Nottingham Workplace Parking Levy

Nottingham’s workplace parking levy is a highly successful and replicable operation that tackles congestion by incentivising employers to reduce their parking provision and funding major local transport infrastructure.

How is this tackling the climate crisis?

Parking levies limit congestion, cut emissions, and can raise millions of pounds to help fund high-quality public transport networks.

Nottingham’s workplace parking levy, introduced in October 2011, was the first of its kind in the western hemisphere. A trailblazing example, it is still the UK’s only workplace parking levy, despite a decade of successful operation and a highly replicable model. A workplace parking levy is a charge on employers who provide workplace parking spaces. This tackles congestion in two ways:
- Incentivising employers to reduce their parking provision.
- Helping to fund major transport infrastructure.

In Nottingham, the charge only applies to employers who provide 11 or more parking spaces. Smaller employers are exempt, as are spaces for disabled people, NHS premises and emergency services. The current charge per parking space is £428 a year, payable by the employer. All revenue raised from Nottingham’s levy is ringfenced by law to be spent on improving local transport.

Nottingham has one of the UK’s strongest public transport systems – this is, in no small part, thanks to its workplace parking levy.

Lessons learned

There are few barriers to other councils adopting a workplace parking levy along the lines of the Nottingham model. Funding, of course, is always a concern for councils, but whilst they may not receive the same level of central government input as Nottingham did being the pioneer, other councils will benefit from lower overall costs.

Good communication about the benefits:

A major hurdle faced in Nottingham was early predictions about business and investors being scared away by the levy. These fears have not transpired. Quite the opposite: business has flourished and the sophisticated public transport system has been a key attraction. Other councils have the advantage of Nottingham’s example to point to as evidence should similar doubts be encountered elsewhere.

A workplace parking levy will always be controversial. Councils need to be prepared to address this. It’s critical to have a highly effective communications campaign from the outset. In Nottingham, the communication strategy included mailouts to over 5,000 employers, workshops, and one-on-one meetings.

The benefits of the parking levy can feed positively into other public debates. When the Nottingham levy was launched, air pollution was not the hot topic it is now, nor had councils declared a climate emergency. The current profile of environmental issues makes today’s situation more favourable for councils considering a workplace parking levy – the public are more accepting of such measures than they were a decade ago.

Build in flexibility:

The flexibility of a levy should help subdue controversy. Any given levy can be tailored to its specific context. The size of the charge, the geographical area covered, exemptions, discounts and support packages are all details that can be adjusted. This adaptability should counter arguments about such levies being a tax on working people at a time when in-work poverty is a growing problem; if crafted carefully, there is no reason why working people should not benefit from such schemes.

The impact of coronavirus should not be taken lightly. Nottingham saw liable parking spaces fall by 50% in the first 2020 lockdown, though even during subsequent lockdowns the council still collected substantial levy revenue. If remote working becomes a permanent feature of life in the future, a financial remodel of the levy may be necessary. However, in 2021 the numbers of employees returning to office working began steadily increasing again.

Importance of ring-fencing revenue:

Another key lesson is that such levies are most effective when revenue is targeted. By making it a legal obligation to spend revenue only on public transport, Nottingham City Council has been able to maximise the impact of its initiative. Another lesson is the necessity of a thriving vision for public transport and the political fortitude needed to realise it.

What impact has it had?

Emissions impacts:
- As of September 2021, a total 7840 tonnes of CO2 emissions have been saved since the levy’s inception.
- The levy has contributed to a 33% fall in carbon emissions in Nottingham since 2005.
- 350 tonnes of CO2 were saved by the electrification of 15 buses, paid for by the levy.

Investment in public transport:
- £83m of revenue raised directly from the levy.
- A further £600m of spending on public transport infrastructure from outside sources. This £600m has funded a major extension of Nottingham’s tram network, a £60m renovation of its train station, the expansion of the city’s electric bus fleet, and £500,000 in grants to help employers make sustainable transport options available for employees.
- A 17.5km tram extension part-funded by the levy carries 20 million passengers a year.

Less congestion and better air quality:
- Reduced levels of nitrogen oxides and particulate matter emissions, leading to fewer cases of respiratory illness.
- 3 million private car miles eliminated because of public transport infrastructure improvements.
- Congestion growth cut by 47%.
- The levy enabled Nottingham to become the first local authority in the country to have its Air Quality Management Plan approved by the UK government without needing to create a charging clean air zone.

Business investment and local jobs:
- Tram and train station redevelopments led to the employment of 1,200 people.
- Public transport infrastructure has encouraged businesses to relocate to Nottingham.

Social impacts:
- A more equal city, with more opportunities for disabled people and residents without private vehicles.
- More physical activity due to new opportunities for active travel.
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