Taxes and charges on road users - Transport Committee Contents

Examination of Witnesses (Questions 322 - 339)



  Q322  Chairman: Would the witnesses like to introduce themselves, please, with their names and the organisation they are representing?

  Mr Gooding: I am Jason Gooding and I am Project Manager at Nottingham City Council.

  Cllr Johnstone: I am Shona Johnstone and I am a Conservative Member of the Local Government Association's Regeneration and Transport Board and I come from Cambridgeshire.

  Cllr Walsh: I am John Walsh, the Leader of the Conservative Group on Bolton Council and a Member of the Association of Greater Manchester Authorities' Scrutiny Committee on Transport.

  Q323  Chairman: Thank you. The written evidence we have got from the LGA seems fairly enthusiastic about congestion charging. Do you still have the same views after the Manchester result?

  Cllr Johnstone: I think the view of the LGA is that congestion charging may be appropriate in individual areas. Congestion is not a national programme, but it is a local problem in local areas and it may be suitable for those areas subject to full consultation with local residents.

  Q324  Chairman: Which local authorities do you think are likely to want to take that forward now?

  Cllr Johnstone: There is a number of local authorities which are still part of the TIF programme, Cambridgeshire being one of them. Other authorities include Bristol and, I believe, Reading and a number of authorities are still expressing an interest in ways of addressing congestion in their areas.

  Q325  Chairman: What about Cambridge?

  Cllr Johnstone: In Cambridge we had a public consultation in 2007. The results were published in 2008 and showed quite a mixed picture, that 60% of the population in Cambridgeshire opposed congestion charging but 60% supported congestion charging if public transport measures were in place ahead of it, so it is a mixed picture. I would say that the public—and I suspect this applies nationally—support investment in public transport but oppose paying additional taxes. So the Cambridgeshire Cabinet decided last summer to set up a transport commission, which is chaired by Sir Brian Briscoe, to look in more detail and take evidence from those in favour and those opposed to the TIF scheme in Cambridgeshire. That is just starting to take evidence now. There is a consultation which closes in March and a number of questions which are being posed by the Commission and they will carry out their work during the remainder of 2009 and I would anticipate that they would report back to the Cambridgeshire County Council Cabinet in 2010.

  Q326  Chairman: What is Government saying to you now in relation to transport innovation funding?

  Cllr Johnstone: The Government is still supporting local authorities who wish to continue with TIF.

  Q327  Chairman: So it is not saying anything different?

  Cllr Johnstone: Not as far as I am aware.

  Q328  Chairman: Councillor Walsh, what is happening in Manchester now?

  Cllr Walsh: The position in Manchester is that the Association of governmental authorities has abandoned the TIF proposals as such and resolved at its last meeting in December that each of the 10 authorities ought to go away and produce its own authority list of schemes for future capital programmes. One of the perceived injustices of the TIF proposal is that it had a marginal benefit for a number of boroughs on the fringe of the metropolitan area, Wigan and Bolton to the north and the west in particular. It brought together a number of projects which had previously been floated to be funded by mainstream funding, the Metrolink extension, a number of the rail/bus station improvements, and also a perception that the former Secretary of State in her announcement in July 2007 about additional rail capacity had effectively said that the heavy rail element would be a national programme. The perception was that it was an unfair imposition on Greater Manchester that it would then continue to fund the TIF proposals. The other element of that and the other side of the equation is that one must look at the total proposed package of £2.8 billion, of which £1.2 billion was to come from the Congestion Charge. Within that £2.8 billion programme there was something over £600 million as a contingency sum, there was something over £330 million, or thereabouts, for the charging equipment, which was almost a billion pounds of the £1.2 billion that congestion charging was going to raise.

  Q329  Chairman: Yes, but this is about the TIF bid, is it not?

  Cllr Walsh: The point I make is that if you disaggregate and look at the TIF bid -

  Q330  Chairman: No, Councillor Walsh, I am not asking you about the TIF bid. I want to know what is happening now.

  Cllr Walsh: What I am saying is that the TIF programme of £1.6 billion of hard expenditure, just over, is now to be reviewed by each of the authorities to look at where that is to be picked up by the regional funding allocation and other mainstream funds.

  Q331  Chairman: Do you get the impression that Government is sympathetic to the bid?

  Cllr Walsh: There has been a great silence on that matter. I have written personally to the Secretary of State and not had a response in the last four and a half weeks. Other members have asked questions of ministers and we have not had a reply, so it is silent at the present time.

  Q332  Ms Smith: I want to ask Mr Gooding why Nottingham has chosen to pursue the workplace parking levies rather than a Congestion Charge?

