mismanagement concerns amid bankruptcy fears (Image: Getty)

Council revenues have rocketed in the past decade, new data shows.

Takings from airports, harbours, toll facilities, have more than tripled since 2011.

Revenue generated from waste collection, recycling, on-street parking and births and deaths has also surged.

The findings add further weight to the fact that mismanagement, rather than a lack of funding, is the reason why local authorities across England are going bankrupt.

Councils raise revenue in a number of ways including tax, grants and charges on essential services.

But sales, fees and charges for some of these services have increased rapidly.

Figures unearthed by the TaxPayers alliance reveal that councils are now bringing in three times more in revenues from airports, harbours and toll facilities.

This is an increase of 207.6 per cent as a cost per house since 2011.

Waste collection revenues for local authorities have risen 72.4 per cent in the same period, the TPA said.

Charges for major life events like deaths and births have also risen by more than a third as a cost per household.

Recycling revenues have shot up by 50.4 per cent since 2011, an increase of 36.2 per cent per house, while on-street parking is raking in 26.2 per cent more in revenue.

The TPA report – Increases in Local Authorities Sales, Fees and Charges – states: “Over time, taxpayers have seen huge increases in sales, fees and charges for some services but little evidence of increasing service quality in these areas.”

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“Despite rising revenues from many charges, residents across the country have complained about services such as rubbish collection, street lighting and parking.”

It comes after Lord Morse, chair of the Office for Local Government (Oflog), said that all town halls in special measures were failing because of poor governance rather than budgetary shortfalls.

Last month Nottingham became the sixth council in recent years to declare itself effectively bankrupt, with fears that more are teetering on the brink.

It has raised fears that millions of households could face double-digit council tax rate increases.

Soaring inflation and growing demands for services are among the factors blamed for the pressures, but critics point out that some town halls have heavily leveraged their finances to make investments they hoped would bring in more revenues.

As interest rates have increased that has left them struggling to service debts.

Lord Morse, a former head of the National Audit Office, said: “All of the failures that we’ve seen so far, all of the authorities that are in special measures, are not primarily attributable to a shortage of money; they’re to do with failures in management or failures in governance.”

“I really can say that quite definitely.”

Michael Gove admitted English councils face financial challenges as he unveiled an above-inflation £64 billion funding boost earlier this month.

Nottingham City Council became the latest authority to issue a Section 114 notice, effectively declaring bankruptcy, last month.

It blamed its financial problems on government funding and rising demand for services.

Labour-run Birmingham City Council issued a Section 114 notice in September, as it faced an estimated £760 million liability from an equal pay claim.

Woking council was put into special measures in the summer after it became the UK’s “most indebted local authority” with liabilities of £1.2 billion against annual core funding of just £16 million.

The debt was largely the result of a failed investment strategy that saw the council borrow hundreds of millions of pounds for regeneration projects that then had to be written down.



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