Are you surprised by this headline? I certainly am.
In 2017/18, Shropshire Council took nearly £640,000 from Ludlow’s car parks and on-street parking machines. That’s three per cent down on the year before, probably due to bad weather over the winter. The ‘profit’ after operating costs was £373,000. Most of the profit is spent on subsidising buses. And, in what may come as a surprise to many people, those hated yellow screen stickers lose money. A loss of around £10 a ticket across Shropshire.
Income and running costs
First let’s look at the overall figures. In 2017/18, parking charges and permits raised £465,022 from our three Shropshire Council car parks – Upper Galdeford, Smithfield and Castle Street. On street parking charges and permits in the town centre raised £174,885. That’s a total income of £639,906.
The costs of running Ludlow’s car parks (excluding on-street parking) is £92,302. Here is the breakdown of costs.
Off-street parking operating costs 2017/18
As I noted in the introduction to this article, car park income fell last year compared to the year before. This was not a large fall, under £22,000. It is probably no more than a blip due to the snow events over the winter of 2017/2018. Nevertheless, we must watch income closely because it is an indicator of the health of our town centre.
Where does the money go?
In 2016/17, the Shropshire parking account (on-street and off-street combined) generated a net surplus of £2,497,390. This is a healthy income. Under Section 55 of the Road Traffic Regulation Act 1984 this must be spent on highways and transport. Most of the surplus, £2,174,139, was used to subsidise buses (87%). The balance, £323,251, was spent on maintaining highways infrastructure and associated environment. In Ludlow, just £14,059 was spent on maintaining car parks and more than half of that on repairing parking machines, not the failing infrastructure.
The bad news is that Shropshire Council has cut highways budgets by £5 million this year and will apply a second £5 million cut next year to pay for the costs of adult social care. Bus budgets are also due to be reviewed in 2020. It could be that car park income will be the only money left for public transport.
Another cost is enforcement. The yellow notices slapped on vehicles around the county more than 40 times a day raise income but also lose money for the council.
In 2016/17, the council issued 15,404 penalty charge notices (PCNs) across the county. More than half of these were for parking in restricted streets, loading bays, disabled bays and other restricted areas. A quarter were for staying longer than permitted and the rest for not displaying a ticket. It is notable that in Ludlow, the proportion of PCNs issued for parking in restricted zones is much higher than the county overall.
Penalty Charge Notices – Shropshire and Ludlow
Not all PCNs gain income for the council. Only threequarters are eventually paid (74%). More than 2,300 PCNs are cancelled after a successful informal or formal challenge (15%). A further 1,600 PCNs were written off (10%). This was mostly due to the difficulty in tracing owners and errors DVLA records and paperwork. Intriguingly, seven PCNs were written off following a “corporate decision”. I guess the reasons for those cancellations will remain a mystery but it sounds like an order from a boss. I hope not.
Is it normal to collect just 74% of issued PCNs? I am not sure. Herefordshire’s summary accounts are online. It received payment on 74% of PCNs, the same as Shropshire. It cancelled 18% of its 24,400 penalty charge notices in 2017/18, some way lower than Shropshire Council’s 26% cancellations.
Parking enforcement is often viewed as a cash cow. But in Shropshire, it loses money. At around £10 a ticket.
The income from penalty charge notices in 2016/17 was £480,784. But the cost of enforcement, slapping on those yellow tickets and warning people, was £635,311. The £155,000 loss equates to £10.03 loss a ticket.
It also means that highways and transport are deprived of around £155,000 a year because the enforcement service is not being run on a break-even budget.
I am puzzled by this and wonder how many other councils lose money on enforcement. I suspect it is very few. It is money we can ill afford to lose in straightened times for Shropshire Council’s budget.
I will be seeking more up to date figures for enforcement and parking in Shropshire in coming weeks. I’ll also be asking questions about why we are losing £10 a yellow ticket. There cannot be case for more tickets given that one quarter are cancelled. We need to scrutinise the costs in detail.
. I am grateful to Ludlow Town Councillor Jim Smithers for digging out the latest data.
. I have excluded charges for depreciation of the car parks as council owned assets.
. Section 55 of the Road Traffic Regulation Act 1984 limits the uses to which income from parking charges can be put. The law was clarified in a high court case between Attfield and Barnet Council. Building on this case, auditors Grant Thornton told North Dorset Council in May 2015 that it could not proceed with its policy of increasing car parking charges to fund general services. The auditors said: “The RTRA does not give councils the power to raise money from off-street parking charges for use on general services and therefore it is not lawful for councils to seek to raise a surplus from off-street parking charges to fund other services.” Section 55 says that the council should use the money for improving off-street parking. But if that is “unnecessary or undesirable” the money can be used for public transport or highways and environmental improvements. Environmental improvements allowed under S55 include: reducing environmental pollution; improving or maintaining the appearance or amenity of a road, land near a road, or open land or water to which the public has access; the provision of outdoor recreational facilities available to the public without charge. Those wishing to explore this topic further will find these briefings useful: Parking policy in England; Operational guidance to local authorities: parking policy and enforcement.
. The two pie charts are for different time periods. The chart for Shropshire is 2016/17. That for Ludlow is the first eight months of 2017.