One in four town halls now get more income from charges such as parking than they do from council tax, the spending watchdog says today. The rise in charging comes as local authorities try to avoid service cuts.

A report from the Audit Commission shows that charges overall have risen by 31 per cent in five years, with parking fees and congestion charges alone rising by 75 per cent from £1 billion in 2001-02 to £1.75 billion in 2005-06. Parking is one area where councils can charge as much as the market allows.

Councils gain £11 billion a year in fees compared with £22 billion in tax. Individuals pay an average £210 a year to the town hall on top of council tax.

Many councils decide against charging for services, fearing that it will be unpopular, but the report shows that this may not be the case.

John Healey, the Local Government Minister, said: “Local authorities should take action on the opportunities identified in the report, which makes clear that the majority of people think the charges they pay for services offer good value for money.

“Authorities must make more of charging — alongside other measures we have made available to them — to improve their area and deliver costeffective services.”

The commission’s report shows that the only area where charges have fallen is in social services. Although these draw the highest income — £2.3 billion — they have fallen slightly from 2001. Parking fees have shown the highest growth. Charges for school meals, transport and after-school facilities raise £1.75 billion and payments for commercial waste and pest control raise nearly £700 million.

Michael O’Higgins, the chairman of the Audit Commission, said that little attention was paid to charges. Some districts gain as little as 2 per cent of their income from fees and others gain 67 per cent, he said.

“Councils should look at what they charge and who pays so they can make better use of charging to improve outcomes for local people,” Mr O’Higgins said.

Sir Simon Milton, the chairman of the Local Government Association, said that councils often had little choice but to raise fees.

“The impact of a flawed council tax system, combined with increasing pressures for services, means that local councils have to make tough choices between spending cuts, council tax rises and charging fees,” he said.

Eric Pickles, the Shadow Local Government Secretary, said: “We already knew that council tax bills have doubled under Gordon Brown. Now new burdens imposed from above have forced stealth charges to double as well.”