World review of road pricing: Phase 2 - final report

4. Benchmarking road pricing progress in the UK to the rest of the world

4.1 Why compare the UK to the rest of the world

4.1.1 The UK would appear to be at the forefront of the continuing evolution and development of Road Pricing. At the same time this review has demonstrated Road Pricing is evolving rapidly and is now being considered as a potential Travel Demand Management (TDM) tool in many other towns, cities and countries across the world.

4.1.2 The Department for Transport (DfT) has committed heavily in terms of developing and funding research into Road Pricing in the UK both on a local and national level through projects such as DIRECTS, the former Charging Development Partnership and most recently the Transport Innovation Fund (TIF). Research and development, albeit on a smaller scale in most cases, is being carried out in many other worldwide locations.

4.1.3 Whilst worldwide levels of research activity and policy development of Road Pricing have notably increased this does not necessarily mean we will see a similar growth pattern in operational schemes in the next 5 -10 years. Through this study CfIT is seeking to understand where the Government's thinking on Road Pricing stands in relation to these worldwide locations, specifically in the development and implementation of charging in the UK. By gaining a better understanding of the key drivers behind Road Pricing development CfIT can advise of changes necessary to increase the chances of successfully delivering live schemes.

4.1.4 The remainder of this report combines the findings from the Phase 1 and Phase 2 reviews to highlight where it would appear the UK stands in terms of key issues for developing and implementing Road Pricing.

4.2 Degree of interest in road pricing

4.2.1 The identification of locations where some form of Road Pricing scheme has recently or is currently being considered is unsurprisingly large. Although it is difficult to gauge, it would appear that a very much larger range of towns and cities now have Road Pricing on the agenda as a tool for addressing transport issues than even a few years ago. Moreover, the range of locations includes towns and cities in nearly every continent and of different sizes of urban area.

4.2.2 In the context of the UK, this growth in interest in Road Pricing is also evident with a far wider range of locations and sizes of urban areas now considering the role that Road Pricing could play in addressing transport problems and issues.

4.3 Current status of emerging schemes

4.3.1 On the basis of the evidence gathered for this review, there are no new emerging schemes which are expected to be implemented imminently anywhere in the world.

Firm implementation plans are limited to changes to those schemes already identified in the Phase 1 review as operational plus, potentially, a trial scheme, as follows:

• London, with the western extension to the current Central London Charging scheme due to become operational in February 2007;
• Stockholm - which at the time of the Phase 1 review was being trialled and the subject of a referendum - and now at the time of writing a verbal commitment to the continued operation of the scheme has been made by the Swedish Prime Minister though this remains to be formally ratified. It is currently considered likely that the scheme will re-start in 2007; and
• Milan - where it has recently been announced that a trial scheme focused on the city centre is to be introduced in early 2007, though full details are limited.

4.3.2 Schemes identified in other locations would all appear to be some way off implementation with their status ranging from very outline concept - the vast majority of emerging schemes identified - through to a broadly defined implementation plan even though, in some instances, aspirational implementation timescales seem bold. Additionally, none of the emerging proposals appear to have the necessary legislative frameworks in place to enable them to be implemented imminently.

4.3.3 There is therefore a substantial gap between the status of existing operational Road Pricing schemes and the sizeable pack of emerging schemes.

4.3.4 This gap is evident in the development of Road Pricing schemes in the UK . As discussed further below, the UK is more advanced in having developed legislative and policy frameworks than other locations, but local schemes being developed under TIF are currently only at an outline planning stage.

4.3.5 As noted in the Phase 1 review, the presence of existing schemes is important in demonstrating the case for and improving acceptance of Road Pricing and thereby improves the prospects of other schemes being implemented. However, while the UK has clear advantages over many other locations in developing Road Pricing schemes because of the experience of schemes operating in London and Durham and the emergence of TIF, there is no evidence to suggest that the UK is forging ahead in delivering new Road Pricing schemes compared with the rest of the world. Equally, there is no evidence to suggest that other countries and locations are themselves forging ahead with Road Pricing at a pace faster than that in the UK.

