Agenda item

Report CFM415 of Business Manager Venue and Facilities

(Enclosure)

The Corporate Finance Manager presented report CFM415 on the review of discretionary fees and charges in accordance with the PDG work plan for 2017/18.

On 8 November 2016 the Resources PDG had considered a new methodology for setting discretionary fees and charges from 2018/19.  This report set out the rationale and methodology for establishing fee levels going forward.

The main focus would be around discretionary charges where there was no statutory fee setting process already established.  The Council provided a wide range of services for which a charge can be made – either statutory (set by the Government) or discretionary (set by the Council). This review would be undertaken through a planned programme of work.

By definition, local authorities could make a decision on setting the level of charges or even whether charges should apply for discretionary services.   Accordingly, when setting these fees and charges, the Council’s approach should be clear and in line with the principle established in the recently updated Medium Term Financial Strategy (MTFS):

“Fees and charges should be reviewed annually and changes should have regard to the priority outcomes.”

At the November meeting, the Resources PDG recommended approach to reviewing charges going forward was fundamentally based on aligning the service to agreed outcomes.  The proposed methodology was to consider the context in which the service was provided and the outcomes delivered and how charges contributed towards the outcomes being achieved.  Consideration would also be required on whether the charges should be based on the principle of user pays or whether a subsidy level should be considered and what that level should be in financial terms.

As the Council was becoming more commercially focussed and operating in a more business-like way it would be necessary to consider charges in a way that would support this ethos by stimulating demand and encouraging participation. It would also need to consider competition, market and customer segmentation as well as any limitations of contributions to fixed costs.  Fees and charges would also be used strategically to encourage behavioural changes to support delivery of the corporate priorities.

Suggested criteria for undertaking the review was provided:

·         The relative contribution towards the priorities of the council

·         The basis on which fees should be set – consideration of whether the fees should be set at a cost recovery level or a subsidy level (i.e. a proportion of the cost to be recovered from the users of the service and the remainder of the unrecovered cost to be met by the tax payer).

·            Benchmarking information, where possible, of similar charges for comparable authorities/service providers

·            Demonstrable link between the charge and the cost of providing the service

The report was presented to provide an overview of the remit and criteria by which the PDG would begin the review of discretionary charges upon rising of this meeting.

A Member requested that Crematorium and burial charges be considered at a future meeting of the working group.

Action Note:

That the PDG notes the remit and criteria for reviewing the discretionary charges.