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ANNEX
ROAD USER CHARGING AND WORKPLACE PARKING LEVY
SCHEMES IN SCOTLAND - A CONSULTATION PAPER
REGULATORY IMPACT ASSESSMENT (DRAFT)
INTRODUCTION
It is important that all draft legislative and regulatory instruments that have a potential cost impact on businesses, charities or voluntary groups, should be accompanied by an assessment of the costs and benefits of the proposed regulatory action. This is formally known as a Regulatory Impact Assessment (RIA).
The main section of this paper sets out, for consultation, the Scottish Executive’s proposals on the arrangements for implementing road user charging and workplace parking levy schemes in Scotland. This annex represents the first draft of a Regulatory Impact Assessment relating to these proposals. It is being issued, as part of the consultation paper, and comments on it are, therefore, invited Particularly helpful would be further information and evidence which will help to provide a more complete picture of the likely impact of these measures.
1 TITLE
1.1 Draft regulatory impact assessment for the Scottish Executive's proposals for Road User Charging and the Workplace Parking Levy in Scotland.
2 PURPOSE AND INTENDED EFFECT OF THE MEASURE
2(i) The issue and objective
2.1 The UK Integrated Transport White Paper, A New Deal for Transport, and the Scottish White Paper, Travel Choices for Scotland, identified congestion as one of the principal costs of the growth in traffic. Congestion imposes considerable direct costs on road users through longer journey times, journey time unreliability, increased fuel consumption and frustration and discomfort. At the same time, congestion is a contributor to air pollution, which affects health, and generates noise and nuisance, all of which have a significant impact on the quality of life. Congestion also makes it more difficult for bus operators to provide an efficient and reliable service and makes the roads unpleasant for cyclists and pedestrians.
2.2 The proposed legislation will give local authorities the power to introduce i) road user charging schemes and ii) a levy on the provision of workplace parking, subject to the approval of the Scottish Ministers. This will be enabling legislation, with no duty on authorities to introduce charging. In each case, a charging scheme will be introduced as part of a package of measures within a Local Transport Strategy. All of the net revenues raised will be retained by the local authorities and the first call on them will be expenditure in support of the authority’s transport strategy. However, in recognition of the possibility that there may be insufficient good value transport projects to utilise all of the revenue raised, the proposed legislation will not restrict expenditure entirely to transport-related matters.
2.3 The objective of these proposals is therefore to give local authorities new means to tackle congestion by:
2.4 Once the legislation is in place, local authorities will be able to apply to introduce charging schemes.
2.5 The Scottish Executive also intends that legislation will give powers, complementary to those for local authorities, enabling the introduction of charging on those roads for which they are responsible (motorways and trunk roads).
2(ii) Risk Assessment
2.6 As described in paragraph 2.1 above, congestion imposes a number of direct and indirect costs on the public at large and on business. Estimates of the costs to business vary, but always amount to several billion pounds per year.1
2.7 Congestion also contributes to air pollution, which has been linked with a number of health effects, including increased mortality and the worsening of respiratory and cardiovascular conditions, resulting in increased hospital admissions, distress and discomfort for the sufferers. It is, however, not possible to make specific attribution of the effects brought about by congestion-related pollution.
3 OPTIONS
3.1 It is intended that the powers to impose road user charges or the workplace levy should be part of a much wider package of measures to address the problems of congestion and pollution. The different approaches available were considered in the review of transport policy, and the measures which will help deliver integrated transport have been set out in the UK Government's White Papers, A New Deal for Transport and Travel Choices for Scotland.
3.2 The White Papers made it clear that the "do nothing" option is not available. Congestion already costs the UK economy billions of pounds. Furthermore, there are domestic, European and international obligations which mean that the currently projected growth in traffic, congestion and vehicle emissions cannot be sustained. These include air quality objectives under the National Air Quality Strategy, which are now reinforced by new mandatory European ceilings, and the UK's domestic and international targets for reducing emissions of greenhouse gases.
3.3 The options for tackling congestion and pollution through blanket restrictions on vehicle use, for example different registrations allowed in areas on alternate days, were considered but dismissed. Such restrictions would: be administratively complex and expensive; require a considerable amount of enforcement; be prone to widespread evasion (as experienced in Athens, to the detriment of the environment); and more fundamentally, take no account of the differing degrees of need to use a private motor vehicle. Some people have no alternative but to drive every day, for instance because of the nature of their job. Blanket restrictions are too crude an instrument, nor do they provide an additional income stream for spending on improvements to transport infrastructure and services.
3.4 It is likely to be more productive, and more acceptable, to seek to reduce traffic levels by targeting specific types of journey. Some people could readily change their mode of travel, given the right incentive, whether through the price mechanism, parking restrictions or other traffic management measures. Research indicates that drivers consider that up to 30 per cent of journeys are unnecessary or could readily be made by an alternative mode. For about another 30 per cent of journeys a car is absolutely essential. The remainder of journeys fall in between.
