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Almost three-quarters of councils are planning to hike up service fees to fill the financial void created by Whitehall grant cuts – with local transport, adult education and day care services likely to be hardest hit. Many of the fee increases could be above inflation, according to a detailed survey of council chief executives and finance directors, conducted by pollster Ipsos MORI on behalf of consultants BDO, and obtained by The MJ. While that could put some authorities on collision course with residents and local service-users facing financial challenges of their own, wider BDO research suggests councils could find support for new or increased charges – providing they convince voters key services are protected as a result of fees. The candid poll of 163 senior council officers found that 30% of respondents believed income from services would ‘increase a great deal' over the next three years. A further 42% said they expected income from fees to ‘increase a little'. Just 3% of respondents said they expected their council's fees income to decrease over the course of the Spending Review period. The poll was conducted before chancellor, George Osborne, announced his Comprehensive Spending Review (CSR) cuts of 27% to council budgets by 2015. But it has been made public shortly before ministers could sketch plans to help councils raise more cash locally through the imminent Localism Bill, and the potential retention of more local business rates. Anna Turley, deputy director of the New Local Government Network, told The MJ: ‘Now we have seen the extent of the challenge local government faces from the Spending Review, it is clear that local government will have to explore every option for making savings and raising income. ‘The current funding system means councils have limited control over the revenue they raise, so it is, therefore, no surprise that they are exploring ways of generating new revenue from charging and trading.' A senior manager who participated in the research added: ‘The results reflect the tough choices facing senior managers coping with significant budget reductions. ‘There will be a temptation to increase some local fees at above-inflation rates to protect frontline services. Some new charges might not be popular – but they may be necessary.' Researchers found 68% of senior council officials expected existing local transport fees to increase at above-inflation rates over the next three years, while 67% expected large increases in existing fees for adult education services. More than half of those polled also predicted above-inflation increases in current fees for day care, planning, residential and waste services. Other areas where local fees could increase significantly included meals on wheels, early years and nursery services. Many senior executives were also expecting their authorities to introduce a range of new fees where they did not currently exist. One-third (33%) of managers believed waste fees would become the norm in their area within three years, while ‘doorstep recycling' fees and congestion charges could also feature across more localities as Whitehall's spending cuts took hold. Before the CSR, 28% of senior staff warned that increased fees would be needed to cover the fall-out from Britain's economic dip, while 51% described the primary ‘driving force' for fee increases simply as ‘revenue raising'. A total of 17% of senior managers believed increased local tariffs would increasingly be used to influence residents' behaviour, for example, by encouraging them to recycle. Where managers believed barriers to increased charges existed, 63% cited ‘resistance from residents or service-users' as the main reason. A separate study of public opinion commissioned by BDO, and undertaken by YouGov, indicated that maintaining public support for charges would be crucial if local government was to generate more cash for crucial services. It suggested some authorities could be put off introducing less controversial charges because the public was wary of past rows over controversial ‘bin taxes', for example. But a BDO assessment of YouGov's research suggested the public would tolerate some new charges, if the money raised protected services. Andy Mahon, BDO partner, warned: ‘Our research suggests that the key to winning support for new or increased charges is showing how other services will be protected as a result. ‘Unless councils achieve this, they face a potential backlash.' Communities minister Bob Neill urged councils not to hike up fees, and suggested alternative ways to ensure financial stability. He said: 'There are plenty of opportunities for councils to balance their books without pushing up charges and turning local residents into cash cows. 'From Wandsworth to Worcester and Wigan we've seen councils using bit of innovation and creative thinking councils to use the skills and resources already at their disposal. 'Others like Westminster, Kensington & Chelsea and Hammersmith & Fulham are looking at sharing their services which is exactly the sort of innovation that will help councils to protect hard-working families and the most vulnerable. By sharing back-office services, they'll be able to protect the front line - and even improve the choice and services that's on offer to local residents.'

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WHITEHALL

Charges set to rocket as spending cuts bite

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