By Matt Jarram, Local Democracy Reporter
More than 100 Nottingham businesses are no longer paying out for a controversial council scheme which charges businesses for using their parking spaces.
Nottingham City Council introduced the Workplace Parking Levy in 2012 to reduce congestion and carbon emissions.
Businesses which have 11 or more parking spaces must pay an annual charge per space, with employers choosing to reclaim part or all of the cost from their employees.
Currently, the charge is £428 per space, but this will rise to £458 from April in line with inflation.
Business group East Midlands Chamber believes the rise will stretch companies’ margins at a time when they are struggling in the aftermath of Covid.
Before the pandemic, there were 2,061 employers in Nottingham, of which 473 were eligible and charged for the Workplace Parking Levy.
This has fallen to 1,797 employers in Nottingham, of which 370 are eligible and charged for the levy – a fall of 103.
And income generated from the levy has reduced from £10.7m in 2019/20 to £8.4m in 2020/21.
Money from the scheme is ringfenced for public transport including improvements to the tram network.
An increase in the number of people working from home during the pandemic has been cited as one of the reasons for the losses.
A Nottingham City Council spokesman said: “Employers have responded to the Government lockdowns and, as a consequence, licenced places have reduced although by December 2021 licenced numbers had bounced back to 70 per cent of pre-Covid levels.”
The number of parking spaces has also reduced significantly. Currently there are 32,077 places compared to 40,915 pre-Covid. When the scheme began there were around 43,000.
The levy money is used to support major transport projects including Phase Two of the NET tram network, which included the extensions to Chilwell and Clifton.
In 2011, the council entered into a Private Finance Initiative (PFI) with Tramlink to build NET Phase Two and operate the extended tram system in Nottingham until 2034.
But the pandemic saw tram usage fall, causing a direct impact on fare income, although the network has received millions of pounds of financial support from the government.
When asked by the Local Democracy Reporting Service if the fall in levy spaces could affect services, a council spokesman said: “Workplace Parking Levy income supports major transport projects such as NET Phase Two and the redevelopment of Nottingham Railway Station and these are long-term financial commitments that are continually kept under review and the financial model adapted as necessary.
“All employers who provide workplace parking places are legally obliged to licence these places and may be liable to pay, it is not an optional scheme.
“Since year one of the scheme the council has delivered 100 per cent compliance by liable employers and that level has been maintained to date.”
East Midlands Chamber chief executive Scott Knowles stressed: “If the revenue generated by the workplace parking levy has fallen – whatever the reasons driving this – then this means businesses now have fewer parking spaces and the scheme’s initial aims of reducing commuter car use are being met.
“Therefore, it feels unfair to ask businesses to pay more when they are already playing their role in making Nottingham a cleaner, greener city – particularly at a time when they are being hit by rising costs elsewhere in the form of a national insurance increasing and inflationary pressures that are hiking up prices for energy, raw materials and staffing.
“An increase to the workplace parking levy will either squeeze companies’ margins – affecting their ability to invest, grow and ultimately create jobs and wealthy locally – or be passed on to employees, who will have less money to spend in a still-recovering city centre.
“It’s important to stress that the tram has been a huge success for Nottingham’s broader plans to reinvent itself as a destination where people can live, work and play, and businesses have been both vocally and financially supportive of its development, but they shouldn’t be expected to carry the can whenever extra cash is needed.”
Cllr Kevin Clarke, opposition leader of Nottingham Independent Group, added: “I don’t like it [the levy]. It is tax on work. The council charges the companies but inevitably they have to pass it onto the employees.
“Small companies can’t afford it. I think it is wrong. Companies are getting wise to it and closing their car parking spots off. It is a big bill, and it is going up every year.”
