City of York Council failed to fully explain how its digital parking permit scheme worked to a local business owner and did not consult trade organisations before implementing it, according to a report by the local government watchdog.

The Local Government and Social Care Ombudsman (LGSCO) investigated after a guesthouse owner complained about the policy – introduced by the council in September 2021 – which means permits are now only issued and stored online.

She said the system is not flexible or suitable for guesthouses when seeking digital parking permits and inputting vehicle registration details for guests and overseas visitors.

The council issued a penalty charge notice (PCN) for parking without a permit to a resident staying in her guesthouse who had arrived unexpectedly and had checked in without the owners being on site in February.

There was confusion about what time of day a permit has to be registered by and the visitor left an unfavourable review of the guesthouse online. The owner paid the fine for her customer.

The council initially refused to cancel the PCN despite the guesthouse owner’s appeals, but cancelled and refunded it after the woman complained to the LGSCO.

It then apologised for the confusion and for not communicating effectively with her about the times of enforcement. It clarified that no enforcement action would take place between 9pm and 8am.

During an investigation into the complaint by the LGSCO, the council said it had not specifically consulted business owners about introducing the online parking system, but said the public did have chance to give their views in 2019 and 2020.

The LGSCO inspector said in a report: “I would have expected the council to have told the trade associations as part of its publicity, given the digitalisation of permits is a significant cultural and procedural change.”

The council did send letters to guesthouses and businesses throughout 2021 explaining the change to the digital system.

The report added: “It said it recognised there were some early problems with the online system, and this was a cultural change for business owners.

“The council recognised guests may arrive unexpectedly or late into the evening and made the concession to its parking restrictions by not enforcing parking controls between 9pm and 8am.”

The council also said it would always consider individual or exceptional circumstances and monitor the impact on businesses in general.

The report’s author said the council had caused the guesthouse owner “confusion and frustration”, but said they were satisfied the council had remedied the injustice.

“I do not find fault with the council for the flexibility or implementation of its digital parking policy,” the report added.

The rollout of the digital parking permit system has caused problems for some people in York, with some councillors saying a significant number of residents have complained to them about it.

A meeting of the economy and place policy and scrutiny committee will consider the issue on November 14.