Treasury 'should foot coin change bill'

The Treasury should pay the £5.5m bill that councils face for altering parking meters to accept new coins, the Local Government Association has said.

From January, 5p and 10p coins are set to be minted using steel instead of copper and will be 11% thicker.

The Local Government Association, which covers England and Wales, says the cost is an extra burden on councils.

The Treasury said the new coins were cheaper to make and the move would save taxpayers money.

The LGA also called for an urgent decision on whether changes will be made to the £1 coin, to ensure councils do not face the expense for a second time.

Councillor Peter Box, chairman of the Association's economy and transport board, said: "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."

"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."

The LGA said different councils would face different bills, with Wakefield facing £22,720 on 92 machines, Leicester £18,000 on 200 machines and Watford £13,500 on 56 machines.

The coins are currently made from the nickel and copper alloy cupro-nickel.

The Treasury plans to make the new coins from nickel-plated steel instead of the alloy, which has become more expensive as the price of copper has risen in recent years.

Last year, vending machine companies warned that the plans could cost the industry £100m in recalibrating machines to recognise both the old and new coins.

The Treasury said many countries, such as Canada, New Zealand and Russia, have already moved towards lower-cost coinage as a way of reducing spending.

A spokesman said the government had consulted before deciding on the change and the introduction of the new coins had been delayed to allow industry - including local councils - time to prepare.

"We also anticipate it will take many months for the new coins to reach significant circulation levels, giving extra time to adapt or replace machines and substantially reduce costs," he said.