Controversial increases in car parking charges are set to cost Wiltshire Council up to £500,000 in lost revenue this year.

Just three months after the charges were introduced the Conservative-run council says fewer motorists are using the council’s car parks and officers are predicting the potential shortfall of income.

The new charges, which are deeply unpopular among businesses who say trade has been affected as a result, were designed to bring in just under an extra £1.5 million in car parking revenue to the council.

Part of the income from the increased parking charges was to go to bus companies to subsidise services following a cut in Government funding.

The new charges vary across towns in Wiltshire and in some towns free parking was lost.

Michael Hudson, chief finance officer at Wiltshire Council, said in a report to the council’s Cabinet on Tuesday: “A review of car parking income has identified that assumed user numbers are currently down overall on previous years in total, although the levels vary across the whole county.

“Due however to the increase in charges the level of income shortfall is proportionately less than the fall in usage. At this stage it is unclear if user numbers will pick up and this is just an initial reaction to the increase or part of a wider economic position. As such an estimate only has/can be made at this point, that being a shortfall of potentially £0.5 m.” Council leader Jane Scott said the fall in spending in shops in Wiltshire was not due to the increased car parking charges but the economic situation generally. She also said bus usage had gone up considerably.

At the Cabinet meeting, held in Trowbridge, she said: “The economy for retailers has changed considerably, particularly in the last four to five months.”

Cllr Dick Tonge, Cabinet member for transport , said: “We have checked neighbouring councils, in Romsey, Stockbridge, Southampton and Poole and car parking is down in those towns, it’s not unique to Wiltshire. People are concerned, their budgets are being stretched and they are using their cars less because petrol has gone up.”

However, Cllr Jon Hubbard, leader of the Liberal Democrats, said: “Don’t hide behind ‘economic conditions have changed’. The current economic conditions were there when you imposed these charges.”

The Cabinet did agree to consult with chambers of commerce, town councils and bodies representing independent retailers to see whether there is support for a car parking redemption scheme in towns.

The Cabinet had been recommended to implement a scheme across Wiltshire but after hearing some towns were not interested the Cabinet agreed to carry out a rapid consultation exercise.

Wiltshire Council has set aside £50,000 to change car park machines, signs and publicity material.