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Department for Environment, Food & Rural Affairs

The Government's Response to the
Royal Commission on Environmental Pollution's
20th Report

FINANCING THE TRANSPORT SYSTEM

Need for investment

We remain of the view that an enhanced programme of investment over a 10-year period is needed in order to create an environmentally sustainable transport system (8.44).

  1. The White Paper on the future of transport sets out the Government's intention to direct public expenditure on transport towards delivering the New Deal for Transport. Following the Comprehensive Spending Review, which took a strategic view across Government to match spending to the Government's priorities, plans have been announced to revitalise local and public transport. An extra £1.8 billion will be made available for local transport, bus services, road maintenance and railways. In addition, through partnership with the private sector, the Government expects to see the level of privately financed investment in transport increase by at least half over the next three years.
  2. The Government's Economic and Fiscal Strategy sets out the framework for future spending which will allow real current spending to grow in line with the growth in the economy, while enabling the Government to increase capital spending to double the level of net public investment as a share of GDP. Transport infrastructure in particular will benefit from this significant boost to public investment. By abolishing the annual spending round which encouraged short-termism and inefficiency, the Government has introduced a major reform of the public spending rules. Firm spending limits for the next three years will give greater certainty and stability to plan and manage programmes.
  3. The New Deal for Transport sets out more than one way of funding transport, including new sources of finance to relieve the burden on the taxpayer:

Motorway tolling

Any introduction of tolls on motorways ought certainly to be accompanied by measures to avoid or minimise any...undesirable diversion to alternative all-purpose routes, and in particular to protect roads which are especially environmentally sensitive (6.18).

  1. The Government's proposals for legislation to allow road user charging will enable pilot schemes to be developed in a variety of circumstances. Schemes may be developed for example to help to meet transport and environmental objectives in urban or rural areas, or on bottlenecks on specific roads or at certain times of the day or year. Such schemes may also be developed on trunk roads and motorways, either on a self-standing basis or as joint schemes with local authorities.
  2. Pilot charging schemes will be individually developed and designed to take into account the local transport network, ensuring in particular that unacceptable diversion does not take place onto local roads. The Government will also consider for each scheme how best the revenues generated may be used to provide related benefits locally which might otherwise be unaffordable, including better means of securing the environmental acceptability of transport infrastructure.
  3. On most of the motorway and trunk road network, charging schemes will in general be feasible only with full electronic technology. Further studies are required on the electronic units and on administrative support systems before they may be introduced with confidence. In particular, the Government will need to be satisfied that such systems can cope with high volumes of traffic, travelling at motorway speeds in a way that does not produce unacceptably high error rates in charging users.
  4. Technical trials of electronic systems will continue, and further research will be done on their possible effects and how they may be best implemented. The trials will examine such issues as personal privacy, impact on different parts of society, and diversion onto untolled roads.
  5. An early priority will be work to ensure that, as charging projects are introduced in different parts of the country, vehicles do not require more than one set of in-vehicle equipment. The Government will continue to work with the European Commission and EU Member States to ensure that the design of charging systems in Europe is compatible.

Urban road pricing

Charging for the use of roads within specified areas [is] a way of...giving a broad indication that environmental and other social costs are especially high within those areas. It also provides a way of increasing the efficiency with which the road network is used and can serve other purposes as well (6.31).

We endorse the view taken in the Eighteenth Report that the introduction of road pricing should be a matter for local decision. We consider that local authorities should be given the necessary powers at the earliest opportunity. We emphasise that decisions to introduce such schemes should be taken only after a full evaluation of the environmental effects and as an integral part of an integrated transport plan for the area affected (6.36).

However, the technical standards for the design and operation of electronic equipment installed for [road pricing] at the roadside and in vehicles ought to be common across Europe (6.37).

Control of parking

For controls over parking to be fully effective, there will have to be some new form of control over existing private non-residential parking. National legislation for the levying of charges on the owners of parking spaces, perhaps as part of the council tax system, could alleviate fears local authorities might have about their competitive position in relation to neighbouring authorities (6.39).

Use of revenues

Local authorities should be permitted to use the revenue from road pricing and new forms of parking charge as an additional source of spending on transport including improved facilities for cyclists and walkers and improvements to public transport, and restrained from using it for other purposes (7.52).

  1. The Government will introduce legislation as soon as Parliamentary time permits to allow local authorities to charge road users so as to reduce congestion, as part of a package of measures in a local transport plan that would include improving public transport. The use of revenues to benefit transport serving the whole area where charges apply, which in many cases will mean supporting projects in more than one local authority area, will be critical to the success of such schemes.
  2. Carefully designed road user charging schemes should reduce traffic mileage and emissions, bringing significant improvements in air quality, reducing noise and greenhouse gas emissions and relieving congestion. This will benefit pedestrians, cyclists and public transport, including more reliable and quicker bus services and more reliable delivery times for freight. Less congestion also means shorter and more reliable journey times for those who continue to drive.
  3. The Government will consult shortly on the detail of how road user charging schemes will be implemented and operate. It will work with local authorities and other interested organisations on a number of pilot schemes for road user charging, individually approved by the Secretary of State (or by the Scottish Executive or Welsh Assembly, as appropriate). The effects of these schemes will be monitored and used to inform the design of future schemes.
  4. As is stated in the White Paper, the Government considers that new measures are needed to tackle excessive workplace parking provision at existing developments so local authorities can develop comprehensive parking management policies that support their transport and development plans. It will therefore introduce legislation as soon as Parliamentary time permits to enable local authorities to levy a new parking charge on workplace parking. The Government has proposed that owners or occupiers of business premises would apply to the local authority for a licence to allow a certain number of vehicles to be parked on site. The aim is to reduce the amount of parking available as a means of reducing car journeys and increasing use of public transport, walking and cycling. As with road user charging, a vital element in the effectiveness of the policy will be the use made of the proceeds to improve transport choice locally. That expenditure may have to take place in more than one local authority area.
  5. The Government will legislate to enable the parking charge to apply to all types of private non-residential workplace parking. It will consult on the detail of how the charge will be implemented and operate. Decisions on whether there should be any national exemptions (e.g. for emergency vehicles and Orange Badge holders) will be taken after consultation. As with road user charging, the Government will work with local authorities in developing pilot schemes, individually approved by the Secretary of State (or by the Scottish Executive or Welsh Assembly, as appropriate).
  6. The Government believes that whether to implement the workplace parking levy should be a matter for the discretion of local authorities, as with decisions on road user charging. They must decide on the most appropriate package of measures to deliver the objectives set out in their transport and development plans. The Government notes the concern about damaging competition between neighbouring authorities. It envisages that a regional context for the exercise of the new charging powers will be set out in strengthened Regional Planning Guidance, developed by local authorities working together and consulting widely but ultimately subject to the approval of the Secretary of State.
  7. The Government will ensure that charging schemes are designed and implemented in ways which support the vitality of town and city centres and do not result in dispersal of development. Their use as a general revenue raising device will not be permitted. The Government will start with a strong presumption against allowing both new charges to be levied in the same area at the same time. But it will consider proposals where road user charging was applied in one part of an authority's area, and a workplace parking levy in another.
  8. Road user charging and taxation of workplace parking will offer local authorities significant new powers for tackling congestion and pollution in their areas. They will also provide those authorities with significant new sources of revenue for funding improvements, for example in public transport, walking and cycling, thereby supporting the renaissance of the nation's towns and cities. The availability of a revenue stream will also open up the scope for greater involvement of the private sector working in partnership with local authorities. Local people, business and other interests must therefore be actively involved to ensure that proposals attract support.

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Published 23 December 1998
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