As Birmingham announces proposals to introduce a charge for businesses per parking space, and other major cities like Manchester consider it too, we discuss the policy and its implications for businesses and individuals.
It has been estimated that commuters driving to and from work account for about 70% of peak time traffic in big cities such as Nottingham.
As a result, there is now considerable pressure on leading UK cities to tackle air quality and emissions levels with creative schemes to encourage people to find other solutions to driving and parking.
What are workplace parking levies?
One such proposal is the implementation of workplace parking levies (WPL), which charge companies a tax on every parking space they provide for employees. The idea is to reinvest the fees obtained in sustainable transport projects. Already Leicester, Reading, Edinburgh, Glasgow, Cambridge, Bristol and Hounslow and Camden in London have all confirmed that a WPL is under serious consideration.
Nottingham is the only UK city to have already introduced a WPL with the council investing the proceeds in public transport including tram, bus and railway station improvements. They are charging £415 per parking space, which has generated around £64m since 2012.
So, it’s perhaps no surprise that other councils are now looking at rolling out the scheme. In Nottingham, some businesses have chosen to absorb the WPL, while others have passed them on directly to the employee regularly parking in that space. What they’ve found is that people are willing to pay to have a guaranteed space.
What impact will workplace parking levies have?
Workplace parking levies form part of the Transport Act 2000 and have to be ratified and approved by the Secretary of State for Transport. They are designed to bring about a shift in mindset in urban areas suffering from pollution, while at the same time providing crucial funding for public transport and related infrastructure projects. In that respect it will certainly encourage more people to look at alternative forms of travel.
The implications of introducing a WPL to a city will inevitably see a drop in the number of people parking at work and an increase in those travelling using public transport. However, a potential issue with this is that the money generated, although reinvested, may take some time to deliver direct improvements to public transport, as these projects usually require a lengthy planning and approval process.
For businesses already facing a challenging economic backdrop, the implications of another tax may discourage expansion or employment opportunities. It may even, in some cases, mean that businesses are forced to look at more rural locations which are not impacted by WPL. Ultimately, this could create a whole new problem with businesses actually choosing to leave the cities that need the income they bring.
Councils have a difficult choice to make – balancing green emissions targets with the downsides of charging businesses, and potentially commuters, more to travel and park. The key will be reviewing the amount of income expected, the potential impact and, crucially, the environmental impact of such a scheme.
It may be that the more councils adopt the scheme successfully, the more other councils take note and consider wider rollout. Either way there is no ideal solution for drivers or for the cities. Only time will tell if Workplace Parking Levies prove to be a successful long-term initiative.
