On-street parking 'tax' 16 Aug 2010

Councils using parking fees as “back door” taxation

RAC Foundation Press Release – embargo: 00:01 hrs Monday 16th August 2010

Cash-strapped councils are being tempted to break the law by setting parking charges to raise money to run other services.

In a report for the RAC Foundation, barrister Dr Chris Elliott said:

“It appears parking charges and penalties are being treated as ‘back door’ taxation by local authorities. The amount that can be raised is so great – in some cases comparable to the amount raised by Council Tax – that it creates a ‘moral hazard’ by empting authorities to treat it as a source of income.”

Dr Elliott said the law clearly stated that on-street parking fees and penalty charges can only be set with the intention of “relieving or preventing congestion of traffic” and covering the cost of administering the schemes.

Strict rules state that any surplus, with only minor exceptions, must be spent on contributing to the cost of off-street parking, public transport, road improvements and environmental improvements.

Councils should not set out to raise money for these or any other purpose.

Dr Elliott found several instances where public statements by local authorities were at best ambiguous about the purpose of parking charges. His review of the law comes at the same time as the Sunday Telegraph revealed “at least 150 councils have brought in new parking charges this year or are considering such a move.”

Professor Stephen Glaister, director of the RAC Foundation, said:

“Motorists have always been suspicious that councils regard them as mere cash cows. The evidence now suggests that in some cases they are dead right.”

“With big budget cuts on the horizon, the temptation amongst councils will be to load steeper charges on drivers parking their cars. But they must resist the temptation or else they will be breaking the law and leaving themselves open to legal challenge.”

ENDS

Contact: Philip Gomm – Head of External Communications – RAC Foundation

Philip.gomm@racfoundation.org / 020 7747 3486 / 07711 776448

Notes to editors:

The RAC Foundation is a charity which explores the economic, mobility, safety and environmental issues relating to roads and responsible road users. Independent and authoritative research, carried out for the public benefit, is central to the Foundation’s activities.

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