Building slump hits council coffers

The massive slump in the construction industry has blown a black hole in the coffers of Rochdale council.

Information uncovered by the Conservatives show councils across the country will find themselves facing deficits as the recession continues to bite. Fewer people are buying homes and fewer new sites and developments are being started — meaning councils are losing out on vital cash.

According to information given to the Tories under the Freedom of Information, Oldham Council expects to see a shortfall in land charge fees.

Shadow Housing Minister Grant Shapps said: “Local authorities up and down the country are facing up to the hidden costs of Gordon Brown’s boom and bust. This black hole in local government finance is extremely worrying as it means potentially higher council taxes and increased fees.”

Land charges cover searches that show the planning history of a site, prospective developments near-by and any planning policies that cover the area.

Councils also charge fees for processing planning applications for anything from home extensions to new housing developments.

Nationally the total deficit predicted by councils amounted to £94m.