Workplace Parking Levies

Nottingham scheme confirmed

Where it all started

The Transport Act 2000 paved the way for local authority congestion charging or workplace parking levy (WPL) schemes. Even before then London, under separate legislation, had developed a congestion charging scheme and Nottingham City Council had often mooted a workplace parking levy for the city. Durham is currently the only city outside of London to use the new powers to introduce congestion charging but the Durham scheme acts more like an 'admission charge' to a limited section of the city. No city in the UK has introduced a workplace parking levy (WPL). That may be about to change.

The first scheme

Nottingham City Council has now confirmed its Department for Transport approved plans to introduce a levy of £253 p.a. per workplace parking space in 2012 – this will rise to around £350 p.a. by 2015. Penalties for 'exceeding' the number of declared parking spaces, enforced by random checks, will be heavy.

Why workplace parking levies?

The purpose of workplace parking levies and congestion charges is to develop a revenue stream from measures that 'manage' (reduce) traffic demand and encourage modal shift. Under the Transport Act provisions the revenue must be used for investment in local transport.

The Department for Transport is offering significant grant funding to local authorities that develop charging proposals from its Transport Innovation Fund. Despite this incentive few authorities have developed schemes for fear of a political backlash.

The Local Government Association has told the Department for Transport that "it would be grossly unfair to force people out of their cars if there are not enough buses, trains and trams to give road users a viable alternative. This would simply be leaving drivers high and dry and force them into paying an unwanted tax."

How will it work?

The scheme requires all workplace parking spaces to be registered from October 2011 but only car parks with more than 10 spaces will be required to pay the levy.

All workplace parking spaces within the Nottingham City Council boundary must be registered. A levy of £253 p.a. per workplace parking space will be made in 2012 – this will rise to around £350 p.a. by 2015.

Penalties for 'exceeding' the number of declared parking spaces, enforced by random checks, will be heavy – 50% of the annual charge per day per breach. Employers could pay the WPL charge themselves – they would not have to pass it on to their employees.

It is argued that the Nottingham scheme is low on bureaucracy and requires employees to do nothing except perhaps pay the charge if their employer passes it on. If employers reduce parking space either they or their employees may also have to find transport alternatives.

Pros and cons

  • Implementation and compliance cost for companies
  • Possible skewing of the employment market in the region
  • Adverse impact on less well-off employees who have to pay
  • Adverse impact on employees who lose parking and are forced to use alternatives
  • If reduction in workplace parking occurs opportunistic parking may become a problem in nearby residential areas
  • Risk that other central government grant to local authorities which have implemented charging will be cut by amount raised through charges (substitution)
  • Companies pass on costs to customers (inflationary)
  • Inflexible and does not manage / charge road space in real time
  • Source of new additional revenue for transport funding
  • Far simpler to understand implement and run than a congestion charging scheme
  • May reduce traffic levels and congestion and encourage modal shift

What you tell us

An AA/Populus panel survey (between 1 and 7 September 2009) of 18,964 AA members found:

  • 84% agreed that a workplace parking levy was simply another way of taxing people who work
  • 79% disagreed that the local council had to raise money from somewhere and that this is as good a way of raising money as any
  • 72% agreed that it is a bad idea and the government should stop it

Join the discussion in the AA zone

 

2 October 2009