Increase in Vehicle Release Fees.

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A decision made (10/01/2007) regarding: Increase in Vehicle Release Fees.

Subject:	Increase in Vehicle Release Fees
Decision Reference:	MD-H-2006-0084	Exempt clause(s):
Type of Report: (oral or written)	Written	Person Giving Report (if oral):		N/A
Telephone or e-mail Meeting?	N/A	Report File ref:		L:\estates\estates management\ministerial decisions\wr-increase in release fees 2007
Written Report – Title	Increase in Vehicle Release Fees	Written report - author		Carl B Mavity – Director of Estate Services
Decision(s): The Minister agreed the increase in vehicle release fees
Reason(s) for decision: To comply with Financial Direction 4.1
Resource implications Financial: £26,000 p.a. increase in revenue Manpower: NIL Property: NIL ICT: NIL Law Drafting: NIL
Action required: Copy of Decision to be sent to Treasury and Resources Minister for approval
Signature: (Minister/ Assistant Minister)			Date of Decision: 10 January 2007

Increase in Vehicle Release Fees.

Date of Report: 27th December 2006

REPORT FOR MINISTER

INCREASE IN VEHICLE RELEASE FEES

INTRODUCTION

To consider an increase in the vehicle release fee, which is currently £65.00.

BACKGROUND

The Department operates a parking permit system and, in some cases, a key controlled barrier mechanism on the majority of its estates. These measures are necessary to deter illegal parking and thus ensure that rent paying tenants are able to park with the minimum of inconvenience near their homes. The Department also issues permits to various social services personnel in order to assist with the care they provide to their patients. Visitor, contractor and paid parking permits are also provided, the latter providing significant income for the Department. Despite the permits and the barrier systems, illegal parking has been a major problem for the Department and particularly so in the town area. In 2005, some 402 vehicles were either removed from the estates or clamped in situ. In 2006, higher profile policing had the effect of deterring illegal parking and the figure dropped to 264.

The Department has an annual contract with G4 Securicor to provide a car park policing service. This service is very much a based on the principal of deterring illegal parking and is successful in so much as the number of vehicles being either towed or clamped has dropped from a high of 500 in 2003. However, this success comes at a price, it being a fact that less vehicles being caught reduces the income from release fees which has in the past covered to a large degree the cost of providing the service. To provide a greater deterrent and catch illegal parkers requires regular patrolling and these patrols do come at a cost.

Income from release fees in 2005 was £35,716. By 2006 year end we predict that this will be no more than £17,000. The cost of providing the policing service including the rental of the car compound (£5,000 p.a.) is forecast to amount to £43,000 in 2006.

The principle of Financial Direction 4.1 promotes the adoption of the ‘User Pays’ principle where there is a need to “signal the relative undesirability of a given activity”. For User Pays to be introduced for release fees, it would be necessary for each vehicle clamped or towed to be charged a release fee of £135. This would clearly be an increase of more than the 2.5% cap desired by the States in its Anti Inflation Strategy, (p125/2000) which stated that increases in States fees and charges should be limited to 2.5% per annum with compelling cases to be subject to the prior approval of the Minister for Treasury and Resources (previously the Finance and Economics Committee). However, that same strategy goes on to say, “It is recognised that there may be legitimate and compelling instances where an increase above 2.5 percent is desirable. These may be for example, for ‘user pays’ reasons ……..… or in pursuit of health or environmental objectives, where the purpose of raising a charge may be to signal the relative undesirability of a given activity.”

It is a fact that ceasing the policing of the car parks is only an option if the Department is willing to accept that within a very short period of time, illegal parking will be at its previously recorded levels with the result that rent paying tenants, will be unable to park near to their homes, if at all.

It is also a fact that without illegal parkers, the Department would not need to incur this expenditure and it is suggested that those who seem intent on flouting the rules should be required to pay for the service and it is further suggested that that repeat offenders, of which there are many, should receive a heavier sanction.

CONCLUSION

If the improvement in deterring illegal parking is to be sustained and built upon, the vehicle release fee should be increased to a realistic level which provides for the funding of the policing service. This supports the ‘User Pays’ principals and in the view of the Department cannot be seen as inflationary due to the fact that only very small numbers of people will be affected and then only if they choose to illegally park.

Although it is not felt that the release fee is the sort of charge which the States sought to control in its Anti-Inflation Strategy in 2000, it is still seen as prudent to seek the approval of the Treasury and Resources Minister for the increases.

RECOMMENDATION

That the Minister;

1. approves increase to the release fees as follows:-

a minimum of £120.00 for a first offence, and

for repeat offenders a minimum of £150.00

2. agrees to seek the approval of the Treasury and Resources Minister for the increases

C B MAVITY

DIRECTOR OF ESTATE SERVICES