Workplace Parking Levy

The recent deal agreed by the SNPs and Scottish Green party, as part of the latest Scottish Budget, will allow Scottish councils to introduce a workplace parking levy (WPL).

With the WPL resulting in employers having to pay an annual tax to the council for each parking space, this could result in employees who drive to work having to pay (possibly hundreds of pounds a year) for a parking space.

The initiative is being hailed by Environmental groups who believe it will help reduce congestion and pollution by encouraging motorists to use other methods of transport to get to work. However, with many employees having no feasible alternative option than to drive to work, those opposing the new levy say it will simply be a new tax for employers to pay, with the potential for this burden to be passed to employees.

With Scotland now looking to follow Nottingham’s lead on a parking levy, is this the future for all UK employees?

Scottish proposal

With challenges over getting the latest Budget signed off by the Scottish parliament, the minority SNP government announced that it has reached a deal that will see the Scottish Green party back its budget proposals; with part of the deal being a pledge to allow councils to introduce WPL.

With both the SNP and Scottish Green party backing this introduction, it’s highly likely to pass and become law; with the only exception to the WPL being NHS workers will not have to pay the levy.

Current Nottingham Scheme

The scheme in Nottingham was introduced in 2012 to help reduce traffic congestion in the city; with employers who provide 10+ parking spaces for staff paying about £400 a year. Some employers choose to foot the bill themselves – while others pass on some or all of the cost to workers.

The tax has raised about £9m a year since it started, with the money required by law to be spent on sustainable transport projects. So far, it has helped to pay for an expansion to the city’s tram network and a redevelopment of its main railway station, as well as supporting its fully-electric park-and-ride bus network.

The case for and against

In Nottingham, it is estimated that the scheme will take the equivalent of 2.5 million car journeys off the city’s roads each year, with public transport now accounting for 40% of commuting journeys.

With the results of the Nottingham scheme being in place for a few years, supporters of a WPL say the reduction in congestion in Nottingham alongside the improvements to public transport infrastructure (paid for by the WPL) show the value of such schemes.

However, critics argue that many people do not have a viable alternative to a car for their morning journeys e.g. parents who drop children at school on their way to work. With no upfront investment in public transport as part of the WPL schemes, the critics argue the alternative transport options are not up to scratch for large numbers of people to switch from cars.

EVP Comment

Following the recent climate change protests across the UK, there is an increased political focus on the UK’s environmental performance. Schemes such as WPL could therefore gain some political airtime in the coming months. However, the current UK focus is on Clean Air Zones, with multiple cities / councils reviewing options to reduce pollution by introducing charges on certain vehicles entering cities. The likelihood of cities introducing a WPL alongside a Clean Air Zones appears overly prohibitive, particularly to the local businesses. The wholesale introduction of WPLs in the UK therefore seems unlikely if we continue to focus on Clean Air Zones as the most appropriate option to help reduce commuting congestion and pollution.