Parking charges could rise as businesses and councils pass on £1 coin upgrade costs

PARKING charges may rise due to the soaring costs of the new £1 coin rollout, experts have warned.

The round £1 coin ceased to be legal tender at midnight, meaning vending machines, parking meters, self-service checkouts and shopping trolleys will now reject them. Businesses are under no obligation to accept them.

But the switchover has cost local councils and businesses tens of millions of pounds in costs that could be passed to the consumer.

James Daley, managing director of consumer campaign group Fairer Fi- nance, told The Daily Telegraph: “Whichever organisations bear the increased cost of accepting the new £1 coin are likely to pass it on to the customer rather than take the hit on its bottom line.”

He added: “The old coin was incredibly easy to forge so that was costing money as well so the Royal Mint did not do a very good job and now here we are. Businesses are going to struggle and the government should be sympathetic and provide some support.”

The process of modifying machines across the UK is estimated to have cost more than £100million – five times the originally Royal Mint estimate.

The British Parking Association said the cost of replacing or converting 80,000 machines would reach £50 million, while the Automatic Vending Association, whose members operate the UK’S 500,000 vending machines, says refitting them will cost £32million.

Local councils, already buckling under the pressure of crippling budget cuts, have had to pay to adapt the majority of the country’s parking ma- chines and could try to recoup costs by increasing parking charges.

When the new, thicker 5p and 10p coins were introduced in 2012, councils complained that the switch could cost £5.5million.

The Local Government Association said local authorities had been forced to adapt parking meters despite facing an overall funding gap of £5.8 billion by 2020.

John O’connell, chief executive of the Taxpayers’ Alliance said it was important that people used the correct currency but added: “Councils must ensure that the cost to taxpayers of updating payment machines doesn’t outweigh the benefits of cutting fraud in the wider community.”

An estimated 500 million of the old coins remain in circulation. Some retailers such as Tesco, Aldi, Iceland and Poundland, will continue to take them for between one and two weeks. Old coins can be taken to any high street bank or Post Office until further notice.