Designing Economic and Social Benefits into Parking Supply

With budgets in transport authorities under increasing pressure, the option of introducing workplace parking levies (WPL) has been increasingly in the news, such as the BBC’s story “Motorists who drive to work could have to pay hundreds of pounds a year for a parking space”. Public debate has been particularly active in in Scotland, where in January 2019 the Scottish Government budget proposals included proposals for introducing WPLs. Most opposition political parties have lined up to oppose the proposal with the AA saying “this will become a poll tax on wheels”. More socially sustainable solutions to parking taxes depend on a much clearer public debate.

The workplace parking levy has been described as a stealth tax, but the current tax breaks on car parking are even stealthier. Despite the importance of good planning of car parking provision, the way that land used for parking is taxed is often at odds with public policy goals. Proposals for new parking levies might resonate better with the public if the unfair burden of current taxation was better understood.

Back in 2000 the Scottish Parliament chose not to introduce WPL powers when they were being introduced in England and Wales. The Westminster proposal was regarded as flawed and unnecessary. Flaws identified at that time included the exclusion of retail sites, but the new Scottish proposals compound this by adding the exclusion of NHS sites.

Business property values and parking provision are closely linked. Within property valuation systems, the tax on parking provision is largely considered indirectly based on rental value, although some tax assessors apply a rate per car park space. If parking is free, not generating revenue directly, the property tax assessments tend to value land for car parking much lower than its social value. This undermines the business case for redeveloping land for more productive land uses, and results in less than optimal social and environmental outcomes. In England’s only use of the 2000 WPL legislation, in Nottingham, better use of land has been one of the observed benefits.

Nottingham probably succeeded in delivering its WPL in part due to the established culture of travel plans within many large employers, managing access to work for staff and customers. Across most of the country, businesses that give as much support to staff bus travel as to staff car travel are still rare. Parking charges are more easily resolved socially at the level of the employer or business, than through a tax at the level of the local authority. As one Scottish local authority supporting the WPL in 1999 stated “if all local employers have effective travel plans, and public transport markets serve all social needs, then there is no need for the levy”. These ‘ifs’ define the need for and focus of transport authority action. Well-designed parking levies make businesses with effective travel plans more competitive, also generating revenue to secure better public transport network coverage.

Far from a portfolio of well-designed schemes, the current support for WPLs follow much vaguer aims: to raise revenue, and to make car travel relatively more expensive. It should not be forgotten that bringing forward similarly flawed road pricing proposals in Edinburgh and Manchester killed a very promising element of the transport policy toolkit for many years. Accessibility audits of the early 21st century road pricing schemes showed regressive redistribution of wealth and opportunity, and the same danger applies with poorly planned WPLs. More progressive approaches must recognise that the economic and social effects of transport change tend to be much greater for non-transport sectors than direct impacts within transport. Basing WPLs on land values might help to link transport proposals with changes in the wider economy.

A “poll tax on wheels” will only stick if transport authorities fail to make the social case for change based on the unfairness of current parking taxes. Current parking taxes are neither progressive nor consistent with policy goals. A strong case could be made for new parking levies, but that has not yet happened. Based on the current public discourse, the most likely outcome will be that most current WPL proposals will be rejected. The economic and social benefits of proposed changes need to be more strongly integrated into the business case. Authorities such as Nottingham, with relatively well developed accessibility plans, have been better placed to enable a more stable debate with local people.

The Scottish Government has been astute politically, apparently solving a budget crisis for local authorities by promoting a policy they probably think has little chance of being implemented in any town or city. They have placed local transport authorities in the front line for the public flak and for failing to raise more revenue. These authorities need to demand a much clearer remit, scope and accountability for improving accessibility and connections. Continuing to be the default fall guys for higher journey costs, growing emissions and longer journey times without the remit to do anything about it, will be the price for inaction in 2019.

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