Faced with frequent calls from businesses and customers for free parking in towns centres, I often liken it to expecting a free coffee in a town centre cafe. Yes, that might be welcomed though what would the coffee be like and would the cafe stay open for long? Here I look a little more in to my own assertion with the intention of putting public parking profits in perspective. The aim is to enable informed, comparisons between places and answer the question, whilst not free, does a parking pit-stop in your town or city centre represent good value?
People, Places & Parking
This attempt to put public parking profits in perspective, is part of our wider work though out People, Places & Parking Process, to take an evidence-based approach to getting the most from parking provision in town and city centres. The process considers the quality, quantity, convenience and -lastly- the cost of town centre parking. Here though, we are focusing first on costs. It is also part of our wider assessment of the national benchmarks that place leaders can draw-on to help give a rounded portrayal of town centre performance to measure the merryment and year-round fluctuations.
RAC Foundation figures
The go-to guide for understanding the wider context of public parking profits and how they are spent in your area is the RAC Foundation’s annual review of local authority parking finances in England. Here we draw-on data in the most recent version, published in 2024 and covering the period 2022-23. This review provides figures for the expenditure, income and efficiency of on-street and off-street parking for every local authority in England. From the figures provided it is possible to calculate the profitability of parking provision as a comparable percentage. Figures are provided separately for London and other local authorities, as well as comparable headlines for Scotland and Wales.
National trends
We beginning by exploring some national trends that put public parking profits in perspective :
- On-street parking is nearly twice as profitable as off-street, though expenditure is similar.
- Over 70% of the on-street parking profits are generated in London, where it accounts for 99% of the profitability.
- The surplus generated from public parking provision in England in 2022-23 was £924million, which represented an increase of just 2 % over 5 years.
- This total of £924million represented a 50% profit relative to expenditure in 2022-23.
- The profit level was 61% in London and 40% in the rest of England.
- Profit levels in Scotland are very similar to England at 40%, though total income is only £31million
- Profit levels in Wales are much lower at 24% and total income is only £10million
In short, you are likely to get much better value parking in a car park in Wales than feeding a meter on the streets of London. Wales though, will have fraction of the surplus to re-invest in town travel, compared to London.
Cambridgeshire councils comparisons
Here is more detailed analysis of the seven local authorities operating across the historic county of Cambridgeshire, where are People & Places offices are based. These reveal very different levels of financial performance for each council area:
- Cambridge, where off-street parking demand is noticeably high, generated a surplus of just over £5million in 2022-23, equivalent to a 53% profit.
- Additional local research indicated a proposed increas in daytime parking charges in Cambidge of 9%, after remaining frozen since 2019.
- Cambridgeshire County Council, who have responsibility for managing on-street car parking, including free provision, made a loss of 731,000, equivalent to 11% of expenditure. Income was down -2.4% compared to five years earlier.
- Peterborough City Council, as a unitary authority managing on-street and off-street parking, made a surplus of £768,000, which represents a 24% profit.
- Huntingdonshire generated a surplus of £978,000 largely from managing car parks in three market towns, and this equates to a profit level of 39% relative to the national benchmark of 40%
- East Cambridgeshire Council, where the main town/city is Ely that offers a high proportion of free parking, made a loss from its parking management of £191,000, equivalent to -125% of its expenditure.
- Fenland District, which manages free car parks in four market towns, had the lowest percentage of profit of any council in England in 2022-23 at -15950% by virtue of the fact that it made a £319,000 deficit relative to income of just £2,000.
- Lastly, and ‘leastly’, South Cambridgeshire is unusual in being one of the few local authorities in England that manages no parking.
- All of the Cambridgeshire councils that operate profitable parking services, showed single figure decreases in income, and single figure increases in expenditure, over the five-year period to 2022-23.
Maybe Cambridgeshire is a county of contrasts, though it is striking from this examination of parking profitability in its seven local authority areas, that there is no such thing as normal -except in Huntingdonshire with profit levels comparable to the national average!
The coffee comparison
The cost of parking centrally for say three hours on a Saturday, varies from £23.70 in central Cambridge; to £3.50 in Peterborough; £2.60 in Huntingdon; and free elsewhere. A half-hour coffee-break at Starbucks in comparison will set you back £4.20 for a cappuchino. According to our ‘friends’ at ChatGPT, Starbucks makes a 55% gross profit on a cup of coffee, or 15-20% net, when all overheads are taken into account.
Re-investing profits
Councils across the U.K must spend any profits from parking in-line with Section 55 (s-55) of the Road Traffic Regulation Act 1984. The essence of the legislation is that income from all penalty charges (whether issued for on-street or off-street contraventions) plus any income from on-street parking fees and charges is subject to s55 usage; income from off-street parking fees and charges is considered to be commercial income and is available for general use by the local authority. The so-called s55 uses include: transport and infrastructure; environmental and sustainable transport initiatives.
Thus, in the Cambridgeshire context, the County Council is responsible for managing on-street parking and any surplus can readily be used as part of its role as Highways Authority. Profits for the other local authority areas largely come from off-street parking and can therefore be spent across council services.
Perspectives on the value of parking
It’s striking the range of profitability from just looking at parking provision across Cambridgeshire. In part this seems related to the confidence of local places to attract shoppers. The indication is that the places with the more limited appeal are where parking is not generating a surplus to reinvest in improving the service.
The most recent national benchmark indicate that a 40% profit is the norm across England outside London and increases in come over the five years spanning the pandemic have been minimal with only a 2% increase over the whole period.
New figures are available from the RAC Foundation each spring that enable parking profitability to be benchmarked in your council area. This can be supplemented by more detailed, local information indicating if changing income levels are due to varying use or increased charges.
With devolution on the horizon across England and an accompanying restructuring of local authority areas, there is the opportunity to ‘level the playing field’ between differing profitability between council parking services. This will also put responsibility for on-street and off-street parking management under ‘one-roof’ to better allow trade-offs between their different levels of profitability.
From the examples explored here, it seems the value we get from town or city centre parking varies with the place. Putting public parking profits in perspective, it appears that parking can be a modest part of the cost of a day out, though local authorities can still be left with a healthy surplus to reinvest in services, rather than redistributing to shareholders.
Further reading
Read about our work though the People, Places and Parking Process to improve parking for customers and businesses in Salisbury.
Learn more about how we have taken our understanding of town centres and combined with Park Consult’s experience of parking management, to offer a comprehensive and cost effective People, Places & Parking Process consultancy service for councils, business improvement districts and parking providers.
Take a look at the guidance that we prepared for the Local Government Association (LGA) on town centre travel, parking and access; read the LGA case study of our work linking parking and place in Sleaford that uses our process; or contact us at services@people-places.net
Read the Institute of Place Management ