Consultation 2023

Introduction

We are proposing to change the prices of parking permits and other parking charges. This would affect parking in controlled parking zones, in on-street parking bays and in Merton car parks. The outcome of this consultation will be reported to the Council’s Cabinet, where a decision will be made on the proposed changes that will then go forward to formal consultation and implementation early next year, 2024.

Background

Merton Council is facing high inflationary pressures on costs since parking charges were last reviewed in January 2020. It is therefore necessary to consider price increases for a range of parking permits, on-street pay and display bays, and car parks, to ensure that we cover the costs of the management and enforcement of parking. Changes are also proposed to the prices charged for visitor parking to facilitate more choice and consistency, borough wide. Finally, it is proposed to introduce a surcharge to the cost of parking permits for petrol vehicles that have high emissions, which also have a detrimental impact to health outcomes for our residents, to encourage motorists to switch to vehicles which contribute less to the impact of the climate emergency.

Merton’s Parking services help deliver the strategic transport policies set out in the Council’s Local Implementation Plan (LIP). The Council sets parking restrictions and charges to manage demand and enable more effective management of kerbside space for residents, businesses, and visitors alike. This is necessary to balance the finite supply of available on-street parking spaces.

Parking management can also influence the amount of traffic attracted to an area, aiming to reduce congestion and improve road safety and air quality. For example, visitor parking charges can be set to ensure there is no price incentive for visitors to choose to use a private vehicle to visit a destination rather than more sustainable and active alternatives, such as public transport, walking and cycling.

To facilitate informed consultation with parking account holders, this summary sets out the justification for the recommended changes to parking charges. The Council aims to fully cover the costs of parking management and enforcement, influence motorists’ transport and parking choices, and ensure that we can manage the provision of on-street parking as part of a modern, efficient and environmentally sustainable transport policy for residents, visitors, and businesses.

Detailed proposals

It is essential that permit income keeps pace with the full cost of managing and enforcing controlled parking zones (CPZs). The council also seeks to ensure that the costs and benefits of controlled parking are clear. Residents have asked for controls to protect parking availability for their own vehicles and deter excessive demand for on-street parking from, for example, commuters. It is essential that CPZs are properly managed and enforced. The Council should aim to recover these costs from those who directly benefit from parking controls, to ensure that a hidden subsidy is not introduced.

Permit prices and on-street charges were last reviewed in January 2020. Since then, permit income from residents and visitors has increasingly failed to match the costs of management and enforcement of CPZs. The income gap is now estimated to have increased by around £500,000 a year Action needs to be taken to close this income gap. This £500k estimate is derived from the 16.8% inflation increase recorded over the period January 2020 to January 2023.

The same pressure of increased costs caused by inflation applies to the management and enforcement of both on-street pay and display bays, and to car parks. It is therefore also proposed that charges should be increased for paid-for parking on- and off-street, to address this issue.

The introduction of a diesel surcharge to the cost of parking permits has contributed to the decision of many motorists to switch to less-polluting vehicles. It is now proposed to extend this approach to high carbon-emission petrol vehicles, to encourage a switch to vehicles which contribute less to the impact of the climate emergency.

Whilst enforcement costs have risen, significant service and efficiency improvements are being delivered. For example, a recent initiative to improve working methods and deploy additional Civil Enforcement Officers has led to the identification of 35% more parking contraventions than in previous years. This provides a higher level of deterrence, leading to less parking contraventions in future and thereby providing additional protection for the parking spaces used by residents and other permit holders, and their visitors.

Summary of proposals

A summary of the proposals is set out below:

• Resident permits currently vary in price from £70 to £150 a year, depending on the location of the CPZ. It is proposed to apply a 16.8% increase to the current annual price of resident parking permits, without altering the price structure agreed in January 2020. Rounding prices to the nearest £5 for clarity, the cost of most resident permits will increase by £15 a year
• It is proposed to apply the same level of inflation to the price of business, teacher/school staff, NHS, Police and Car Club parking permits.
• It is also proposed to increase the price of on-street pay and display bays and most car park charges, to help contribute to meeting increased costs caused by inflation.
• Electric vehicles need to increase their share of the cost of CPZs as their numbers are increasing significantly while the number of diesel and petrol vehicles declines. It is therefore recommended that the Electric Vehicle permit price is increased from £20 to £50, and that the surcharge for second or more vehicles is applied to EVs to help manage high demand for parking spaces.
• The price of annual visitor permits increased significantly in 2020. It is now recommended that the price of these visitor permits is reduced, to support informal carers and reduce the use of scratch-cards.
• It is recommended that charges are introduced for Carer permits to cover administration costs. This is proposed to be set at £30 to cover the costs of permit administration.
• For casual visitors, E-permits and scratch-cards are now offered at a lower price in many parts of the borough than the cost of public transport alternatives. To remove this price incentive to use private vehicles, it is recommended that these visitor charges be harmonised borough-wide with bus and tram fares. We therefore propose a charge of £3.50 for half-day parking and £5 for a full day.
• In order to provide motorists with an incentive to switch to vehicles which have lower carbon emissions, it is proposed to introduce a £150 carbon surcharge to the price of annual parking permits. This would only apply to petrol vehicles which emit more than 226g CO2/km, aligned with the corresponding national Vehicle Excise Duty band. These are generally SUVs and some older petrol vehicles The charge would not apply to diesel vehicles which already pay an associated £150 surcharge.

Inflation

The Council, like most other public authorities, now customarily uses the Consumer Price Index (CPI) to adjust contract prices and charges. Data is published monthly.

CPI annual rate - Office for National Statistics

The Consumer Price Index was at 108.2 in January 2020. In January 2023 the Index had reached 126.4.

Inflation over the three years can therefore be calculated from the formula:

((126.4/108.2) -1.0) x 100% = 16.82%

Focusing on resident permits, the 2022/23 budget planning expectation was that £2.946m permit income would be received to cover the cost of managing and enforcing all the borough’s controlled parking zones. A 16.82% average increase in prices should therefore aim to deliver an estimated additional £500k income from permit sales and visitor charges, to help keep pace with increased management and enforcement costs. This planning assumption has been included in the Council’s budget and we now seek to close this gap.

Impact on permit prices

The basis of the price increases recommended is the application of the inflationary price increase described above to the cost of permits. An increase of 16.8%, rounded to the nearest £5, is proposed for the following permit types:

• Resident permits (see below)
• Business permits (see below)
• Teacher/School staff permits
• NHS permits and Police staff permits
• Car Club permits

No increase is proposed to the diesel surcharge which, at £150, already offers a significant price incentive to switch away from diesel vehicles. The ULEZ expansion and associated scrappage scheme provides a further strong incentive for residents to switch to less-polluting vehicles.

It is not proposed to increase the £900 cost of all-zone trader permits. This is considered sufficiently high to manage demand, particularly in the light of the demanding commercial environment currently faced by local small traders.

Business permits

It is proposed to harmonise the price charged for single-zone business permits in Wimbledon town centre with the charge applied in the rest of the borough. Area-based pricing is less relevant where businesses need to move goods and supplies using the borough’s road network, whatever their store or office location. Businesses in Wimbledon will still meet their full share of the costs of enforcement by paying the increased £770 borough-wide charge. In addition, imposing a higher increase in Wimbledon town centre would remove the price incentive for local businesses to continue to purchase a single-zone business permit rather than securing an all-zone trader permit, risking an increase in non-essential journeys.

Resident permits

Current resident permit prices

Resident permit charges were last reviewed in 2020, having previously been frozen since 2009. The price reform of 2020 introduced a pattern of varied permit prices based on a Public Transport Accessibility Level (PTAL) analysis. CPZs with better public transport links and higher levels of traffic are charged higher prices than other CPZs. See table below:

Only one Tier 2 CPZ, CW5, is currently charged at a £130 rate. The cost of enforcing this CPZ is only slightly higher than for CPZs in the Medium group, and it is considered that a £20 differential is not necessary. It is therefore proposed to reduce the price differential between this CPZ and the Medium duration CPZs from £20 to £10.

Proposed resident permit prices

Applying a 16.8% price increase in all CPZs, rounded to the nearest £5 for clarity, would result in revised resident permit charges as set out in the table below:

In future years, it is proposed that base permit prices (as set out in the table above) should automatically increase in line with CPI inflation on an annual basis, with the next price review scheduled for early 2025 to address cost inflation over the period from January 2023 to January 2025. In subsequent years the annual price review would then just need to cover inflation for the preceding 12-month period.

Treatment of electric vehicles

Electric vehicle (EV) owners are currently charged £20 for their annual parking permit. EVs make up an increasing proportion of the vehicles parked on-street in CPZs – in 2022, 840 EV permits were issued compared to just 157 issued in 2019; The number of EVs has continued to grow during 2023, at the expense of diesel and petrol vehicles. As the number of electric vehicles increases, the proportion of parking management and enforcement costs which need to be covered by permits for these vehicles is also increasing. The current very low charge rate of £20 a year is no longer sustainable, given the need to cover costs. It is therefore proposed to increase the charge to £50, which will ensure that the costs of permit administration are fully covered and that a moderate contribution is also made to other management and enforcement costs.

In the long term, the Council will at some point need to consider further above-inflation increases in the price of EV permits, to compensate for the reduction in permit income as even more residents switch away from diesel and petrol vehicles. The owners of EVs will, in time, need to shoulder a higher share of the full costs of managing and enforcing CPZs. The cost of EV permits will in time need to move closer to the price of permits for petrol vehicles, although the council is committed to ensuring that a price differential in favour of EVs should be maintained. The council wishes to consult on how soon this alignment should take place: in the short-term; within the next five years; or over the course of the next decade.

It is also recommended that we remove the anomaly whereby EVs, and additional vehicles where the first vehicle is an EV, are excluded from the additional vehicle surcharge. The surcharge is there to provide an incentive to reduce demand for limited on-street spaces, and this applies to all vehicles no matter their fuel source. The additional surcharge should be applied to second and subsequent parking permits, where the first or any other vehicles are EVs, with the objective of managing demand for on-street spaces.

Visitor and carer permits

(Summarized in Appendix 2)

In 2020 a £250 surcharge was added to the cost of visitor permits, additional to the cost of the equivalent resident permit. Annual visitor permits, limited to one per household, now cost from £320-£400, depending on the associated CPZ. The surcharge comprises the additional cost of both a third permit (£100) and the diesel surcharge (£150).

Demand for visitor permits fell significantly following this price increase, with a corresponding growth in demand for individual e-permit bookings and scratch-cards.

This price differential now appears to be wider than strictly necessary. Very few households require a second or third diesel vehicle permit, and the imposition of both the diesel and additional vehicle surcharges appears excessive. Consequently, there has been significant growth in demand for scratch-cards and administrative costs have consequently increased.

It is now proposed that the surcharge for the visitor permit is reduced to the equivalent of the diesel surcharge (£150). In almost all CPZs the visitor permit would then cost no more than £285 a year This still prevents any potential abuse of the visitor permit to cover a resident’s own diesel vehicle or additional petrol vehicle. It is hoped that the price reduction will restore demand for visitor permits and reduce excessive demand for scratch-cards. Residents who receive regular informal care visits from friends and family, but who do not require daily care through a formal arrangement, will particularly benefit from this price reduction.

Carer permits

Carer permits are made available to residents who are either Blue Badge holders, or who have high care needs and require daily care visits evidenced by formal professional documentation. At present, there is no charge for a carer permit. It is now proposed that a £30 charge is introduced, to ensure that permit administration costs are covered. This is not considered unreasonable given the utility of the carer permit to residents who need daily care visits.

Visitor parking: scratch-cards and e-permit prices

Individual parking requests for CPZ residents’ visitors, are managed through e-permits and scratch-cards. Prices for half-day or full-day visits to residents are currently charged in accordance with PTAL-led pricing, similar to the pricing pattern applied to resident permits. Depending on the visit location, the charge for visitor parking for a half-day is currently £2 to £3.50. The charge for full-day parking varies from £3 to £5. However, this has led to some anomalies. For example, a visitor journey commencing in a high-traffic area may end in a low-traffic area and be charged less than the equivalent visit undertaken in reverse; yet the additional traffic pressure and environmental costs are the same. The complexity of visitor charges lacks clarity for the motorist and resident. Most important of all, in many areas the parking charge for making a visit by car is less than the equivalent fares for using public transport, a much more sustainable alternative.

It is now proposed instead to link visitor charges explicitly to comparable public transport prices, set by TfL London-wide. This would remove any price incentive for motorists to drive rather than use public transport. Bus and tram fares have been chosen, reflecting the view that most car visits to residential areas are made as a cross-borough journey, rather than solely along the main north-south transport arteries served by more expensive tube and rail services.

It is proposed that the price of a visit of up to a half day be linked to a bus or tram return fare (currently, £3.50) and, for a full day, linked to the capped cost of a day’s journeys (currently, £5.25). It is also proposed that these charges should change automatically when in future TfL changes the prices charged for bus and tram journeys.

This change would reduce the variety of different e-permits and scratch-cards on offer from six down to two, which will help in the control of administrative costs. It is acknowledged that some CPZs will see visitor charges increase more than inflation, however residents in those CPZs will continue to be charged lower prices for their own permits than elsewhere.

Introduction of a carbon surcharge

The London Borough of Merton is committed to responding to the climate emergency, caused by the emissions of greenhouse gases including carbon dioxide (CO2). Motor vehicles contribute significantly to these emissions. Therefore, we need to take all necessary steps to mitigate the climate risk, improve the air we breathe and improve health outcomes for our citizens. To provide an incentive to reduce carbon emissions, it is recommended that a £150 surcharge on the price of annual vehicle permits be imposed on the highest CO₂-emitting petrol vehicles. In the context of the climate emergency, the objective is to persuade motorists to switch vehicles or use more sustainable modes of travel, thereby reducing carbon emissions.

The scheme would be applied to exactly the same types of parking permits as does the existing diesel surcharge, including resident, business and school staff permits.  It is expected that the additional income provided by the surcharge would reduce in time as motorists switch from high carbon-emission vehicles; this has proven to be the case with the diesel surcharge.

The carbon surcharge would only apply to petrol vehicles. Permit holders would not be charged double for both the diesel and CO₂ surcharges – the maximum ‘environmental’ surcharge on a parking permit would therefore remain at £150, equivalent to 41 pence per day.

The cut-off for the surcharge would be the Vehicle Excise Duty band, determined by the manufacturer and the government of at least 226 gCO2/km. Around 3% or 1,644 of permit-holders would be subject to the new charge. High-emission petrol vehicles also contribute proportionately higher levels of air pollution, given their high fuel consumption and subsequent emissions.

On-street pay and display bay charges

The costs of managing and enforcing on-street pay and display bays have also risen with inflation. It is proposed that on-street pay and display charges, should rise at the same time as we increase CPZ permit prices.

On-street charges were last reviewed in 2020. As with permit prices, on-street bay charges are based on the Public Transport Accessibility Level (PTAL) analysis. Areas with better public transport links and higher levels of traffic are charged higher prices than other areas. See table below:

We propose to increase charges leading to the following increases, which preserve the 1:2:3 ratio introduced in 2020. We also seek to support motorists who wish to continue paying with cash. The inflationary increase has therefore been rounded down to the nearest 10p. The proposed charges represent a consistent 13.3% increase borough-wide:

• Tier 3: £1.50 increasing to £1.70, per hour.
• Tier 2: £3.00 increasing to £3.40, per hour.
• Tier 1: £4.50 increasing to £5.10, per hour. 

Off-street (car park) bay charges

It is proposed that off-street car park charges should increase at the same time as on-street charges. It is essential that a price incentive should be preserved, to persuade motorists to park in off-street car parks where possible, rather than increasing the pressure on limited on-street bays. For that reason, it is proposed that car park price increases should be capped below the percentage price increase recommended for on-street bays (13.3%). A cap of 12.5% in the price increase for car park bays is therefore proposed. As with on-street bays, proposed charges have been rounded down to the nearest coin denomination to support motorists who choose to pay by cash. The proposals are exemplified below.

Car park bay charges – summary of proposals

On the grounds of efficiency and cost reduction we also seek to incentivise season ticket sales, and so a 10% cap on season ticket prices is therefore recommended. Season ticket charges vary by area. The proposal for a 10% price increase is set out below:

• Mitcham £300 a year – proposed to increase to £330
• Morden £700 a year – proposed to increase to £770
• Wimbledon (Queens Road car park) £500 a year - proposed to increase to £550

Next steps following consultation

This document provides information to support the current informal consultation. This summary is designed to help inform consultees of the reasons behind the Council’s proposals.

Once consultation closes, we will consider and then formulate a response to public comments received. The proposals will then be referred to the Council’s cabinet for final decision in the light of the consultation exercise. These proposals will be subject to an Equalities Impact Assessment consistent with the Council’s obligations under the Equality Act 2010 and associated Public Sector Equality Duty.

The statutory order-making procedure for implementing the proposed changes will then include a round of synchronised formal consultation on the associated Traffic Management Orders. Once formal consultation is completed, responses will be reviewed, and a final decision taken.

It is intended to complete this exercise before the end of 2023. In some cases where new charges are being introduced for the first time, the changes may be delayed until 2024 to avoid conflict with expected changes to the borough’s parking IT systems.

Financial implications

The proposed increases in parking charges will inevitably have an effect on parking income. This, however, can be difficult to accurately predict where in some cases we are seeking to reduce unnecessary car usage or demand for on-street spaces. It is emphasized that none of the proposed changes in charges will provide additional savings. All of the additional income raised will be utilized to cover the forecast gap in future income compared to expenditure.

It is anticipated that the proposed changes to permit charges set out in this report should be sufficient to deliver the £500k growth in permit income anticipated in budget planning.

It is anticipated that the proposed increases in on-street pay and display charges and off-street (car park) charges would contribute around £545k additional income towards the cost of managing and enforcing parking provision.

It is anticipated that the introduction of a carbon surcharge would raise additional income of £90k a year However, this will be balanced in future years by an equivalent income reduction as vehicle owners switch from diesel vehicles, and high-carbon emission vehicles, which the respected surcharges are intended to achieve.

These are best estimates at this stage, taking into account the changes proposed and the potential beneficial changes in motorists’ choices that we seek to incentivise.

CPZ maps and hours of operation

Appendix 1: Summary of main proposals on permit prices

Appendix 2: Summary – carer and visitor Permits

Appendix 3a: Controlled parking zone resident permit charges - Tier 1

Appendix 3b: Controlled parking zone resident permit charges - Tier 2

Appendix 3c: Controlled parking zone resident permit charges - Tier 3