Nottingham City Council this weekend became the first local authority to charge a workplace parking levy, 12 years after the power to impose these was introduced.
The levy is charged on parking spaces provided by employers for their staff, and revenues must be devoted to transport projects.
Levy powers date from the Transport Act 2000, but intense hostility from businesses has deterred other councils.
Under Nottingham’s scheme employers, including the council, must pay £288 a year per space if they provide 11 or more parking spaces. Those with 10 or fewer require licences but are not charged.
Employers have licensed 45,500 places, of which 28,000 are chargeable, giving first year revenue of some £8m, which the council expects will rise to £14m in later years.
The council will use the money towards its 25% share of the cost of extending the city’s tram system, for subsidising the Link Bus network to key employment areas, and for refurbishment of Nottingham station. It cannot be used as a revenue stream for borrowing.
Jane Urquhart (Lab), portfolio holder for transport and planning, said: “Without it we wouldn’t be having two more tram lines, or indeed the railway station redevelopment, both of which are now under construction.
“These projects, along with the A453, still top businesses wish list for infrastructure improvement in the city.”
The council resents the business community’s campaign against the levy, since it has simultaneously pressed for the transport projects.
A council spokesman said: “The council considered other methods such as a congestion charge, but that did not get off the ground and a workplace parking levy is far cheaper to implement as we do not need a lot of cameras for example.
“Business continues to oppose it. It is not happy and never has been but it supports the transport improvements and can’t say how else the money would be raised.”
A spokesman for the Derbyshire and Nottinghamshire Chamber of Commerce said: “We are still opposed to it. We do not think the levy is a business friendly way to raise money for transport infrastructure.”
Imposing the levy is also expected to spur employers to encourage their staff to walk, cycle or use public transport rather, so reducing the growth of congestion in the city.
The reduction in car commuting and the impact of transport improvements will reduce the number of car journeys by 2.5m by 2015, the council estimates.
Meanwhile, roads minister Mike Penning (Con) has approved conversion of the A453 into a dual carriageway around Nottingham between the M1 and A52, following a public inquiry.
This is expected to cost up to £194m, with Nottinghamshire CC contributing £20m and Rushcliffe BC £500,000.