City Parking posts loss for fifth year in a row

CITY Parking has posted an annual loss of more than £1m.

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n Opposition leader Graeme Hendry is calling on Labour to get a grip on the situation with City Parking, which he calls 'a drain'
n Opposition leader Graeme Hendry is calling on Labour to get a grip on the situation with City Parking, which he calls 'a drain'

The council-owned firm has now ended five consecutive years in the red since it was set up by former city leader Steven Purcell in 2007.

Accounts filed with Companies House over the Christmas period showed the business, which runs on and off-street parking and issues parking fines, made a loss of £1.029m in the 2011-12 financial year.

This was a slight improvement on the previous 12 months, when it lost £1.283m.

The company has never posted a profit and its total losses now amount to £5.1m.

Opposition groups have long criticised City Parking, one of the arm's-length external organisations or Aleos set up by Glasgow.

Late last year Unison, which represents many of the company's staff, called for the business to be taken back under direct council control.

Graeme Hendry, the SNP leader of the opposition on the local authority, urged action to stop the losses at the parking firm – saying they were putting other council work at risk.

He said: "Instead of considering closing learning disability day centres, Labour must get a grip of City Parking.

"The constant losses and bailouts are a drain on council resources and putting vital front-line services at risk"

City Parking loses money because its operating profits –from running its car parks and other businesses – are lower than the interest payments it must make on the huge mortgage it took out when it took over council car parks.

Council chiefs highlight that the business makes an operating profit.

In 2011-12 this was £807,379, up from £720,283 in 2010-11.

However, council sources stress the business is operating in a very tough economic climate, with the number of people driving in to the city and parking still depressed compared with the heady pre-credit crunch days when City Parking was first created.

They also continue to defend the City Parking model, which they say enabled the council to generate a huge lump-sum capital receipt when the business "bought" Glasgow's car parks from the council.

A spokesman said: "City Parking has a long-term business plan and, since it was established, has made an operating profit of £1.2 million; generated capital receipts of £40.2 million, and invested £4.8 million in the city's infrastructure.

"It is trading in a difficult market, but the parking operation would still have faced these challenges had it remained within the core part of the council.

"What wouldn't have been possible is the investment in infrastructure and facilities that City Parking has delivered.

"Setting up arm's-length external organisations has generated one-off income of £160m for the council and they save us £23m every year. We will always look for ways to save money for the people of Glasgow."

Local government

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