Road pricing: Background

Economic growth, falling motoring costs and the convenience of the private car mean that motoring will continue to be Britain's transport of choice for many of the trips we need to make. But if road traffic levels continue to rise in our urban areas and on our national road network, traffic congestion will become an increasing problem.

Charging people directly for their use of roads (known as road pricing, road user charging or congestion charging) is just one of a number of tools that could help address this problem, alongside other measures such as better traffic management, improving the road network, enhancements to local public transport services, extension of bus lanes, investment into long distance rail, and encouragement of travel plans for schools and workplaces.

Because the causes of congestion vary from place to place, different combinations of measures need to be devised in order to address specific local circumstances.

In July 2003, the Secretary of State for Transport published 'Managing our Roads', which discussed the pressures on the network and the choices to be made in addressing them, including the issues around implementing road charging. At the same time, he commissioned a study to look into the feasibility of implementing a national road pricing scheme.

Road pricing feasibility study

The study was overseen by a steering group of stakeholders and experts. It met between September 2003 and July 2004. The study found that a national road pricing scheme could be feasible within 10 -15 years, and could reduce urban congestion by nearly half, despite traffic only reducing by 4 per cent. It also has the potential to deliver significant environmental benefits in terms of air quality, noise and impacts on communities. The study reports on a wide range of other issues including public acceptability, privacy and technology.

To address whether and how road pricing might work, the study report assesses, in turn:

the feasibility in terms of the degree of public acceptance pricing might have, and the determinants of public opinion (Chapter 2)
the 'why?' - the wider transport context, the trends in traffic and congestion that are forecast without pricing, and the drivers of congestion in terms of the travel choices people make (Chapter 3)
the 'how?' - the technological practicalities of applying road pricing, based on an assessment of the way technology is developing, how pricing might work, and the modelled impact it might have, and identifies the factors that would need to be taken into account in scheme design (Chapter 4)
the 'who and what?' - who would need to do what, the different roles for central and local government. Who exactly would decide to implement a scheme, set the charges and spend the revenues (Chapter 5)
the 'when?' - how soon might it be possible to establish a national scheme and what might be done in advance of that (Chapter 6)
and then sets out the conclusions of the study and possible next steps if road pricing is to be taken forward (Chapter 7).

Feasibility Study Report

Breaking the logjam. Consultation paper

Research into congestion

Smeed Report 1964

Existing legal basis for charging

The Government provided the Mayor and London authorities with the opportunity to introduce congestion charging as part of the Greater London Authority (GLA) Act 1999 (the legislation which provided for the establishment of the office of the Mayor of London, the Greater London Authority and Transport for London).

The Transport Act 2000 made similar permissive powers available to local authorities outside of London, to introduce road user charging or workplace parking schemes, subject to approval of such schemes by the Secretary of State for Transport. Existing schemes are described below.

In Scotland, the Transport (Scotland) Act 2001 gives Scottish local authorities the power to introduce road user charging (but not workplace parking levy) schemes subject to the approval of the Scottish executive.

In Wales, where the Welsh Assembly has powers equivalent to the Secretary of State for Transport in England, there are no authorities developing congestion charging schemes at present.

Transport Act 2000
(http://www.hmso.gov.uk/acts/acts2000/20000038.htm)

Transport (Scotland) Act 2001
(http://www.scotland-legislation.hmso.gov.uk/legislation/scotland/acts2001/20010002.htm)

Welsh Assembly
(www.wales.gov.uk)

Scottish Executive
(www.scotland.gov.uk)

City of Edinburgh Council
(www.edinburgh.gov.uk)

Current schemes

Only three schemes, of contrasting scale, are currently operating in the UK:

London congestion charging scheme

In March 2000, the Government Office for London published a report entitled "Road Charging Options for London: A Technical Assessment". This report was intended to assist the understanding of the contribution that road user charging and workplace parking levies could make to the Mayor's initial Transport Strategy. It examines the sort of schemes that might be developed or introduced in the Mayor's first term. The report was prepared by an independent working group of transport professionals assisted by studies from a team of consultants under contract to the Government Office for London.

Ken Livingstone, who was elected London Mayor in May 2000, introduced a congestion charging scheme in central London on February 17th 2003. The scheme is run by Transport for London (TfL), the public body responsible for managing transport in London. The entire scheme, including definition of the boundaries, technology and enforcement is the responsibility of the Mayor and TfL. The GLA Act requires that the net revenues of the scheme must be invested in transport projects in London.

