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Thoughts on the Workplace Parking Levy

As part of a budget deal, the Green party have persuaded the SNP to allow councils to introduce a workplace parking levy (WPL) that will charge employers for every parking space they provide for employees. Employers can then decide to either pay the levy themselves or to pass on the cost to employees. To be honest, I don't think that the charge will actually be introduced any time soon, but instead this is a token gesture to allow the Greens to say they have stood up for local government. It is now up to those councils to decide whether to use the powers.

I want to use the opportunity to look at the merits or otherwise of the Workplace Parking Levy.

The stated aim is to reduce peak time congestion and pollution. It appears to try and avoid business customers and guests. The suggested charge is for £400 per year per parking space. There are exceptions for different types of employment, disabled parking and car parks with less than 10 places.

My initial concern with the proposal is that it is a very blunt tool for the job. Before I go any further I should state that I do not have any problem with using 'sin taxes', that is charging people a tax or levy in such a way to drive behaviour in a desirable direction. In the case of the workplace parking levy though, it is not really encouraging people to travel by alternative transport, but simply to get employers to remove parking for employees. It is a subtle difference, but I think it will have a big effect on the way it actually drives behaviour.

  • Assuming my employer just absorbs the cost themselves, I have absolutely no incentive to avoid driving.
  • Assuming my employer passes the cost on to employees, if they deduct it from everyone's wages equally then again I have no incentive to avoid driving.
  • Assuming my employer passes the cost on to employees and gets those of us who do want to use the carpark to pay an annual fee of £400. There are occasions when I need to use the car, so I will have to pay for the year. Again I have no incentive to avoid driving on any individual day, I have already had to pay for it!
  • Assuming my employer passes the cost on to employees, but instead charges a daily charge. In this case, there is an incentive to me to avoid driving on any individual day. On days I need to drive, I will drive and pay. On days I can avoid it, I am encouraged to cycle. The problem here is that there is nothing in it for my employer. If everyone who can ends up cycling during the summer, my employer will have a half empty car park, but they well still have to pay for the spaces themselves. So my employer is not incentivised to setup and administer such a scheme.

This also has some issues with some other types of work:

  • Part time workers. If someone only works three days a week, who should pay for their space the other two days of the week?
  • Shift workers tend to work at odd hours, often changing shift outside of the normal rush hour traffic. Do we still want to charge people who are starting or finishing work at 11 at night?
  • Seasonal employers. There are some workplaces which employ a significant number of workers for only part of the year. The number of people working in the refinery will more than double during a turnaround. Similarly at British Sugar, the full factory only operates for half the year. The rest of the year there are less people employed in the factory. Should these employers have to pay for empty parking spaces for the rest of the year? Or should the seasonal workers just get charged a premium to cover the cost? Note that if you charge the seasonal workers more, they may have to pay that premium multiple times as they work for other employers at other times of the year!

Another unintended consequence could come from an employer who simply removes an employee car park and forces their workers to use up public car park facilities, crowding out visitors and other businesses customers.

So what would you do?

While it is fun to criticise something, I like it when people also offer other ideas to help fix the problem. As I said at the start, I am not against sin taxes, just ensure that they do encourage the behaviour that you actually want. So is there another way which will encourage people to use their cars less and help reduced congestion and pollution?

Well what about a congestion charge?

You could place a congestion charge for use during peak periods only. This would still allow customers to arrive at times outside peak travel without getting charged. It would also allow people working late at night to travel without getting charged. And because people are charged per journey, any trip that you can avoid by cycling or taking public transport, you are incentivised to do so. Part time and seasonal workers are only charged when they actually use the roads. Disabled workers and those in exempt lines of work could also get given a free pass.

Of course a congestion charge would be harder to setup and manage. Rather than walking round each employer counting their parking spaces and sending them a bill once a year, the council would have to have lots of number plate recognition cameras and the payment structure behind it. But considering all the other issues with the workplace parking levy, I don’t think it is a particularly suitable way to actually encourage people to stop using their cars to get to work. Though it would allow councils to raise taxes while claiming to be doing a good thing for the environment.

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