One British City’s Transit Solution: Tax Parking

Nottingham tram
A tax on parking in Nottingham, England, has funded a major tram expansion. Photo: Brian Fagan via Wikimedia Creative Commons

Raising money for transit by charging more to drive is good public policy but difficult politics. If it was easy, many more cities would have a congestion pricing system in place by now.

But one British city has recently managed to enact a transit funding stream with a fee on cars. The system is easy to administer to boot.

Nottingham, England (population 300,000), is winning recognition around the U.K. for its successful commuter parking program, which charges employers for the spaces they provide to employees and directs the revenue to transit.

The “Workforce Parking Levy” was enacted in 2011 — after an intense political fight. It requires any employer with more than 11 parking spaces to pay £375 per space per year (about $465 U.S. dollars). About 25,000 permitted parking spaces pay into the program, according to a policy briefing by the Campaign for Better Transport, a national advocacy organization [PDF].

When the idea of a parking tax was introduced, business leaders furiously opposed it and some predicted the city would become a ghost town. Those predictions turned out to be wrong. The number of employers moving into the city is rising faster than before, the Campaign for Better Transport reports. And the transportation benefits are substantial.

The Campaign for Better Transport reports that the main effect of the program has not been a direct reduction in car trips. Instead, the transit investments funded by the program are what makes a difference.

In its first three years, the parking levy injected more than £25 million into local transit, funding bus service and two new tram lines. About 40 percent of trips in Nottingham are now by transit, a relatively high share for the U.K., and planners expect a 7 percent reduction in traffic with additional transit investments coming online.

  • wklis

    Nottingham is taking from the “rich” (automobiles) to give to the “poor” (public transit).

  • John sisson

    The workplace parking levy in Nottingham is a sceme to pay for tram networks that the payers will never use.It is an unfair extra tax on drivers.Parking charges in Nottingham also discourage drivers going into the city to spend in the shops.With bus lanes and cycle lanes plus now a lane for electric cars only Nottingham is now the most car unfriendly city in Britain

  • Frank Kotter

    Taxing a problem to fund the corallating solution is the most sound scheme I could ever imagine.

    Do you have any data to support your assertion that this is hurting revenue in the shops?

  • Ben Schumacher

    I would guess that the number of businesses moving into the city having increased might be important evidence here.

  • Miles Bader

    Nottingham is now the most car unfriendly city in Britain

    This is extremely forward-thinking of Nottingham… kudos to them!

  • David Poseidon Dudich

    As the city IS Nottingham, it’s worth making the ironic Robin Hood reference.

  • Ian Hadlington

    Please do try not to obscure any facts here. “… £25 million into local transport, funding bus services and two new tram lines.” Barely true! Line 2 cost just under £670 million (with no account of disruption and environmental (tree) damage) … so, barely funded.

    Also those expecting “… a 7 percent reduction in traffic …” can expect to be entirely disappointed. Even a lay-man like myself understands that traffic systems are chaotic in nature and get more so with higher congestion. Approaching chaotic system from a causal, logical angle is foolish, and likely doomed to failure!!

  • Frank Kotter

    The claim was never made that it was. Building and operating are two separate things and a ‘revenue stream’ is exactly what this is and is used to fund these capital projects. Just as your wage ‘funds’ your mortgage….

    I can’t quite understand you second point. Do you have evidence this figure is wrong or just that you don’t believe it is measurable because of ‘chaos’?

  • Corvus Corax

    Maybe you should actually read the article before raving – uh, er – commenting. How a tax on business car-parks would effect out-of-towners’ shopping parking is lost on me. But feel free to whinge on and continue your polluting, driving-dinosaur, while more and more cities come to realize that the future cannot be cars, must be mass transit, walking, cycling.

  • Corvus Corax

    You write with a British accent and wear subfusc in your avatar; I hope you don’t think it lends any weight to you nonsensical post. Stating an opinion as fact does not make it so. As a layman myself, I wouldn’t dream of uttering such high-flown pronouncements as you, a self-professed lay-man (whatever that might be) have done. But I do congratulate you for the most pompous and vacuous Colonel Blimpish statement I have read in a very long time, viz. ‘Approaching chaotic system from a causal, logical angle is foolish, and likely doomed to failure!!’

  • Tony Johnson

    I wholeheartedly applaud Nottingham for its enlightened policies regarding public transport. The fact is they haven’t just talked the talk, they’ve gone out and are actually achieving results. It does of course take time, and funding, and this is exactly where Nottingham have really scored. It’s about time many more of our congested towns and cities grasped the nettle and started really tackling the problem.
    For those so wedded to their automobiles, what exactly do they propose as an alternative? Or do they suggest that we simply continue as we are right now, and continue to blight people’s lives through excessive pollution, lack of exercise and accidents?
    Regarding the effect on local economies, you only need to look abroad at countries such as Holland, Germany, Switzerland etc who have decent integrated public transport systems, as well as generally much better pedestrian and cycling provision. They most commonly have vibrant town and city centres with much historical interest, rather than traffic-choked polluted hellholes.
    And another thing, what about accessibility? Not everyone can afford to, or are able to drive. Often, the only alternative in Britain is to pay for a taxi, but this is hardly affordable for everyday journeys for many people either. Trams running along major arteries into and out of town and city centres, with buses circulating around concentric routes in spider’s web fashion, create a transport system which is widely accessible and affordable. This is the vision we should aim for, not traffic hell!

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