The London Congestion Charge covers the heart of central London, an area of around eight square miles. Drivers in the designated congestion charging zone between 7am and 6.30pm, Monday to Friday must currently pay a charge of £5 (rising to £8 on July 4th 2005). Residents within the designated congestion charging zone receive a 90% discount. The Mayor determines exemptions from the scheme, which currently includes buses, licensed taxis and mini-cabs, emergency services vehicles, certain military vehicles, certain NHS vehicles, certain alternatively fuelled vehicles, bicycles and powered two-wheelers. Members of Parliament and Government ministers are not exempt.

The Mayor has recently consulted on the principle of an extension to the congestion charge zone. For further details of the London Congestion Charge, Transport for London or the Greater London Authority Act please click on the links below:

Rocol report
[http://www.gos.gov.uk/gol/transport/161558/228862/228869/?view=Standard]

Transport for London
[http://www.tfl.gov.uk/tfl/cclondon/cc_intro.shtml]

Greater London Authority Act 1999
[http://www.hmso.gov.uk/acts/acts1999/19990029.htm]

Primary legislation on road user charging and workplace parking levy
[http://www.hmso.gov.uk/acts/acts2000/00038--z.htm#163]

Consolidated version of Schedules 23 and 24 of the Greater London Authority Act 1999
(as amended by the Transport Act 2000)
[http://www.gos.gov.uk/gol/docs/204399/consolidated_schedules_23_24.pdf]

Durham

Outside of London, only one authority - Durham - has introduced a congestion charging scheme. This scheme commenced in October 2002, and was established to manage the traffic flow through the city's medieval streets approaching the Cathedral, Castle and University - a World Heritage site. It applies only to a single road, which provides vehicle access to the historic city centre.

For further information on the Durham scheme, please click on the link below.

Durham County Council
(http://www.durham.gov.uk/durhamcc/usp.nsf/pws/Roads+-+Road+User+Charge+Saddler+Street+Market+Place+Durham)

Dartford River Crossing

In April 1987 Dartford River Crossing Ltd (DRC) signed a concession agreement to take over the operation of two Dartford Tunnels (including taking on debts accrued by Kent and Essex County Councils in the construction of the tunnels) and to build a new bridge (the Queen Elizabeth II Bridge). The term of the concession agreement was to last 20 years or until all debts had been repaid, whichever was the earliest. The legislation and the concession agreement allowed for DRC to charge tolls to refund the DRC's aggregate costs in building the Queen Elizabeth II Bridge and operating and maintaining the bridge and the two tunnels. At the end of the concession the Crossing would transfer back to the Secretary of State for Transport.

The debt was repaid within 14 years and the Crossing was formally transferred back to the Secretary of State on 1 April 2002. Since that date and until 31 March 2003, DRC operated the Crossing as managing agents of the Secretary of State.

On 1 April 2003 new managing agents, Le Crossing Company Ltd, were appointed after a competitive tender exercise.

With the discharging of debt, the powers to charge a toll at the Crossing expired on 31 March 2003. However, prior to the expiry of these powers, the Government commissioned consultants to investigate the effect that removing charging at the crossing would have on traffic levels. This research, published in August 2001, suggested that use of the Crossing would grow more rapidly if there were no charge to use the Crossing, which could have an adverse impact on the local community and users of the Crossing. The increased use at the Crossing could result in longer journey times and discomfort for users while also possibly adding to air pollution. These factors could have a detrimental effect on health, the economy and the environment.

As such, in summer 2001 the Highways Agency carried out a public consultation on the proposal to introduce a charging scheme under the Transport Act 2000 (the 2000 Act) at the Dartford Crossing. The consultation included seeking views on the proposed charging structure. Following this consultation it was decided to implement the charging scheme. The charging scheme came into force on 1 April 2003.

The 2000 Act requires that the net income generated by the charging scheme be spent on transport policies for a minimum of 10 years.

Dartford River Crossing
(http://www.dartfordrivercrossing.co.uk/)

Schemes around the world

The need for traffic control has led to road pricing schemes being implemented in various forms around the world since the 1970s. They have become a significant component in achieving sustainable and integrated transport strategies.

