A Nottinghamshire council must pay back £150,000 to taxi operators in the area after a review found it had been overcharging for licences.
Conservative councillors in the opposition described the blunder as “embarrassing”.
Gedling Borough Council should have held separate accounts for drivers, vehicles and operators, however, during a Licensing Committee meeting on January 24, members were told that, historically, the council had not organised the accounts in this way.
An internal review was conducted last year, followed by another independent review by the Chartered Institute of Public Finance and Accountancy (CIPFA), which found the council had been overcharging taxi operators.
It also found it had been undercharging for driver licences, which meant the council had been effectively subsidising this to the tune of more than £430,000.
Council officer Mike Hill, who was responsible for the report, told the committee: “It shows that the council has undercharged for driver licences between 2016/17 through to 2021/22, by £430,728.
“It has however overcharged for vehicle licences between 2016/17 through to 2021/22 for all but one year, which was 2017/18, in total the overcharge there is £124,186.
“The council has also overcharged for operator licences between the same period 2016/17 through to 2021/22, totalling £12,542.”
As a result, the council is making arrangements for refunds, including interest, to be made.
It will cost the authority up to £150,000.
The council argued the undercharge had been subsidised by the authority itself, but members in the opposition stated operators themselves had been in fact subsidising by way of the overcharge.
Cllr Sam Smith (Con) said: “We need a better answer as to why this has been allowed to happen over six years.
“It has taken a taxi driver, that we as an authority licence, to bring this to our attention. That quite frankly is embarrassing.
“We are a service that we offer to those drivers and they should get it at a fair cost.
“It is not within their remit, we want them to go and drive residents around safely, not have to check that this authority is doing one of its basic requirements correctly.
“You say we are going to refund operators? Is it a one-off payment over six years?
“Operators have come and gone, do we have a list of operators that were in existence in that six-year period? Will every single one of them get a refund even if they have closed now or are no longer licenced by us, we are not going to miss people who have been done out of money?”
Mr Hill replied: “We have subsidised the taxi licensing service overall, so it is not as if we have deliberately set out to do this.
“It was an error, we have admitted it was an error and we are endeavouring to put that right.”
Cllr Martin Smith (Con) added: “This phrase subsidise has been used a couple of times now.
“The council may well have been subsidising, but haven’t the operators been subsidising the service as well by the tune of £150,000?”
Chairwoman Cllr Marje Paling (Lab) responded to say this was correct and added: “That’s why we are putting it right”.
Operators will be contacted in due course.
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