  Mr Gooding: The Council has been pursuing a workplace parking levy now since 2000 when the legislation came into place. Really in Nottingham what we have had to weigh up is that there were obviously two choices, the road user charging, which London at the time pursued, and a workplace parking levy, which Nottingham looked at. We spent a lot of the early years really trying to work out and develop a scheme that would be specific to Nottingham, looking at Nottingham's situation. What was Nottingham's congestion problem? Mainly commuter traffic during peak periods. So that really helped to understand the congestion problem. If it was through traffic then obviously we would have moved more towards road user charging at the time. So we looked at workplace parking and we have developed then proposals over the subsequent years. We have actually developed now a business case which we took out to public consultation, explaining that the purpose of the workplace parking levy was to tackle the growth in congestion. So we are looking at Nottingham's picture. We are looking ahead and we are forecasting that there is going to be increased investment in housing and businesses in Nottingham and we are seeing that therefore there will an increased demand to travel. We believe that with it being dominantly commuter traffic during the peak period a workplace parking levy would be better suited for Nottingham in tackling that greater congestion. There is a real significant difference, though, between road user charging and a workplace parking levy. The workplace parking levy is a much smaller demand management tool. It is far more likely to have a less high direct impact on congestion. It has a far higher indirect impact. To explain that, the charge of a levy is relatively small. What happens is that that charge does not actually reduce a lot of congestion but the revenue which comes from the scheme actually provides for public transport infrastructure improvement, which will have a far higher impact on congestion. With the road user charging scheme what you will see is they normally charge on a daily basis individuals who are travelling in an area, so basically they capture all the people who are using cars in that area. With that they can have a far higher impact on congestion, without a doubt. It also generates a far higher stream of revenue and therefore can generate far higher investment in public transport. The problem you have with that is that, as you see in Manchester and as you see in Edinburgh, it comes with a far higher risk and also with a far higher cost. A lot more cost is required for the road user charging scheme, the infrastructure arrangements. It will normally cover a far larger geographical area than just one council area, therefore it brings complications. With Nottingham and the workplace parking levy it is far more targeted. The workplace parking levy is basically about targeting and charging commuters. If commuters are your problem, if you are looking at smaller areas, then it is normally low-cost, less risk, normally easy to put in and with that also easier to take out should something else more favourable come up in the future. So when we have been looking at the levy there were things about a national charging scheme at the time as well.

  Chairman: I think you have explained what it is you were doing, yes.

  Q333  Ms Smith: Presumably, though, it would entail also quite severe new measures about parking outside the workplace because that is traditionally what happens?

  Mr Gooding: Yes.

  Q334  Ms Smith: When the NHS charges its staff to park on site what happens is that all the cars park outside the sites and create mayhem on the road network in any case, so there is a risk here that congestion could increase in a sense in terms of road space with this, so you must have thought about addressing that?

  Mr Gooding: Yes. What we have done in terms of our scheme is we are actually preparing, before the introduction of the scheme, to look at traffic management measures because the levy targets an employer who provides a liable workplace parking levy space. If an employer then decides to reduce its parking or decides to charge for its parking there is a chance that employees will not be able to park on site and will go and park on the street. With that we are investing up front funding to ensure that we are prepared, so we are really looking at hot spots where we believe employers may pass on the charge or there may already be existing commuter problems. So we are virtually looking at things like residents' parking schemes, but you also look at more simple measures such as limited waiting schemes and other traffic management. So by putting investment in there it means that we are preparing for that. We are also using an element of the revenue stream from the levy to actually fund residents' parking schemes under the traffic management measures during the first three years because although it potentially could happen, it may not necessarily.

  Q335  Mr Leech: You have half answered the question I was going to ask actually about residents' parking schemes where obviously there will be a knock-on effect of cars trying to park on residential streets. You say they are going to be funded for three years, so I am assuming that the funding stream from the workplace parking levy is going to continue, so why do you not consider giving residents' parking schemes for free to residents past the three years?

  Mr Gooding: What we say is that after three years we will do a review of all the other demands on the revenue stream, so we are also funding travel planning, parking management and residents' parking schemes and traffic management measures. After three years what we will be looking at in the review is whether there is still the demand to have that revenue stream put into residents' parking schemes, whether it is still associated to the workplace parking levy and that there is an increase in the demand for residents' parking schemes, because if it is not then maybe residents' parking schemes should be funded from other revenue sources such as the local transport plan, as they are already. Basically what you would look is if the levy is still having a direct impact. After three years you would expect that any impact the levy has had will have been in the first three years, therefore any instances of displaced parking should be addressed in the first three years. If after a three year review we still decided that there needed to be funding stream, then we would allocate further funding.

  Q336  Mr Leech: Have you had any discussions with businesses in Nottingham about the potential for them relocating to other areas to avoid those charges?

  Mr Gooding: Yes. That is one of the common themes. There is no getting away from the fact that the levy is applied to a business, so therefore businesses are going to be affected. There has been quite extensive public consultation undertaken with businesses and they have voiced concerns like that, that they will pick up and move out of the city, that they will reduce investment in the city. I do not know how far you would like me to go on this.

  Q337  Chairman: Can you keep to short answers, please, because we have got a lot to get through.

  Mr Gooding: I will try to. Basically, there is a lot of cost to businesses and congestion is a big cost to business in Nottingham. The workplace parking levy—we have done studies looking at what a levy will mean to the businesses that will be liable to pay in Nottingham and it represents less than 1% of their turnover for 90% of businesses that will be liable for the levy.

  Q338  Ms Smith: Do the businesses themselves accept that work that has been done or are they sceptical about your study? Has there been any assessment of whether or not it will discourage new businesses from coming to Nottingham and choosing to go somewhere else instead?

  Mr Gooding: In the scheme one of the things we have done is in terms of businesses we have actually put in a 100% discount within our scheme because the Government does not stipulate a lot of discounts in the scheme. One of our discounts is that any business with 10 or less liable spaces will receive a 100% discount. That removes 85% of businesses from having to pay a levy in Nottingham, so we have already tried to lessen the impact. That actually leaves around 500 businesses being liable -

  Q339  Chairman: Is that right? You are saying you are going forward with this scheme and 85% of businesses will not be paying it, so you are talking about 15%, is that right?

  Mr Gooding: That is right. The 85% of businesses only accounts for 20% of liable spaces. It is almost like 80:20. By reducing the admin and the cost to 85% of businesses we have only reduced the liable spaces by 20%. Therefore, 20% of businesses in Nottingham actually account for 80% of the liable spaces. The work that is going on on the scheme does say that you should look at trying to lessen the burden on smaller businesses.

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