Other charging schemes

Workplace parking levy

The availability of convenient, free or relatively cheap parking provided by employers encourages car use, particularly commuting, even when alternative modes are available. The Transport Act 2000 therefore made provision for local authorities to implement workplace parking levies. Nottingham City Council is considering such a scheme.

Nottingham Workplace Parking Levy [http://www.nottinghamcity.gov.uk/sitemap/cdt_workplace_parking_levy]

Lorry Road User Charging

In his 2002 Budget speech, the Chancellor of the Exchequer announced that the Government would modernise the taxation of the haulage industry to deliver its Manifesto commitment to make sure that all hauliers pay towards the costs that they impose in the UK. To that end, the Government is preparing to introduce a Lorry Road User Charge scheme in 2007/08.

The scheme is being developed, and will be implemented, by HM Customs and Excise.

The intention is that the charge payable under the scheme may vary according to lorry size, road type and possibly time of day. Because UK hauliers already pay towards the costs they impose in the UK (through fuel and vehicle excise duties), the Government will introduce offsetting tax cuts through a reduction in hauliers' fuel duty at the same time as introducing the charge.

HM Customs and Excise launched its procurement process by issuing a pre-qualification questionnaire on 12 May 2004. Further details may be found at the HM Customs and Excise web site at:

HM Customs and Excise
[http://www.hmce.gov.uk/business/othertaxes/lruc.htm]

Tolled roads, bridges and tunnels

Tolled bridges, tunnels and roads in England fall into the following categories:

Non-statutory tolled undertakings - a number of private ancient bridges and roads that charge tolls for the right to cross private land. The owners/operators set their own tolls and are not regulated in any way (examples are College Road in Dulwich, the Batheaston Bridge nr. Bath and Roydon Road in Stanstead Abbots).

Privately owned statutory tolled undertakings - eight small ancient bridges built and tolled under Private Acts of Parliament, (some going back to the 18^th Century (examples are the Clifton Suspension Bridge in Bristol, the Aldwark Bridge in Yorkshire and the Dunham Bridge in Lincolnshire). Although these undertakings are all on the public highway they are either privately owned or operated by a private trust. They can only charge tolls that meet the costs of operating the undertaking (some undertakings are allowed to make a reasonable return upon investment). An application has to be made to the Secretary of State for Transport to revise toll charges at these undertakings; a process that can include an independent public inquiry.

Local authority statutory tolled undertakings - five larger local authority crossings of river estuaries promoted since the 1920s (consisting of the Humber, Itchen and Tamar Bridges and the Mersey and Tyne Tunnels). Except for the Itchen Bridge (where the tolls are effectively a congestion charge) and the Mersey Tunnels (where increases in line with the retail price index are concerned) the undertakings have to apply to the Secretary of State for Transport to revise their tolls (again a process that can include an independent public inquiry). They can only charge tolls that meet the costs of building and operating the undertaking (at the Mersey Tunnels some toll revenue can be used for other transport projects).

Central Government promoted tolled undertakings - currently this group* consists of the Severn Bridges and the M6 Toll Road. These are large undertakings that have been designed, built, financed and are being operated by private consortiums under concession let by central government. The legislation and the concession agreements at these undertakings allow for the Concessionaire to charge tolls for a set period of time to refund the aggregate costs of the Concessionaire (in building the undertaking, operating and maintaining the undertaking (and in the case of the Severn the previously existing crossing), and financing original debt, works and ongoing operations. The concession ends when the aggregate costs of the Concessionaire are met, at which time ownership of the undertaking will pass fully to central government.

*NB - The Dartford Crossing formerly belonged to this group but the power to charge a toll ended on 31 March 2003 with the successful completion of the concession period. A road user charging scheme under the provisions of the Transport Act 2000 was introduced on 1 April 2003 to manage traffic at the crossing.

Other tolled undertakings in the UK

Undertakings in Scotland and Wales fall within the jurisdiction of the respective devolved administrations, for further information:

http://www.scotland.gov.uk/Topics/Transport/Road/Introduction
http://new.wales.gov.uk/topics/transport/?lang=en

Access for Disabled People

Information about toll concessions for disabled people at road bridges and tunnels http://www.dft.gov.uk/transportforyou/access/car/mavis/mavisinfo/contact/7tollconcessionsatroadbridge6055

For further information about any of the above please email: road.charging@dft.gsi.gov.uk