New coins leave councils £5.5m out of pocket

7 November 2011

Concessionary bus travel and efforts to fill potholes could be further stretched with councils having to fork out millions of pounds to upgrade parking machines to accept new coins.

The Treasury is planning to change how it makes 5ps and 10ps next year by using a cheaper metal to save on minting costs.

However, their new dimensions aren't recognised by many parking machines meaning town halls, already managing huge budget cuts, are having to upgrade them using funds which could be spent on road maintenance or subsidising community transport schemes such as concessionary bus travel for the elderly, shopmobility services and park and rides.

It's estimated the cost to councils across England and Wales will be £5.5 million.

The Local Government Association is calling on the Treasury, which predicts these new coins will save it £176 million, to foot the upgrade bill so councils can focus their money on services which millions of people rely every day.

Government is also considering changing the make-up of £1 coins to save on minting costs. Councils need urgent clarification on this to ensure they don't upgrade existing machines or invest in new ones for the thicker 5p and 10p coins only to be told in a year's time they won't accept the new £1.

Cllr Peter Box, Chairman of the LGA's Economy and Transport Board, said:

“Councils across the country are striving to continue providing vital services while managing deep funding cuts from Government. The cost and effort of updating parking machines is an extra burden they could do without.

“This is cash which could be spent on filling potholes or concessionary bus travel for the elderly. There are also other coin-operated machines which councils use everyday such as in libraries. These too will need to be updated in the majority of cases.

“Motorists may also be inconvenienced in areas where authorities cannot afford the expensive upgrades as their parking machines will no longer be able accept 5 and 10p coins.

“It's understandable why the Treasury is changing these coins, but with such huge savings predicted surely it should pick up the tab for machine upgrades rather than force councils to divert money away from people who really need it. And councils urgently need a decision on the new £1 or they could end up spending thousands of pounds on machines now only to be told in a year's time they have to do it all over again.”

Many councils, particularly in rural areas, have to subsidise parking services as the cost is not covered by charges. Authorities in towns and cities sometimes have a surplus of revenue which has to be spent on transport initiatives which benefit the public. These include concessionary bus travel for the elderly, shopmobility services, green travel schemes and large infrastructure projects, exactly the sort of services which are under pressure following Government funding cuts.

Not all councils will be affected, with many larger authorities now operating a cashless system where motorists can pay for parking online or via mobile phone. Others are expected to change their tariffs so 5ps and 10ps won't be needed.

Councils left out of pocket include:

Sheffield City - £81,000

Calderdale - £48,000 on 215 machines

Kirklees - £40,000

London Borough of Redbridge - £35,000

Harrogate Borough - £35,000

West Sussex County - £25,000/£30,000

City of York - £24,198

Wakefield - £22,720 on 92 machines

Leicester City - £18,000 on 200 machines

Watford Borough - £13,500 on 56 machines

Sedgmoor District - £8,640

Pembrokeshire County - £6,500 for 60 machines

Hambleton District - £5,760 on 30 machines

North Norfolk District - £4,224 on 22 machines

Colchester Borough - £3,323 on 37 machines

Richmondshire District - £2,800 on 14 machines

Notes

From January 2012, the composition of 5p and 10p coins will change from cupro-nickel alloy to nickel-plated steel. They will retain the same weight and diameter, but be 11 per cent thicker. The Treasury is considering changing the £1 coin, but is not planning to decide until at least next year.

The majority of parking machines cost between £70 to £220 to upgrade to take the new 5p and 10p. Councils could install new validators on existing machines which would also accept the anticipated £1 coin at a cost of about £300, or buy altogether new machines at £450 to £650.

The average cost of filling pothole is about £80.

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