Road Pricing: A Study

1. Introduction and background to the report

1.1 The purpose of this report

This report has been prepared by the Motorists' Forum Working Group on Road Pricing (the WG) in response to a request by the Department for Transport (the Department) for advice on what can be done to introduce road pricing efficiently and effectively using existing technologies and business systems and the opportunities (and disadvantages) that could arise for companies who align their technology to incorporate the calculation and collection of road charges.

This report has been developed by the WG on the basis of the Terms of Reference set out at Appendix A. The Terms of Reference include the agreed objectives and questions to be answered.

The report consists of the following sections:

• This introduction to the topics addressed, including some high level background to the Study.
• An outline of the roles and functions needed for road pricing, to provide a basis for common terminology and understanding.
• Sections for each of the "four questions" posed by the Department for the Motorists' Forum to answer:
• How existing services offered could be expanded to calculate and collect road charges?
• What are the opportunities for companies who align to road charging?
• What are the disadvantages and reasons why businesses might not align to road charging?
• What are the organisations the Department should be engaging with and how can their members be engaged with?
• A discussion of how the disadvantages and obstacles could be overcome, highlighting actions by both the Department and business.
• A series of recommendations as to how the Department should move forward in engaging with industry in the future.

1.2 Background to the Road Pricing Working Group

1.2.1 The Working Group on Road Pricing

The Motorists' Forum is a group of the Commission for Integrated Transport that advises Government and local authorities on policy proposals affecting motorists. Its membership is drawn from a wide cross section of motoring interests and other stakeholder groups closely concerned with motoring related issues.

In Autumn 2006, the Forum set up a small Working Group, consisting of representatives from a number of organisations closely concerned with road pricing issues, to consider a number of questions raised by the Department concerning the possibility of delivering road pricing services. The Group consisted of the following:

Christopher Macgowan - SMMT (Chairman)
John Lewis - British Vehicle Rental & Leasing Association
Justin Jacobs - Association of British Insurers
Mike Hollingsworth & Tony Spalding - SMMT
Geoff Llewellyn - Intellect Transport Group
Ian Simpson - Confederation of British Industry

The Group was advised by:

Steve Gooding - Department for Transport
David Prescott - Secretary to the Motorists' Forum
Phil Jeanes - Expert Secretary to the Group

To date, most organisations have largely considered their own policy and how charging for road usage would impact upon their members. The WG was, however, charged with looking at the wider situation that exists today and the changes to the motoring environment that might occur in the future.

In looking at today's capabilities and the influences for the future, the WG was seeking to help the Department establish an informed view of the development of key industry sectors, including the opportunities and challenges that are presented by the introduction of road pricing.

1.2.2 The policy background

Economic growth, falling motoring costs and the convenience of the private car mean that motoring will continue to be Britain's predominant transport mode for the foreseeable future. But if road traffic levels continue to rise in urban areas and on the national road network, traffic congestion will become an increasing problem. Charging people directly for their use of roads (known as road pricing, road user charging or congestion charging) is one of a number of tools that could help address this problem.

Douglas Alexander was appointed as Secretary of State for Transport and for Scotland in May 2006. In appointing Mr Alexander, the Prime Minister stressed that one of the key challenges ahead for his Department was in managing demand for road transport and ensuring that the best is got out of the existing network. He therefore asked Mr Alexander to advance the debate on the introduction of a national road pricing scheme. The Prime Minister stressed the successful roll-out of local schemes funded from the Transport Innovation Fund (TIF) would be critical, and also asked Mr Alexander to identify other key steps for the successful introduction of road pricing within the next decade.

Mr Alexander set out in a speech that he gave on May 12 2006 that the big challenge faced by Government was to take road pricing off the drawing board and make it work for road users. He highlighted two key aspects to this challenge.

The first was a need to closely examine the technology available and to see what it could deliver in practical terms. Accordingly, the Government is intending to use demonstrations to examine the technologies and services that are already being developed by the motor industry and others and to see how emerging technology could be used for road pricing.

The second aspect involves establishing pilot schemes with local authorities under the auspices of the Department's TIF. A number of authorities such as those in the West Midlands and Greater Manchester are developing proposals that include road pricing as part of a package of measures designed to improve local transport. The Government is currently considering the bids it has received from local authorities. Local pilot schemes could be implemented within 4-5 years.

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