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Parking - The Cash Cow Myth

Parking - The Cash Cow Myth

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Published by John Siraut
Review of local council parking costs and revenues
Review of local council parking costs and revenues

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Published by: John Siraut on Oct 13, 2010
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10/19/2010

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analysis
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the enforcersanalysis
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the enforcers
LOCAL AUTHORITIES
have relatively few sources of revenue that theycontrol. One is parking. For some years there has been a common perception thatparking is an enormous cash cow for local authorities. But my own research of on-street and off-street revenues shows that this is not the case for most councils.At first glance, it does indeed seem that huge sums are pouring into councilcoffers. Analysis of the 2007/08 financial returns to central government for all of England’s local authorities shows that parking generated £1.3bn. However, behindthat headline-grabbing figure, the story is far more complex. Local authorities raisebroadly an equal amount from on and off-street parking, but at an individualcouncil level their importance is vastly different.
The ‘cash cow’ myth
 Very few councils generate big revenues outof parking while almost 100 are making aloss,
John Siraut
reveals
Loss-making councils
Across both on and off-street parking, total net revenues after capital costs acrossall English local authorities is slightly under £370m, but just ten local authoritiesaccount for nearly £150m of that.In fact, almost 100 local authorities lost money on parking in 2007/08 totallingnearly £80m between them. Of those, around 60 lost £16m on day-to-dayoperations, that is, excluding capital investments (
Tables 1 and 2
).Many authorities see parking more as a service than a business, providing free orlow cost on and off-street parking, so they generate insufficient income to covercosts. In some authorities park & ride operations provide out of town parking,which once expensive bus contracts are factored in are heavily subsidised toencourage use.
Council Operating loss (£000)
South Bedfordshire -277Broxtowe -287Wellingborough -307Fenland -317Knowsley -320South Gloucestershire UA -341Surrey -776Essex -1,015Norfolk -2,314Lambeth -5,817
Table 1:The ten biggest loss makers on operating costs before capital items are included
Council Net operating loss (£000)
Surrey -2,012Coventry -2,072Rutland UA -2,164Sefton -2,208Norfolk -2,630Peterborough UA -3,127South Lakeland -5,586Newcastle uponTyne -6,032Lambeth -8,797Tower Hamlets -24,099
Table 2:The ten biggest loss makers including capital expenditure
So, car parking revenues are an important source of income for only a handful of authorities. For many authorities car parking is a drain on resources. However, itrarely makes sense to subsidise car parking.Research shows that parking charges play a limited role in people’s shopping andvisiting decisions. Rather it is the range and quality of the retail or leisure availablethat is most important. Improving the quality of the retail offer and public realm willprovide far better returns than spending money on subsidising car parking.
 The top ten earners
On-street parking generates almost £700m across England, but ten councils (all butone of them in London) account for almost half of that (
Table 3
). Central London,with its huge pressures on parking spaces, can extract high levels of revenue.
Council Gross revenue (£000)
Westminster 84,639Camden 44,562Kensington & Chelsea 39,464Islington 31,406Lambeth 29,274Wandsworth 26,395Hammersmith & Fulham 21,789Hackney 17,329Brighton & Hove UA 15,711Ealing 13,763
Table 3:Top ten gross revenue earners from on-street parking
Outside London, the ten highest earning councils raised only £70m betweenthem (
Table 4
), less than Westminster on its own. It is also notable that relativelysmall authorities such as Brighton & Hove and Milton Keynes raise more moneythan major cities such as Leeds and Manchester.Milton Keynes is fairly exceptional, with some 20,000 parking spaces, mostlycharged, surrounding each block within the town centre, commercial and stationareas. Brighton & Hove, meanwhile, is similar to many London boroughs in thatdemand for car parking spaces way exceeds supply.
Council Gross revenue (£000)
Brighton & Hove UA 15,711Birmingham 9,637Milton Keynes UA 8,650Manchester 8,204Leeds 7,213Kent 5,721Liverpool 4,353Essex 4,220Bristol UA 3,801Newcastle uponTyne 3,765
Table 4:Top ten (non-London authorities) gross revenue earners from on-street parking
However, on-street parking is clearly not the money-spinner it may seem as localauthorities spend over £450m enforcing regulations and payments. Net revenues in2007/08, excluding capital costs, were £230m across all local authorities, with justsix (Brighton & Hove, Hammersmith & Fulham, Wandsworth, Camden,Kensington & Chelsea and Westminster) accounting for half that amount.
 John Siraut
 
Almost 100 councils lost money onparking in 2007/08 totalling nearly£80m

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