4 BENEFITS
4.1 It is not possible at this stage to make meaningful quantified estimates of the benefits (or, indeed, the costs) of the proposals. This is for three main reasons. First, as enabling powers for local authorities are envisaged, it is not known how many local authorities will wish to introduce either the road user charging or workplace parking levy schemes. Second, most of the elements which will determine the costs and benefits of local schemes will be determined locally, in the light of local circumstances, as each scheme is developed. Local authorities will be responsible for the main design elements, selecting, among other things:
Third, decisions on whether and, if so, where to introduce charging on the trunk road network, and on the associated level of charges, have still to be taken and it is not possible to anticipate what these decisions might be.
4.2 Each local scheme should reflect the priorities identified in the Local Transport Strategy and the specific local circumstances. There is likely, therefore, to be considerable variation from scheme to scheme. It is the Scottish Executive's intention that no scheme should proceed unless and until it has been shown to be justified in terms of costs and benefits, with reference to the specific proposals for charge levels and scheme design for that scheme. This will be enforced through the requirement that all schemes will be subject to the approval of the Scottish Ministers. Similar conditions will be applied in developing any schemes for trunk road user charging.
4.3 The Scottish Executive has, however, considered the question of benefits and costs. Although quantitative data are neither appropriate nor generally available, it is possible to identify the nature of the effects of introducing charging schemes, and where the benefits and burdens might accrue. There are several studies and overseas examples which provide quantitative information and some of these are referenced below. The extent to which these can provide relevant information on the costs and effects of potential schemes in the United Kingdom generally or in Scotland, in particular, is not clear, and views are invited
4.4 In terms of the benefits of schemes which successfully tackle congestion, these should include:
4.5 Some studies have looked at the possible effects of road user charging schemes. The most comprehensive of these looked at a number of options for application in London2. This calculated that social benefits would fall within a range of some £90 million - £450 million per year (1991 prices and values), depending on the scheme adopted. More specifically, the study included, as an example, an option with a notional "medium charge" of £4 (1991 prices) all day inbound which was calculated to reduce traffic levels by 15%, with a 20% increase in journey reliability, similar reductions in journey time and a 35% reduction in carbon monoxide emissions. It must be emphasised, however, that decisions on the level of charge for local schemes will be for the local authority concerned and that the figures quoted do not represent in any way Scottish Executive expectations or preferences.
5 COMPLIANCE COSTS FOR BUSINESS
5(i) Business sectors affected
5.1 The sectors and businesses affected would depend on which instrument was being deployed:
a) Road user charging schemes will impose direct costs on all businesses which involve road transportation and delivery in those areas where such schemes are set up, subject to any national or local exemptions. Clearly this will cover a very large number of commercial concerns in the UK, including the road haulage sector; the retail sector; manufacturing industries, including all those with travelling sales representatives; agriculture; postal/parcel delivery services; maintenance and repair services; and, of course, any business with premises in the charged areas. There may also be other cases in which employees who incur a charge in the course of their duties or commuting to work may be able to claim reimbursement from their employer. Public transport and public sector vehicles may also be liable to the charges.
b) The workplace parking levy will apply to building owners or occupiers who provide parking facilities for those travelling to work, subject to any national or local exemptions. This does not include fleet vehicles (e.g. buses, postal delivery vehicles) parked at a base depot. The levy could affect all business sectors and the public sector in those areas where such schemes are introduced. The consultation paper asks for views on the way in which exemption should be handled, and whether there should be a threshold (e.g. minimum number of parking spaces) below which the charge should not apply.
In both cases it should be remembered that there should be cost savings brought about by the improvement in travel conditions as congestion is reduced and transport provision improved.
5(ii) Compliance costs for a typical business
5.2 As described earlier, it is not possible to identify meaningful figures for costs to business. Given the very wide range of businesses which may be affected by the introduction of these charging schemes, it would also be very difficult to select a typical or representative business. Another uncertainty is how business responds to the economic price signal. In the case of the workplace parking levy, for example, options include reducing parking provision, absorbing the costs and passing costs on to employees (particularly those who use the parking facility) or to customers.
5.3 The cost of the road user charging scheme to business will depend on the nature of the scheme. Broadly speaking charging schemes can be either distance-based or area-based.
5.4 A distance-based scheme has a series of charging points along the length of a road at which drivers pay a charge based on the distance they have travelled since the last charge point. This is the system used on tolled roads in many parts of the world including France and the United States.
5.5 At its simplest an area-based scheme requires drivers to pay a charge as they cross a 'cordon' established around a defined area such as the centre of a town. This is the concept used in the Oslo, Trondheim and Bergen toll rings in Norway3. Alternatively, drivers may be required to purchase a paper or plastic permit for driving or keeping a vehicle within a designated area.
