Funding public transport with a levy on workplace parking spaces

Today I launched plans for a Workplace  Parking Levy which could raise £500 million a year for the boroughs and Transport for London to invest in new public transport.

Based on a successful scheme in Nottingham which helped fund a new tram extension, the measure is designed to shift some of the burden of London’s transport budget from fare-payers onto people driving cars, as well as to help reduce traffic.

It would involve an annual levy to be paid by businesses not their employees. A certain number of spaces would be exempt, and the precise fee would be determined in consultation with local boroughs. Sian says a reasonable level would be £1,250, and a fair threshold would be four exempt spaces per business.

We are lagging behind other cities now in London. We need more action to help people get out of their cars and travel in ways that are healthier for them and for the city as a whole.

Car use is an important cause of our deadly levels of air pollution, and is associated with an increased risk of obesity, while walking and public transport use are associated with healthier lives.

So, as part of our integrated plans for transport which help shift the burden of paying for investment from public transport users onto people driving in the city, a levy on workplace parking spaces is an effective way to reduce daily car travel by providing an incentive for employers to remove workplace parking and bring in measures like travel plans.

Although the powers exist in current legislation for the Mayor to introduce a levy, the scheme would need wide consultation and extensive work with local boroughs, and I estimate it could be brought in from 2018.

The rate would be higher in central and inner London and lower in outer London, where people are more car dependent and public transport options are less comprehensive. There would be exemptions for the first three spaces, and for customers, fleet and delivery vehicles and occasional business visitors. And NHS premises, emergency services and Blue Badge holders would be entitled to discounts of up to 100 percent.

But for businesses currently offering parking spaces to their staff as a perk of the job while the vast majority of Londoners use public transport, it’s reasonable to ask them to pay an annual fee. The figure I’ve suggested is only around 60 percent of the cost of driving into the congestion zone every day – and it could make a serious difference to local public transport provision.

Read the briefing on how it could work here