Councils should publish annual parking-charge reports to show where revenue comes from and where it is being used, according to MPs.
Louise Ellman, the chairman of the House of Commons Transport Committee, said the use of parking charges and fines specifically to raise revenue was "neither acceptable nor legal".
Launching a report into parking enforcement in England, Mrs Ellman said: "There is a deep-rooted public perception that parking enforcement is used as a cash cow, so it's essential local authorities apply stringent transparency."
The committee said local authorities in England had a collective parking surplus of hundreds of millions of pounds, but the exact amount was subject to debate.
There is suspicion parking fines off-set council spending shortfallsIt said the Local Government Association had reported a surplus from parking of £411m in 2011/12, while the RAC Foundation believed the figure to be higher at £565m.
Net income from parking services including pay and display charges and fines is expected to rise 5.6% from £601m in 2012/13 to £635m in 2013/14.
Mrs Ellman said: "Annual parking accounts would allow the public to see how much local revenue is derived from the enforcement of fines and what proportion of this come from parking charges.
"It's right that parking charges be determined locally, but hard to justify fines that substantially exceed penalties for more serious offences like speeding.
"Central government should freeze the maximum penalty charge and develop differential fines for less serious parking violations."
Councils claim parking revenue is spent on vital transport improvementsIn 2006 some 3,568,462 parking tickets were issued by 160 councils in England (outside London) and Wales. This increased by 21% in 2010/11 to 4,319,708.
But in London the number of PCNs issued over the same period fell 20% from 5,185,772 to 4,131,708.
Councillor Peter Box, chairman of the Local Government Association's economy and transport board, said: "As this report recognises, parking controls are not being used by councils to raise revenue.
"They are essential for keeping motorists and pedestrians safe, traffic flowing, and ensure people can park near their homes and local shops.
"Councils always look to be open and transparent with residents on their parking policies. Many already publish annual reports and adopt a common-sense approach to regulation that includes grace periods for motorists.
"Local authorities are working hard to try and boost trade and keep high streets vibrant through parking incentives such as free short-stay, cheaper evenings and free Sundays.
"Any income they make from charges and fines is spent on running parking services, fixing potholes and providing subsidised travel to children and the elderly."
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