Congestion and The Workplace Parking Levy

Congestion and The Workplace Parking LevyNottingham like many other cities has its problems with traffic congestion. In March 2006, our members in Greater Nottingham identified the A453, M1, A46 and A52 as their top priorities for investment to alleviate their problems.

The British Chambers of Commerce has attempted to quantify the cost of congestion on business and has found that the average annual cost is £21,000 in the East Midlands.

If, as Nottingham PLC, we are looking to make Nottingham a more attractive place for businesses to invest and grow, we should be examining solutions to this problem. We recognize that Government is looking at some form of road user charging as a mechanism for tackling congestion in the future and that the local authorities in and surrounding Nottingham are undertaking an exercise to map the extent of the problems and propose potential solutions. We will consider this evidence when it becomes available but recognize that road user charging does have the potential to be more effective in tackling congestion and could be more equitable than a workplace parking levy. This was also the view of the Inspector at the public examination into the workplace parking levy (WPL)

However, Nottingham City Council’s proposed solution to tackle congestion is to impose a WPL on employers with 11 or more car parking spaces located within Nottingham City Council area. If imposed, a WPL would commence at £185 per space per annum in 2010 and would rise to £350 in 2014.

Nottingham City Council says that a WPL is the best way to raise £12m a year for Nottingham’s contribution towards the cost of two more lines for its tram system, together with improved bus services and improvements to the Nottingham rail station. It is this investment package that, it argues, would make an impact on congestion whilst a WPL will have little direct effect.

All of these investments appear to be positive for the city but do not seem to address what businesses see as their top priorities in terms of alleviating congestion. Whilst businesses generally support the tram extensions, our latest survey of employers, collectively with over 14,000 parking spaces, shows that 96 % want the Chamber to fight the WPL proposal.

The minimum cost per business when the levy reaches £350 is £3850 per annum and the maximum potential cost to an employer appears to be £1.351m. From respondents to our survey, the average cost per employer in our survey if they decided to absorb the cost of the workplace parking levy is £48,000 per annum which is more than twice the annual estimate impact of congestion and the levy does not even tackle the problems being faced by businesses.

Employers face different problems if they choose to pass on all or part of the levy to their employees together with significantly higher costs to implement the levy.

We believe that Nottingham needs to encourage businesses that have already shown the ability to grow, to expand further in Nottingham and not be adding to their costs, red tape and employment recruitment difficulties. Our survey confirms that a WPL is likely to damage the competitiveness of Nottingham’s businesses; reduce investment in the city and cost jobs. The survey shows that a WPL is neither seen as an effective mechanism for tackling congestion, nor as a fair way of raising funds for public transport improvements.

Worryingly almost two thirds of employers (63%) would consider relocating away from the chargeable area and 25% would look to move either outside of the east midlands or abroad. We would not expect this to happen all at once but there is a risk that this tax may be a tipping point for some businesses to move to alternative locations. This would also have a negative impact on support businesses in surrounding areas.

The inspector accepted the concerns highlighted by the Chamber survey and his report was as negative as the terms of reference for the public examination would allow. The report describes the WPL as ‘a very blunt instrument’ and was concerned that the scheme might cause hardship for some on low incomes with no public transport alternative, could engender hostility amongst employees, and be seen as unfair more generally.

We believe that the public examination should have considered whether a WPL in its own right would be the right mechanism for tackling congestion in Nottingham. The inspector said that a WPL would probably have a very small direct effect upon growth in traffic congestion. He added that by requiring that any fundraising scheme should be in place by 2010 the Council have effectively ruled road user charging out of contention. Were there no such constraint, I would have recommended that a road user charging scheme should be pursued as a fairer way of taxing commuters, investing in public transport and reducing the growth in congestion.

We would be keen to assist Nottingham City Council in lobbying Government to give time to examine fairer solutions to tackle congestion and raise funds for public transport improvements. We will continue to represent our members’ views when lobbying at regional and national levels on this unfair tax. The Chamber is not happy with the consultation and public examination process on the WPL and will be pushing for a Public Inquiry prior to its introduction.

The Chamber has been leading a Stop Campaign against the WPL since 1999 for more information e-mail john.dowson@DNCC.co.uk

Back to Lobbying Priorities For 2008

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