The change in physical environment is leading to a changing political climate. Local authorities across the UK are developing policies to meet combined challenges of climate change and poor air quality. The need to invest in better public transport, active travel and greener energy is leading to a pressing question being asked by councils everywhere: how do they raise the finance they need to make changes?
Seeking an answer to this question has led many politicians and council leaders to thinking what might have been unthinkable just a few years ago – a Workplace Parking Levy scheme!
The Workplace Parking Levy (WPL) is a demand management tool that disincentivises employers who provide parking by placing a modest charge on those places with a view to them reducing the supply and encouraging more sustainable modes of transport. Now, anyone looking to understand how to develop, launch and operate a WPL has one place at which they should take look – Nottingham.
Nottingham: an ambitious city
Nottingham is an ambitious city, led by some very forward-thinking politicians who are particularly ambitious for transport. It has often been said we have got the best public transport system outside of London. However, we still wanted to have more attractive solutions and alternatives to the car.
Nottingham is a very tightly bounded city. We have 3 million commuters potentially within a one-hour of journey time from Nottingham. Unsurprisingly, 70% of peak period congestion is commuter traffic.
Back in the late Noughties, congestion was forecast to grow by 15% by 2021. So real action was needed to prevent the local economy choking going forward. In 2007, consultant Atkins produced a major report for the East Midlands Development Agency that estimated the cost of congestion in Nottingham to be £160m a year, and suggested that over half of that cost was borne by businesses directly in terms of delays to the supply chain.
Nottingham wanted to develop high quality, affordable public transport. We also wanted to protect the city’s economy, improve the environment and enhance the general sustainability of the city. All that needed to be done within the context of shrinking funding coming from central government. This was the context from which the city’s trailblazing WPL scheme was born.
The WPL pathfinder
After extensive planning, Nottingham City Council introduced the UK’s first Workplace Parking Levy scheme in 2011. The aim of the WPL was to tackle problems associated with traffic congestion by both providing funding for major transport infrastructure initiatives and by acting as an incentive for employers to manage their workplace parking provision.
So where are we now? We have come a long way over the last nine years and WPL in Nottingham has been a fantastic success. We have generated £75m of new revenue since the levy started.
Money raised from the WPL has helped to fund NET Phase Two extensions to the existing tram system, which now carries more than 19 million passengers a year, as well as the redevelopment of Nottingham Station. It also supports the city’s popular Link bus network.
The annual WPL charge is currently £424 per place and all revenue raised by the levy is ringfenced by law to be spent on locally identified transport improvements. That was a really strong selling point when we did engage with businesses who, quite understandably, wanted everything that the levy would deliver but did not necessarily want to pay for it. Besides providing funds to support NET Phase Two extension, the WPL has helped finance the redevelopment of Nottingham Railway Station and the city’s popular Link bus network
Unlike other road user charging schemes, WPL generates a guaranteed revenue stream. Even in the middle of a very severe lockdown, significant revenues are being collected through the levy. This guaranteed revenue stream has enabled Nottingham City Council to match-fund and take advantage of prudential borrowing – for example, WPL has unlocked £600m of inward investment, including £200m for our electric bus fleet.
Who pays the levy?
Workplace Parking Levy (WPL) schemes can be revenue neutral for an employer as they can pass the cost on to the vehicle user – staff members. Making drivers pay for their workplace parking is an effective way of changing travel behaviour.
In Nottingham, 53% of liable car parking places are now subject to a car park management scheme where the actual vehicle user pays the levy in whole or part.
There are some really clever car park management schemes. The University of Nottingham, for example, has developed a scheme where pricing of parking is not only based on the midpoint of salary but as the university has a very green agenda, its parking policy is also linked in with carbon emissions of vehicles.
The driver of an electric vehicle could pay less to park than someone who drives a 40-year-old Range Rover that leaves a cloud of black smoke behind it. Other organisations, particularly in the manufacturing sector, have told to their workforce that they will absorb the levy if the organisation meets its carbon emissions targets. And some organisations have used the WPL charge to encourage community building activities by agreeing to cover the parking levy if their staff to do charitable work wearing the tabard of their organisation on it.
Nottingham has achieved 100% compliance among liable employees since the first year of the scheme – indeed, we have never fell below 100%. Out of the £75m have collected, only £10,000 has had to be written off, so we have debt collection rate of greater than 99.9%. Nottingham has achieved this by adopting a compliance-centred approach. We wrap our arms around employers, we support them, guide them and give them as much assistance as we can.
We have a Workplace Travel Service that offers journey planning, car park management advice and money in the form of grants – now match-funded by the employer – to deliver cycle infrastructure, not just cycle shelters, but drying rooms and other facilities for cyclists and other uses of active travel modes. We have done all that at less than 5% of revenue.
The WPL scheme has encouraged employers to reassess their operational parking. For example, Nottingham Trent University and other employers have reduced parking that has allowed them to redevelop the land.
