Earning almost 20,000 crore in revenue, this sum might be mistaken for the income of an entire industry. But, it’s remarkably similar to the annual income generated by councils in the UK through parking fees, with London councils leading the way in terms of profit.
With fewer people traveling since the pandemic began, many local authorities have struggled to balance their need to preserve parking revenues with the desire to encourage people back into high streets and support small businesses. As a result, some have even temporarily reduced – or in some cases abandoned – their charging structures to attract shoppers and fill empty car parks.
But, while such gestures may be popular with motorists, they can also prove problematic for councils to manage long term. Combined with the recent fall in household incomes and pressures on public services, the situation has strained many local authorities’ finances.
This is particularly true of councils relying heavily on parking revenue to cover operating costs. According to the AA, council profits from parking activities are just over six percent of council tax revenue. And, in some of the UK’s biggest cities, profits are even higher.
Westminster, for example, is the clear leader among London boroughs, banking in a staggering PS74.4 million from the practice. In contrast, Bexley – facing a financial crisis as it struggles to bridge a multi-million-pound deficit – takes just PS7 million from the booming business of parking charges.
The AA has warned that the amount of money being raked in by councils through parking charges is creating a ‘stealth tax’ on drivers, who are forced to pay for their car use while also grappling with inflation-busting fuel prices and struggling to afford other essentials. The association says that the high cost of parking is also sapping consumer spending and taking people away from high street shopping.
As a result, the AA is pushing for councils to be more transparent about managing their parking systems, with more information on charges, availability, and fines. It is also seeking a more formal system of self-regulation for the private parking sector, which would include a new certification scheme independently assessed by the United Kingdom Accreditation Service (UKAS). This could allow the industry to self-regulate, ensuring that operators provide the best possible service for their customers while maintaining consistent standards nationwide. The government has responded to the AA’s concerns, confirming that it will publish an impact assessment before the summer recess and consult on options for future policy. In the meantime, more than 40 councils surveyed by cashless parking provider RingGo said they were planning to introduce dynamic pricing based on vehicle type and occupancy, with Bradford, Walsall, and North Tees already doing so. This could help reduce congestion pollution and improve air quality while encouraging drivers to choose low-emissions vehicles.