4.3.6 The only possible exception to this is the Netherlands which is at a much more advanced level in progressing national Road Pricing than the UK. An Implementation Plan has been published which outlines a two stage plan, with a national scheme that could possibly be in place around 2012. There is, though, no firm commitment to implement the scheme. It is also noted that the scale of a national scheme in the Netherlands is very much smaller than that for a national scheme covering the UK. Additionally, it would appear that the planning of the national Road Pricing scheme in the Netherlands has suppressed the development of local schemes - such as those that at one stage were being considered in Rotterdam and The Hague.

4.3.7 Of the remaining case studies there are only five cities with emerging schemes that have been identified as having declared planned implementation timescales, as follows:

• Prague - 2010;
• Shanghai - 2008-2010;
• Auckland 2015-2020;
• Cardiff - 2010; and
• Copenhagen - 2009.

4.3.8 However, as the more detailed case study descriptions show none of these locations actually have firm commitments to introducing Road Pricing.

4.3.9 Currently, with the exception of the western extension of the London scheme, no emerging schemes in England have committed to an expected implementation date, though it is anticipated that schemes delivered through the Congestion TIF process would be in place by 2012.

4.4 Policy framework

4.4.1 The research has shown that the policies that frame the development and implementation of Road Pricing schemes in different countries are structured in very different ways. Clearly this is influenced by the institutional and policy frameworks that exist in different locations, with different balances of national, regional and local powers and responsibilities. Comparing the policy frameworks in detail reflects the institutional arrangements in the countries concerned.

4.4.2 However, the evidence from the case studies does show that the majority of the emerging Road Pricing schemes are framed by a local policy rather than a national policy. There are cases where more than one location within a country is considering Road Pricing, for example as in the USA and Italy, although there is no current national policy framework for Road Pricing.

4.4.3 Within the UK, a national policy framework does exist to promote the development and eventual implementation of local Road Pricing schemes. Moreover, the national framework is, to an extent, then embedded within regional and local policies and plans to explore and develop Road Pricing schemes. This can be contrasted with the majority of the emerging world Road Pricing schemes that are framed by local and/or regional policy but not national policy.

4.4.4 Again, the exception to this broad conclusion is the Netherlands, where the policy framework for a national scheme is set at a national level. In the UK, it is noted that there is no clear policy commitment to implement a national scheme.

4.4.5 Across the case studies it is reasonable to conclude that the English national policy framework to develop and implement Road Pricing schemes at a local level in a way that addresses issues of interoperability between locations is unique.

4.4.6 However, the policy frameworks identified in the case studies do not appear to imply a commitment to proceed with Road Pricing schemes, merely an intention to consider schemes. The exception to this is the two schemes identified in Phase 1, London and Stockholm. London is committed to the western extension. As noted above, subsequent to the referendum on the Stockholm scheme, a commitment in principle to the continued operation of the scheme has been made. In the context of local and national Road Pricing schemes in the UK there is also no expressed commitment to proceed. Overall, this position appears to reflect the need for Road Pricing schemes to demonstrate that they can meet key criteria and deliver on objectives before any firm commitment is given. Since all bar the London and Stockholm schemes are still at the planning stage this lack of firm commitment is not, therefore, surprising.

4.4.7 It is, however, apparent from all the case studies for locations that are advancing local Road Pricing schemes that, in general, responsibility for planning and - subject in most cases to suitable enabling legislation - delivery of the scheme lies with a single authority. Contrasting this with emerging schemes in England suggests that many of the schemes that may emerge from authorities granted TIF pump-priming funding will need to cover multiple planning authorities. Schemes that require collaboration from a number of adjacent local authorities would seem - not surprisingly - harder to deliver. This is the case in locations like Seattle and Helsinki and could also prove to be a barrier in some parts of England, such as the West Midlands or Greater Manchester.

