In January, following Freedom of Information Requests to local councils, Royal London revealed that above-inflation increases in local authority cremation and burial fees has generated profits of almost £100 million for councils in the last year, with an average profit margin of more than 43%.
According to a report which appeared in The Times, if these services were collectively listed as a single publicly-traded company, they would make the FTSE 250 index of leading businesses.
In the past year alone, cremation fees have risen by an average of 4.9% while burial fees are up by 6.1%. The official rate of inflation is 2.2%.
In contrast, despite a wide range of price-inflating factors, the 2017 Royal London report suggested that there was overall funeral price stagflation with a decrease in funeral directors’ fees in the year 2017-2018 and only a modest rise, well below the rate of inflation, in 2016-2017.
Frustratingly, public perception often still tends to be that these fees somehow form part of the funeral director’s fee. The 2018 YouGov survey commissioned by the NAFD showed that two thirds (63%) of respondents who had arranged a funeral in the past five years and used a funeral director were aware of these third party charges in advance, leaving just under a third (31%) unaware of them.
Chief Executive Officer of the NAFD, Jon Levett, said: “All the evidence suggests that funeral directors are making considerable efforts to keep prices down, at a time when local authorities are not. The NAFD would like to see local authorities resist the temptation to see bereaved people as a revenue opportunity. This is something that the NAFD has challenged consistently in recent years and has drawn to the attention of the Competition and Markets Authority in our submissions to their market study.
“It is frequently the case that these rises are not to cover operational costs of providing the services, but to fill holes in the overall council budget. The Local Government Information Unit (LGiU) and Municipal Journal (MJ) 2018 State of Local Government Finance report highlighted how councils are not only intending to increase council tax, but are also draining their reserves and looking for additional ways to increase charges to residents too.
“A target for these rises, in our experience, is often bereaved people. In recent years the National Association of Funeral Directors has seen countless examples of local authorities introducing double-digit price rises for burials and cremations as well as introducing fines for late running funerals and excess charges for out-of-area funerals – and confessing publicly that the revenue is to support wider council budget shortages.”
In January, Chippenham Council in Wiltshire announced plans to increase burial fees for a single grave by almost 30%.
It’s been reported to the Association that Teesside Crematorium had asked for comments on a proposed above-inflation rise of 5% in its cremation fees, made up of a 2.5% annual increase, plus a further 2.5%. In the next sentence, the council also sets out how it intends to “Review opportunities for signposting to low-cost funeral services”.
Adds Jon: “It is quite ironic that they are seeking to increase their prices by 5% and yet also explore low cost funeral options at the same time. In 2003, the cremation fee at Teesside Crematorium was £299. Today it has more than doubled to £735 and, if their wishes are granted, in April 2019 it will be £772. I hope the CMA looks closely at this as part of its market investigation.”