Unit 1 Micro: Nottingham introduces workplace parking tax

Nottingham has become the first major city in the UK to introduce a compulsory workplace parking levy (WPL). Businesses in Nottingham with more than 10 parking spaces will have to pay an annual charge to the council of £288-per-space.

Critics of the scheme argue that the levy will add to costs and damage profits at a time when the local economy is struggling to drag itself out of recession. They believe that the levy will be an unfair extra charge for people who work shifts or live in areas without adequate public transport have to drive. The Taxpayers’ Alliance which is a fierce critic of what they see as inefficient local government opposes the WPL and say that 96% of Nottingham businesses in the area oppose the charge, with 62% of those businesses claiming that they would now consider relocating their interests.

The council’s defence is that the revenue from the levy will be hypothecated - that is the money will be earmarked to help fund improvements to Nottingham’s tram system, infrastructure with long term economic benefits. Other transport projects will be allocated funding from the tax.

Pricing to ration scarce parking space is an attempt to manage demand for car use within the city centre and to tackle congestion particularly at peak periods. Other cities are said to be interested in launching similar schemes and Nottingham’s experience may well tell us how quickly it will be rolled out in the years to come. A key decision for many businesses is whether to pass on the charge to their employees.

How will the charge be likely to affect:

1/ Demand for city park and ride schemes? 2/ Demand for Nottingham’s tram system? 3/ Demand for tele-working among Nottingham’s businesses 4/ Profits for businesses with more than 10 workers inside the parking levy area? 5/ Demand for public car parks

According to the Council’s web site

“All money raised from the WPL must be invested into improving local transport for Nottingham. The WPL will provide funding for NET Phase Two, the extensions to the existing tram system, as well the redevelopment of Nottingham Railway Station (the Hub project) and is also intended to support the popular Link bus network.”

BBC news video