4.4.8 There is also a wider issue in terms of control and deliverability of complementary public transport measures that may be critical to the acceptability and implementation of Road Pricing. Most of the other authorities in locations worldwide that are considering Road Pricing schemes have more direct control and influence over their public transport systems than do the authorities currently progressing local Road Pricing schemes in England - excluding London.

4.4.9 In terms of interoperability the UK is in a strong position by developing a framework for local schemes in England to operate under. This is intended to enhance usability and interoperability and act as precursors to a national scheme. Norway is the only other location that has operated a number of local schemes in a similar way.

4.4.10 Funding for developing and planning schemes is important in many of the locations examined. The DfT is providing substantial funding towards developing local schemes in England through TIF and this must be seen as a major positive in moving towards scheme implementation.

4.5 Legislative framework

4.5.1 In all the emerging schemes examined, new legislative powers are still required in order to implement Road Pricing schemes. The extent and nature of legislation varies and, within the context of the research exercise, it has not been possible to examine the nature of the powers that would be required in any detail.

4.5.2 Even the Netherlands national scheme - which in planning terms appears one of the more advanced of the schemes considered - still requires legislation to enable it to be implemented.

4.5.3 In the UK, implementation of a national scheme would still require new legislation. However, in the UK the Transport Act 2000 does provide local authorities with the necessary powers to implement Road Pricing schemes - though subject to Secretary of State approval and with limits of the time horizons that authorities have in retaining scheme revenues. In this respect the ability to implement emerging local Road Pricing schemes in England is substantially greater than in other locations worldwide.

4.6 Objectives of road pricing

4.6.1 The evidence from the case studies shows that most of the emerging Road Pricing schemes have multiple objectives.

4.6.2 Unsurprisingly tackling congestion is a primary objective in all but one of the cases (Rome). The majority of the emerging schemes also explicitly define objectives to tackle problems of poor local air quality and address climate change. A smaller set also state as an objective the need to sustain their economies and improve the urban environment.

4.6.3 Eight of the case study locations also explicitly identify using Road Pricing to raise funds to reinvest in transport. This includes Stockholm, for example, where the revenue raised by Road Pricing has been linked to the implementation of a highway scheme.

4.6.4 Only two of the case studies have evidence that one of their objectives is to use Road Pricing revenues to modify the current means of road use taxation, the Seattle local scheme and the Netherlands national scheme.

4.6.5 In contrast, Road Pricing in the UK has the very clear primary objective of tackling congestion. The DfT's January 2006 TIF guidance to local authorities, states that TIF is focused on directing resources towards the achievement of two very high priority key objectives: tackling congestion and improving productivity. The Congestion TIF schemes that are being pursued by a number of local authorities are clearly focused on achieving the demand management objectives to tackle congestion that were set out in the Government's 2004 Future of Transport White Paper.

4.6.6 While congestion clearly does impact on emissions and the economy this very exclusive focus on reducing congestion as the primary objective does make the approach to local Road Pricing schemes in the UK (outside London) stand out from the emerging schemes elsewhere in the world.

4.6.7 While there is recognition that Road Pricing schemes can raise revenue to reinvest in the transport system there is, in the UK, no explicit recognition of this as an objective of introducing Road Pricing. This differs from a number of locations - such as Cardiff, Prague, Stockholm and Auckland - which explicitly identify raising revenue as an objective. Trondheim in the Phase 1 review provides an example of a completely different objective linked to raising revenue to fund specific infrastructure projects. As work now progresses on full implementation of the Stockholm scheme it appears that a similar link may be made, perhaps to increase the support for the scheme in the areas surrounding the city.

4.6.8 However, one of the findings from Phase 1 was that the focus of schemes on a single, clear objective was important in gaining public acceptability - for example as in the case of the London scheme. Phase 2 of the review does raise the possibility that a more balanced approach may be to recognise that Road Pricing can serve a number of objectives, although this may risk confusing the public and hampering scheme acceptance.

