Birmingham businesses could be forced to pay almost £300 for every parking space they provide to workers under money-raising plans being considered by the cash-strapped city council.
Officials are looking into the move in a desperate bid to raise money to fund transport infrastructure improvement as the local authority wrestles with huge budget cuts.
Commuters who have workplace parking in Birmingham city centre and other major shopping areas like Sutton Coldfield could be slapped with the levy which would then be used to pay for projects like metro lines or park and ride services to ease congestion.
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At the same time the authority aims to cut its levy to the regional transport authority Centro by £6.4 million.
Business leaders reacted with fury to the proposals, with the city’s chamber of commerce describing it as a ‘punitive tax’ which could hit the recovery.
Centro said the budget cut could mean increases to child and other concessionary fares.
The proposals are part of a wide ranging review of the council’s wide ranging transport and economic development services – which currently cost the taxpayer £60 million a year to run.
Under the review council officials have been asked to investigate a workplace levy and are taking a close look at one recently introduced in Nottingham.
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The Nottingham scheme means every employer providing ten or more parking spaces for staff pays an annual fee of £288 per space – those with fewer spaces merely have to register them.
Some 45,500 places have registered at an estimated total cost to businesses in the region of £8 million. The levy has been dubbed a ‘tax on work’ by critics.
Katie Teasdale, director of policy at Birmingham Chamber of Commerce Group, said: “We would strongly oppose any further tax on businesses. This is a punitive tax and detrimental to companies when we are in the early stages of an economic recovery.
“We agree that more should be done to encourage people to use public transport, but that is only if the facilities are fully available.
“Any costs would have to be met by the employer or employees. And any tax on business is a tax on jobs.”
Paul Watters, head of roads policy at the AA, said: “We regard it as a tax on jobs and a tax on work. About 76 of our members in a survey thought it was a bad idea and the Government should stop it.
“Eighty-four per cent of a Populus poll thought the scheme was simply another way of taxing work.
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“It is damaging for the business community. We need investment in transport, but this isn’t the way to do it.”
A spokesperson for Derbyshire and Nottinghamshire Chamber of Commerce said the Nottingham levy had yielded results for the council, but remains unpopular with some firms in the city.
He said: “We have had a lot of discussions with Nottingham City Council about the parking levy. The council is saying that it has achieved what it was set out for and we are still receiving occasional calls from members who are less than happy about it.
“However, we are reserving our position on it at this moment.”
But Birmingham’s Labour leader Sir Albert Bore said: “This would emulate models that have been successfully developed across Europe and provide long-term investment for key infrastructure developments.”
He warned that with £450 million further savings needed between now and 2018 the council can leave no stone unturned in the quest for savings and income – while aiming to deliver services more efficiently.
Also being looked at under the service review are tourism and culture spending, Marketing Birmingham subsidy, the Highways contract with Amey from which £1 million a year savings have been earmarked, and regeneration.
They have identified £13.8 million cuts from the £60 million it spends on the economic development services and will rank services against those provided elsewhere in the City Council to see if further cuts – including the dismantling of services if needed.
Further measures include cutting costs by setting up a Birmingham Energy Service Company to generate free electricity, based on the Combined Heat and Power Generator at the ICC, and buying up energy on the wholesale markets to save the authority up to £750,000 over three years.
The cut price fuel it could be sold on to residents and businesses – undercutting the big six energy suppliers.
They are also considering launching more Business Improvement Districts, perhaps on a theme level such as tourism industry or manufacturing, to lever in more funding.
But the Labour leader has ruled out disbanding employment services altogether, deciding that the costs of doing nothing to the public purse – through greater benefit claims and knock-on effects on housing, crime, social care and health service – would be ultimately greater.
Sir Albert said that in a recession it was vital that they continue to support business and jobs growth – with the ambition of taking 55,000 of Birmingham’s 112,000 unemployed off the dole – through schemes like the Life Sciences Business Campus at Selly Oak and the Advanced Manufacturing Hub in Aston.
He said: “Without this the businesses and foreign direct investment will not come.”
The council, along with the other West Midlands Authorities, are asking Centro to take a share of the local government cuts.
Council Labour leader Sir Albert Bore said that the £6.4 million suggested is approximately ten per cent of the transport levy paid by Birmingham.
He said: “We have already told Centro to expect an significant reduction in the levy. It is along the lines of budget reductions we have to deal with – so we are not asking them do anything we have not already done ourselves.”
The review paper suggests that any shortfalls in transport funding could be partly offset by ‘a new system of Government agreed employee tax models’.
Centro has warned that, in the face of such a cut, some subsidise transport services such as child fares or ring and ride could be cut.
A spokesman said: “We fully understand the tough financial position facing our local authorities which is why Centro has cut its own operational costs by some 40 per cent over the last four years.
“However, having already made these savings we will now have to look at all our areas of discretionary expenditure. Discussions with the districts are at an early stage but areas for potential savings could include Ring and Ride, child fares, subsidised bus services and concessionary rail and tram travel.”