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Idea Exchange: How Nottingham created the UK's first workplace parking levy

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In common with other successful cities, Nottingham faces the challenge of congestion as it grows and prospers, with this congestion placing a major financial burden on local businesses.


  • Project: Workplace parking levy
  • Objective: To reduce congestion in Nottingham by funding transport improvements through a levy on parking places at larger employment sites
  • Timescale: 2012 - present
  • Cost to authority: £4m initial development and implementation costs; delivered £44m income in first five years
  • Number of staff working on project: Core team of two operational officers, business support officer and other officer
  • Outcomes: Revenue stream for key transport projects including the expansion of the tram system and redevelopment of Nottingham Station
  • Officer contact details: David Bishop

It’s an issue that Nottingham takes seriously and has been more successful than most in tackling effectively, investing in a comprehensive, easy-to-use, reliable and affordable public transport network that is one of the best outside London. This was acknowledged by transport secretary Chris Grayling on a recent visit to the city and by his department, whose figures show the city has among the highest public transport use in the country, with an associated fall of 40 million car miles over the last 15 years.

David bishop web

David bishop web

David Bishop

A key reason for Nottingham’s continued success is the introduction of the UK’s first and currently only workplace parking levy in 2012. Made possible through the same legislation that allowed London to implement its congestion charge, the levy allows the council to charge those employers in the city with 11 or more liable workplace parking places. This raises funds that are ring-fenced for citywide transport improvements. The council indicated its intention to access these powers in 2007, consulted widely across the city and held a five-day public examination to assess the plans. The Department for Transport approved the scheme in 2009 and agreed that the scheme could become operational in 2012.

The introduction of the levy was a forward-sighted decision by the city council, which persuaded the business community that game-changing investments in an exemplary public transport system, giving an attractive alternative to peak-hour driving, was in their interest and could not be achieved without a realistic contribution from them. The levy contributes towards two of the three top transport objectives of the Nottingham business community – the expansion of Nottingham’s successful tram system and the redevelopment and capacity enhancement of Nottingham Station – along with investment in Locallink bus services connecting communities with key destinations, increasingly with electric buses. More to the point, the schemes wouldn’t have happened without the levy.

Prior to its introduction, Nottingham already had progressive transport policies that were closely aligned to planning policies, enabling the sustainable growth of the city. The city has relatively low levels of car ownership and a tight road network, meaning public transport has long played a vital role in keeping Nottingham moving. The council remains the major shareholder of Nottingham City Transport, one of two award-winning bus companies operating in the city, and the first line of a modern tramway was added to the mix in 2004, funded under a private finance initiative. Nottingham was an early adopter of park and ride, which now boasts 6,000 spaces around the city including bus and tram-based services. It is also investing heavily in measures to encourage cycling, including segregated cycle lanes and bike hire schemes.

But one thing Nottingham did not want to do in 2004 was to rest on its transport laurels. The city recognised that congestion is an ever-present threat to the economic wellbeing of the city, potentially choking off investment, growth and appeal as a visitor destination. Congestion is estimated to cost the Nottingham economy approximately £160m every year, and 50% of this is a direct cost to businesses. The question Nottingham wanted to address was how to stay ahead of the game, establishing the city as a sustainable place to invest well into the future. As well as weathering economic storms, how could Nottingham remain competitive? It was at that point that we decided to consult on the levy, which we had been working on for a number of years.

Local businesses understood the need for further investment in transport improvements but inevitably voiced their concerns over the levy. There was also some resistance in the local and national media. However, the levy has achieved 100% compliance from all 2,596 eligible employers and has proved a far more efficient system than road tolling where the overheads of collection absorb much of the proceeds. Moreover, despite threats to the contrary, no businesses have left the city, or ruled out coming here, as a result of the levy. In fact the city has continued to enjoy growth and inward investment over the last five years, with more companies moving into the city than before the levy was introduced.

The levy is a demand management mechanism addressing commuter parking. It funds enhancements to public transport options, giving commuters the best public transport options at peak times when congestion is at its worst. The levy is a modest charge – currently £379 a year per commuter parking place – charged only on the city’s largest employers. It is not a major contributor to business costs; for the majority that pay the charge, the cost amounts to less than 1% of their turnover.

It also acts as an incentive for employers to manage and potentially reduce their workplace parking and consider encouraging alternative travel methods, with the council providing free support and advice tailored to different employers. Most small businesses – those with ten or fewer workplace parking places – do not have to pay the levy, and there is a 100% discount given to emergency and NHS frontline services, as well as places occupied by vehicles used by blue badge holders. In its first five years the levy has raised £44m, this has:

  • Provided the council’s ongoing contribution to financing (with central government) the new £580m city tram lines two and three, now carrying 16.4m passengers per year
  • Contributed towards the £60m redevelopment of Nottingham Station, which caters for seven million passenger journeys a year, improving platform capacity as well as connections between trains, cycles, car parking, taxis, pedestrians and trams
  • Funded the ongoing provision of Locallink bus services, which provide more than 3.5m passenger journeys a year, as well as allowing the city to invest in electric buses.

We have also put in place a workplace travel advisor, supporting businesses to develop travel plans. We have made grants available to support employers to implement sustainable transport measures such as cycle parking, showers, pool bikes, electric vehicle charge points and car park managements systems. Over £200,000 in grants has been awarded.

The levy is the first of its kind in the northern hemisphere. Undoubtedly it took political courage and continuity; our long-standing administration has implemented bold policies with long-term benefits. We are keen to share our experience and outline the challenges and benefits that levy presents, and is advising other local authorities in the UK which are considering introducing levy schemes of their own. It’s now a proven way of staying streets ahead in the battle against congestion and an important source of infrastructure investment, which is so necessary if cities are to compete and UK productivity is to rise.

David Bishop, corporate director for development and growth, Nottingham City Council






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