4.7 Revenue from charging

4.7.1 Given that most of the emerging schemes are at an early stage of development it is clear that details of how revenues derived from Road Pricing might be used are not firm at this stage.

4.7.2 However, it is clear that none of the emerging local Road Pricing schemes are expecting to be revenue or fiscally neutral. All schemes expect to generate net revenues from charging.

4.7.3 There is evidence that the Netherlands national scheme would seek to modify the taxation regime to shift the basis of charging for road use from car ownership to car use. In the UK, the DfT's 2004 Feasibility Study of Road Pricing in the UK does acknowledge that one option for a national scheme is to have a system with some form of revenue neutrality that does not gain additional revenue from drivers but return revenues in the form of reductions in fuel duty or vehicle excise duty. The evidence from the review is that this is not an option being considered other than in the Netherlands. However, the Netherlands scheme would still expect to raise revenues for reinvestment in transport so would not be revenue neutral.

4.7.4 Across the emerging Road Pricing schemes the vast majority of the case studies plan to use net revenues from charging to improve local transport in the urban area within which the Road Pricing scheme would operate. Again, the details of how such revenues would be used are not well developed in most instances. Certain locations do propose to utilise revenues to fund specific infrastructure projects.

4.7.5 The emerging Road Pricing schemes in England are considered to be very similar. Although the DfT's TIF guidance is not explicit on the use of net revenues there appears to be a working assumption that the Road Pricing schemes will raise net revenues to reinvest in the local transport systems which will include substantial infrastructure projects. However, it is clear that the emerging Road Pricing schemes in England are, too, at a very early stage of establishing details of how revenue will be used. Based on the evidence of London and various attitudinal surveys on the acceptability of Road Pricing, establishing the link between Road Pricing revenues and transport investment is key to gaining support for schemes.

4.8 Type of scheme

4.8.1 Given that the vast majority of the emerging Road Pricing schemes are, as discussed above, at an early stage of planning, is not surprising that there are few firm commitments to scheme type in terms of charging area, charging period and technology. Nevertheless, the concepts being considered, and certain scheme design parameters being discussed, do provide a useful benchmark against which to assess scheme development in the UK.

4.8.2 First, as already noted, only one of the emerging schemes - that in the Netherlands - is national. The remainder are all local schemes which are driven from a bottom-up local level outside any form of national Road Pricing framework. In the UK, it is reasonable to conclude that local schemes are focused on local transport issues but framed by national policy and funding.

4.8.3 There is no definitive scheme type yet established for the Netherlands national Road Pricing scheme though the expectation is that it will comprise a distance-based charge using a GPS-based system combined with ANPR. To an extent this mirrors the position in the UK where there is, too, no firm idea of charging type and system other than a broad recognition that some form of distance-based charge is required. However, the evidence shows that the Netherlands is actively researching and considering scheme specifications with a view to being able to take political decisions on scheme type in 2007. The Netherlands is also linking technology availability and cost to its decision-making process on when to implement Road Pricing by monitoring system costs.

4.8.4 At the local level, the emerging Road Pricing schemes identified do represent a broad spectrum of different locations and issues. However, all the locations identified are large cities - the smallest of the case study locations in population terms being Cardiff. It is noted that there are few smaller towns/cities actively considering Road Pricing in contrast to England where locations such as Cambridge and Shrewsbury are developing Road Pricing schemes through TIF, and other locations such as Norwich have now also received TIF pump-priming funding. This may reflect the UK as being ahead of the world in considering Road Pricing for smaller urban areas, or could equally reflect the rest of the world as only considering Road Pricing an option for major urban areas. The only parallel with the UK in this respect is Norway where, as identified in Phase 1, Road Pricing options have been applied in locations such as Trondheim and Bergen.

4.8.5 Considering scheme types, most of the local schemes are considering cordon or area-licence solutions. In all instances where area-licence solutions are being considered so also are cordon-based solutions. Only three of the case studies identify distance-based solutions, including London, as a long-term option. Broadly, this is consistent with the approach being adopted by the authorities in the UK developing schemes through TIF; looking at area-licence and cordon schemes but with distance-based charging as a longer term option.

