Figures released by East Lindsey District Council confirm the authority expects to make a £1.63m ‘surplus’ on car parking in the next 12 months.
The statistic has drawn a damning response from motorists who accused the council of using car park revenue as a ‘cash cow’ to boost its pension fund.
It also appears to put ELDC on a direct collision course with the Government after Communities Secretary Eric Pickles warned last month that councils could not rely on car parking to generate funds.
However, chief executive Stuart Davy has launched a strong defence of ELDC policy and insisted the surplus would be “reinvested into services for the community.”
He also stressed ELDC was complying with Government rules and regulations.
Mr Davy said: “The council predicts it will generate £2.79m in car parking income during 2015/16 - a similar amount to 2014/15.
“The council anticipates its car parking service will cost £1.16m to run during 2015/16.
“The difference is £1.63m. This money is reinvested into services for the community.
“The Law (Section 55 of the Traffic Management Act) allows for any income generated by councils through Excess Charges Notices to be used to support the cost of administering the car park service and any costs associated with car parking, such as relining, resurfacing and other maintenance.
“Under the Act income can also be used for purposes such as improving or maintaining open land and for the provision of outdoor recreational facilities, such as parks and gardens.”
There have been complaints in the past from business owners in Horncastle, claiming car parking charges are driving customers elsewhere.
Car owner Alan Kelly, of Horncastle, said: “The whole issue of car parking is a disgrace.
“How can East Lindsey claim they put the money from car parking back into the community? Where is the evidence?
“All they are doing is using motorists to prop up their pension fund. No wonder they can all retire at 55.”
Angela Mortimer, of Louth, added: “The council should hang their heads in shame and they wonder why town centres are deserted.
“The charges should be reduced, or scrapped. Yes, the council should be allowed to break even but a £1.6m profit is ridiculous.”
Steve Cooper, of Horncastle, added: “I wouldn’t mind if the money went to actually improving roads but it just seems to disappear.
“I know roads are the responsibility of the County Council but perhaps its time the two authorities got together and did something positive.”
Figures released by the Government last month showed many local authorities made substantial profits from car parking.
That led Mr Pickles and Transport Secretary Patrick McLoughlin to warn the policy would not be allowed to continue.
New laws were also announced, designed to help local shops by giving drivers a 10-minute period of grace before they receive a ticket.