Government proposals to reduce parking charges will lead to a £19.5 billion hit to the UK economy
The British Parking Association (BPA) is calling on Government to reconsider proposals to drastically lower the level of parking charges to avoid seriously hampering the UK’s economic recovery.
A quarter of currently managed private parking spaces will no longer be managed
Mazars, a leading international audit, tax, and advisory firm, conducted an impact assessment on the effect of the Government proposals to reduce the level of parking charges in private car parks from £100 (reduced to £60 for early payment) to £50 (reduced to £25 for early payment). This assessment concluded that the proposals would mean 23% of currently managed private parking spaces would no longer be managed[i]. This will mean that many destinations will become increasingly congested and inaccessible, and many commuters and shoppers will no longer be able to access transport modes, retail, or leisure destinations.
Footfall declines will lead to a £19.5bn hit to UK Retail Sales
Latest research analysing footfall in UK towns and cities showed that the closure of prominent town centre car parks could lead to a dramatic decline in footfall of between 5 and 7 per cent[ii]. Applying these figures to the 2019 store-only retail sales figure of £275.2bn would mean an annual decline in UK GDP of between £13.2bn and £19.5bn[iii]. To put these figures in context, the higher range of these figures would be enough to pay for the entire £18.9bn Crossrail project every year [iv]. Small business owners on the high street and retailers in general will be affected by a decline in footfall to their stores and these impacts will be felt most acutely outside London where the deterrent will drop most, which appears to conflict with the Government’s Levelling Up agenda.
Compliant motorists will lose out
Lower parking charges will significantly reduce the effectiveness of parking enforcement and see more people taking a risk and flouting the parking rules which are in place for everyone’s benefit. Importantly, motorists who do comply with the parking rules will find it more difficult to park, will see free parking reduced and will have to pay higher tariffs.
Andrew Pester, BPA Chief Executive said, “We welcome the Parking (Code of Practice) Act and measures to introduce a single code, standards setting body and an independent appeals service. However, for this package of measures to be sustainable, there needs to be an effective deterrent to encourage compliance with parking rules and deter anti-social parking. Without effective parking management, places will become congested and inaccessible.”
The BPA will continue to work closely with key stakeholders and seek opportunities to engage with Michael Gove MP, and Neil O’Brien MP, to push for a positive outcome that benefits those whose livelihoods depend on a vibrant retail economy and the vast majority of motorists who comply with parking rules [v].
Notes to editors
For more information contact our press office: media@britishparking.co.uk / 07788 315 625 or visit our Newsroom
Notes to Editors
- The British Parking Association (BPA) is the professional body representing the UK parking and traffic management profession. We have more than 750 corporate members, which includes representation from local government, commercial providers, and operators of parking systems, as well as consultants and academics. In addition, we represent over 650 individuals working within the parking profession and have a separate membership structure which exists to support individuals in their career and professional development.
- We are a not for profit organisation working with our partners to support growth for their communities, improve compliance by those managing and using parking facilities and encourage fairness to achieve our vision of excellence in parking for all. Any surplus income arising from our work is reinvested back into activities to support our members.
- The Government proposes to reduce the cap on private parking charges for the most common breaches from the current level of £100 (reduced to £60 if paid within 14 days) to £50 outside London (reduced to £25 if paid within 14 days) and £80 inside London (reduced to £40 if paid within 14 days). https://www.gov.uk/government/consultations/private-parking-charges-discount-rates-debt-collection-fees-and-appeals-charter-further-technical-consultation/private-parking-charges-discount-rates-debt-collection-fees-and-appeals-charter-further-technical-consultation
[i] Mazars research was conducted using Companies House data, globally recognised industry profit margin benchmarking data and anonymised British Parking Association (BPA) member data. The report concluded that the new model of reduced PCN levels will result in 700,000 parking spaces becoming unmanaged (23% of managed spaces in the UK). It further stated that 46% of BPA operators would become insolvent within 12 months and 62% by the end of year 2.
[ii] Footfall research for Altrincham, Hounslow and Woking from Springboard and The Local Data Company shows large drops in footfall where there were significant car park closures (illustrating the potentially dire impact on the broader economy if car parks shut due to DLUHC's proposals):
- Altrincham - The Altrincham closure (156 spaces) in early October 2019 led to an average drop of 5.3% in Q4 2019 compared to Q4 2018's footfall (October -2.6%, November -9.9% and December -3.3%). By comparison, footfall had grown by 4.9% in Q4 2018 compared to Q4 2017.
- Hounslow - The effect of the Hounslow closures (425 spaces) on 01-Oct-17 was an immediate 4.8% decrease in the key Oct-Dec 2017 4th quarter, followed by drops in Q4 2018 & Q4 2019 of 3.5% and 7.1% respectively.
- Woking - The Red Shoppers car park (887 spaces) shut on 6-Jan-19. The footfall count nearby dropped an average of 6.3% in 2019 vs 2018's corresponding footfall figures.
[iii] GDP in the United Kingdom in 2019 was £2,255bn.
Source : https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/abmi/qna
Total 2019 Annual Sales for All Retailing excluding automotive fuel was £393.7bn. Source: ONS retail sales data https://www.ons.gov.uk/businessindustryandtrade/retailindustry/datasets/poundsdatatotalretailsales
2019 retail sales figures are being used as this was the last full year of pre-pandemic figures on record. UK retail sales is made up of the following components:
- Predominantly food stores
- Predominantly non-food stores: - Non-specialised stores, textile, clothing, and footwear stores, household goods stores
- Other stores
- Non-store retailing
- Automotive fuel (excluded)
UK internet sales as a percentage of total retail sales: in November 2021, the ratio was 30.1% internet sales to 69.9% store sales. Please note that we could have used the average 2019 ratio here of 19.1% internet sales to 80.9% store sales, but we felt the more recent figure was a more accurate projection of future store-only retail sales even though store sales are likely to recover to an extent post pandemic.
Source : https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j4mc/drsi
Applying this 69.9% leads to a pre-pandemic store-only retail sales value of £275.2bn
[iv] After overruns, the total cost of the Crossrail project is expected to be £18.9bn. Source: National Audit Office https://www.nao.org.uk/wp-content/uploads/2021/07/Crossrail-a-progress-update-Summary.pdf
[v] ICM Unlimited’s “Public Perceptions of Parking” survey of c. 3,000 adults in the UK in late 2021 found that 75% of motorists had not received a parking ticket in the preceding three years. This result was consistent with the previous survey, run in late 2019, which found that 74% of motorists had not received a parking ticket in the preceding three years.