Economics of NHS Car Parking Charges

The total amount raised in charges and fines from those using NHS car parks continues to surge. There is lots of economics in this issue including arguments relating to equity, monopoly power and externalities.

The starting point is this article from BBC news - hospitals in England collected more than £120m last year - up by 5%.

Hospital parking charges in Scotland and Wales were abolished in 2008. Three car parks in Scotland, operated under Private Finance Initiative (PFI) contracts still have charges until their contracts run out.

NHS Hospital Trusts and Foundation Trusts are responsible for setting their own car parking policies and schemes for patients, visitors and staff.

Some provide relief from car parking charges for certain categories of visitors.

For example, Leeds Teaching Hospitals NHS Trust offers a number of concessions for

• blue badge holders
• volunteers
• patients receiving cancer treatment
• patients receiving renal treatment and dialysis
• patients receiving cystic fibrosis treatment
• close relatives of patients who are receiving end-of-life care
• parents and carers of seriously ill children
• relatives of terminally ill patients
• relatives of major trauma patients requiring critical care.

Some critics of NHS car parking charges have argued that hospital parking is a stealth tax on the vulnerable and that hospitals are taking advantage of a low price elasticity of demand because of the necessity of making a journey to hospital perhaps for an out-patient appointment or to visit a relative.

Others argue that the money raised from charges could be offset by prescribing more generic drugs which are cheaper than patented pharmaceutical products.

Charging for car parks can have the unintended consequence of people finding free parking as best they can on nearby streets adding to congestion and causing inconvenience.

Many NHS trusts defended their revenues, saying some or all of the money was put back into patient care or was spent on maintaining car parks or grounds. Charges help to put off shoppers and commuters who might cause car parks to be full when hospital visitors need to use them.