5.6 "Paper-based" schemes are likely to involve the purchase of a seasonal permit. The costs of an electronic tolling scheme will be a function of the number of trips company vehicles make within a controlled area or across charging boundaries (depending on the scheme) at the times when charges operate and the level of the charge.
5.7 The cost of the workplace parking levy will be a function of the number of vehicles parked at the work premises, above any threshold that is introduced, and the levy. A survey carried out by London First of 127 companies in the Greater London area showed that the average number of parking spaces in central London was 12, and in the wider inner London area, was around 45-50 spaces. These are, however, not likely to be typical of patterns elsewhere in the country.
6 CONSULTATION WITH SMALL BUSINESS: 'THE LITMUS TEST'
6.1 The lack of specific figures precludes an analysis of the costs to a small business. It should be noted that, in respect of the workplace parking levy, the consultation document asks whether there should be a threshold which would exempt the first few parking spaces at each building. This in turn would exempt many small enterprises.
7 OTHER COSTS
7.1 The costs of introducing and operating road user charging schemes are likely to vary enormously, depending on the type of scheme adopted. There will of course be administrative costs for local authorities in developing and making an application to the Scottish Ministers for approval.
7.2 In the London study, it was estimated that a "paper-based" licensing scheme would have start-up costs of around £30 million (1991 prices), with subsequent annual operating costs of up to £70 million, although this could be reduced if enforcement were combined with parking enforcement. Start-up costs for automatic/electronic charging schemes were estimated to range from £85 million to £l40 million, with subsequent annual operating costs of £35-£55 million. Costs are likely to be considerably lower for other, smaller urban areas. Research undertaken in Portsmouth, for example, suggested that implementing a paper-based scheme could cost £2 million, with annual administration and enforcement costs of £4 million4.
7.3 There is no data available for the likely administrative costs of the workplace parking levy.
8 THE RESULTS OF CONSULTATIONS
8.1 These proposals are included in the UK Government's White Papers, A New Deal for Transport and Travel Choices for Scotland. Both documents took into account the results of an extensive consultation exercise carried out between 21 August and 14 November 1997. This draft regulatory impact assessment complements the consultation questions set out in the main body of this consultation document. The earlier sections of the document set out proposals on how road user charging and workplace parking levy schemes in Scotland might be implemented and operated.
9 SUMMARY AND RECOMMENDATIONS
9.1 The Scottish Executive is committed to the introduction of legislation to allow the introduction of road user charging and workplace parking levy schemes. The Scottish Executive intends to ensure that no application by a local authority to establish a charging scheme will receive approval without justification of the scheme in terms of costs and benefits. The same considerations will apply in the development of trunk road user charging schemes.
10 ENFORCEMENT, SANCTIONS, MONITORING AND REVIEW
10.1 It is proposed that the enforcement regime for road user charging will entail a penalty charge system similar to that operating where parking enforcement has been decriminalised under the Road Traffic Act 1991. But those making wilful attempts to evade paying the charge where it is due (e.g. by tampering with tolling equipment) would be subject to criminal proceedings. A civil penalty charge would be levied on those employers found to be in breach of their workplace parking licence. It will be a criminal offence to deny unreasonably an inspector access to premises for the purpose of checking compliance with the terms of a workplace parking licence.
10.2 The Scottish Executive will keep the implementation of this policy under general review. Monitoring and review of specific local schemes will be largely a matter for the local authorities involved, and there will be a good opportunity for formal review, if required, every 3 years as part of the new system of Local Transport Strategies
List of Footnotes
1 National Road Traffic Forecasts, DETR, 1997. BACK
2 Impact of Transport Policies in 5 Cities, TRL, 1994 BACK
3 Figures taken from Scottish Transport Statistics, No 17, 1998 Edition BACK
4 Sections 71 Ð 73 of the Town and Country Planning (Scotland) Act 1997 could be used to issue discontinuance orders requiring spaces to be taken out of commission but this would attract compensation payments under Section 83 of the Act. BACK
5 See, in particular, paragraphs 6.41 and 6.42 of Local Transport Strategies Ð Preliminary Guidance, The Scottish Office Development Department, 1999 BACK
6 Regional Transport Partnerships and the National Transport Forum for Scotland: A Consultation, The Scottish Office Development Department, 1999 BACK
7 Report on the Test Track Trials of Motorway Tolling Technologies, Department of the Environment, Transport and the Regions, 1998. BACK
8 See paragraph 2.6 of Local Transport Strategies Ð Preliminary Guidance. BACK
9 Estimating the Impact of Time-based Road User Charges on Risk Taking by Drivers, Working Paper 493, Institute of Transport Studies, University of Leeds, 1997. BACK
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