4.8.6 It is noticeable from the case studies that the level of charge being considered in the majority of the locations is low relative to the levels charged in London and conceived in many of the studies on Road Pricing options in the UK. It is difficult to draw too many conclusions from this since charges need to be seen alongside the motoring costs prevalent in each case study area. It may also, though, represent that most locations are still at an early stage of scheme development and that the charge levels quoted in the public domain are low because of the sensitivity of this issue. It is also noted that Road Pricing schemes would be expected to be optimised after introduction - so comparing existing schemes with planned schemes may be misleading.

4.9 Road pricing and other measures

4.9.1 The evidence from the case studies overwhelmingly indicates that Road Pricing is being considered alongside a package of other measures to improve the transport system. For the vast majority of case studies this explicitly includes public transport. However, in certain locations measures include other demand management and highway network schemes. Broadly the approach being followed on TIF in the UK is consistent with this, though with the DfT's guidance giving emphasis on improving public transport.

4.10 Awareness and acceptability

4.10.1 The experience of London and now Stockholm clearly shows the importance of public and stakeholder acceptability in successfully implementing Road Pricing schemes. Measuring the extent of awareness and support of schemes examined by the case studies is difficult and the evidence inconclusive. Certainly there is no evidence to suggest that there is overwhelming support for Road Pricing in any of the locations examined or that any of these locations are more advanced than the UK. The possible exception to this is Stockholm, where the results of the recent referendum do indicate overall support for the Road Pricing scheme, albeit marginal.

4.10.2 At the national level there is some evidence to suggest that the continuous stakeholder engagement that has been used in developing the Netherlands scheme has increased awareness and possibly improved acceptability. The UK has a Liaison Group for local authorities developing road pricing proposals to share experience with one another and to maintain a dialogue with DfT.

4.11 Overall conclusions

4.11.1 This review has identified the status of emerging Road Pricing schemes from around the world. It is clear that a wide range of locations worldwide are now considering implementing local Road Pricing schemes, but only the Netherlands and the UK are looking at national schemes. However, the evidence indicates that the majority are at very early planning stages with very few having clear specifications of schemes. Other than locations that are extending or modifying schemes already in existence or proposing trials - there are no committed implementation plans across the sites reviewed. The UK, with two operational schemes, has a clear advantage in demonstrating the benefits and feasibility of Road Pricing and gaining public acceptance.

4.11.2 The evidence also indicates that most locations are developing local schemes on a bottom-up basis, not framed by wider national policy or backed up by legislation that would enable Road Pricing to be implemented. The exception to this is the Netherlands which does have a national framework supporting the development of its national scheme.

4.11.3 In contrast, the UK does have a national policy framework that is guiding the development of interoperable local Road Pricing schemes and does have legislation that would enable Road Pricing schemes to be implemented. Importantly, the longerterm aspiration for a national scheme is not hindering the progression of local schemes. The Department for Transport is also providing funding to enable the development of Road Pricing schemes in the UK.

4.11.4 In respect of scheme objectives it is clear that the primary focus of Road Pricing in the UK is addressing problems of congestion, while the majority of schemes worldwide explicitly seek to achieve a wider range of objectives. As Phase 1 concluded, this single-objective focus was important in gaining public acceptability for schemes that have been implemented but there may now be a case for expanding the stated range of objectives Road Pricing can address.

4.11.5 In most other respects local Road Pricing schemes in the UK outside London are at a similar stage of planning and development to those elsewhere in the world and thinking on scheme design and technology in the UK appears to be consistent with that of emerging Road Pricing schemes worldwide. However, the planning of a national scheme in the UK appears to be behind that in the Netherlands where, although the implementation envisaged in 2012 has significant caveats, progress is being made with the identification of options and engagement with stakeholders.

[ Previous ] [ Contents ] [ Next ]