New report highlights how to make user charges acceptable

A new report published on 29 January 2004 by the Institute for Public Policy Research (IPPR) and the Brussels-based think tank The Centre addresses the balance to be struck between collective funding through taxation and individual contribution, also called 'user charges'.

Its release follows the recent adoption by the UK Parliament of higher tuition fees for undergraduates, which followed a heated debate. At the European level, discussions are ongoing about the revision of the 'Eurovignette' Directive, which defines which factors Member States should take into account in setting road tolls for lorries (if they wish to introduce such tolls). It also sets out how revenues raised from road tolls can and cannot be spent.

User charges have triggered considerable controversy among stakeholders. The report mentions key principles about how to make user charges acceptable:

• the goals (environmental, social) pursued through the introduction of user charges have to be crystal clear;
• politicians have to be very consistent in the arguments they use in favour of introducing user charges;
• the raising of revenues should not be the primary justification for user charges;
• people must be clearly informed on what will be the use of the revenues raised through the user charges.

The report also highlights that the political acceptability of user charges depends on how a particular service has evolved in an individual country and states that thus "the borrowing of other countries' experience is problematic", quoting as an example the role that charges for healthcare play in some countries but not others.