Because WPL is a licencing scheme, it requires no infrastructure investment and the operating costs are very efficient when compared with other types of congestion charge. Employers, rather than employees, are responsible for paying any WPL charge, although employers can choose to reclaim part or all of the cost of the WPL from their employees.
Proof of success
The Nottingham WPL has been a subject of a thorough, independent and rigorous academic evaluation conducted by Dr Simon Dale from Nottingham City Council and Professor Stephen Ison, now of De Montfort University. One of the key findings and outcomes of their academic exercise was that levy has had a constraining effect on congestion growth.
We have seen mode shift, but most importantly from a political and a business perspective, the levy has not been a disincentive to companies basing themselves in the city and not impacted on investment in the city. In fact, to the contrary, there is evidence that Nottingham’s fantastic public transport infrastructure is proving attractive for business. High quality and affordable public transport is instrumental in leading to businesses locating into and relocating into Nottingham.
WPL will always be contentious, but the focus on the need to improve air quality, arguably, makes the concept much less contentious than when Nottingham embarked on it scheme. The feedback from business representatives in Nottingham is that WPL is seen as business as usual.
When Oxford stated its intention to consider WPL, the chair of its Regional Chamber of Commerce was asked for his opinion. He said Nottingham’s WPL has delivered what it said on the tin. So there is no reason why somebody should not at least consider WPL and see if the scheme is right for them.
Nottingham’s Workplace Parking Levy scheme was focussed on constraining congestion growth and achieving modal shift. Air quality was not the hot topic it is now, but nevertheless the step change improvements the WPL scheme has delivered, principally the electrification of public transport has enabled Nottingham to become the first local authority in the country to have its Air Quality Management Plan signed off by the UK government without the need to create a charging Clear Air Zone (CAZ).
There is greater awareness of poor air quality and recognition at political levels, with climate emergencies declared by many authorities. Public opinion is also more vocal on environment and health issues, which could lead to a greater acceptance of WPL schemes. Nottingham has declared its ambition to be a carbon neutral city by 2028.
WPL: The next generation
There is now fantastic ambition around the UK when it comes to Workplace Parking Levies. Leicester, Hounslow and Oxford are all progressing WPL schemes.
WPL is a very flexible tool. The Nottingham scheme covers the whole of the administrative boundary, but you do not need to do that, you can tailor a WPL scheme to fit local needs. For example, Hounslow is looking at specific geographic area encompassing a development zone in west London. By way of contrast, Oxford is looking at a large swathe of land across the east of the city. You can also set different charging levels, either setting a flat rate like Nottingham or based on identified geographic areas.
We believe that a WPL scheme can be implemented from start to finish well within one electoral cycle if the will and resources are there, and you follow the Nottingham model. That’s really important when you have perhaps not got the same level of political stability that a city like Nottingham has.
Talk to the experts
Nottingham has a huge amount of experience in the world of WPL. The city council has long supported peers who are interested in a WPL, discussing the scheme in articles and at conferences. Such is the current level of interest, we have now created a consultancy service, led by Jason Gooding, Nottingham’s Head of Parking, Fleet and Transport Services, and myself. We offer advice at the outset of schemes, evaluating whether or not a proposed scheme is appropriate and viable for a specific area. Then, as a project progresses, we can offer informed advice on planning a scheme, the legislative process and implementation.
For example, Nottingham is providing consultancy advice to our neighbour Leicester City Council. We started off our work for Leicester by doing a feasibility study to see if WPL is right for them. Leicester’s City Mayor, Sir Peter Soulsby, is 100% supportive of WPL and sees it as a way to deliver the fantastic ambitions he has for the citizens of Leicester. Sir Peter is really keen to engage with business leaders in Leicester, who have been generally positive.
Nottingham’s WPL scheme has also made an impact on the international stage. We have talked to cities from around globe directly and at events, including ones organised on behalf of the Foreign and Commonwealth Office. Nottingham has also delivered consultancy advice to a capital city in the southern hemisphere.
We have developed a number of products including a web-based end-to-end Workplace Parking Levy system, which employers use to manage their WPL licences and the compliance team use for all aspects of managing the scheme.
During the summer lockdown, in the absence of being able to do a parking survey due to COVID restrictions, we developed a Desktop Parking Audit tool that uses real data from the Nottingham scheme to estimate the number of potential liable workplace parking places. The algorithm using multiple regression analysis was developed by Dr Simon Dale, who conducted the WPL evaluation and Usman Aziz who is providing project support to the WPL consultancy team. It estimates the amount of potential liable workplace parking in the other city and enables financial modelling for the business case. Our colleagues in Leicester are benefitting from this innovation.
Nigel Hallam is WPL Service Manager at Nottingham City Council
He spoke at the ‘Workplace Parking Levy: From policy to practice’ webinar, which is now available on the Landor LINKS Live YouTube channel.
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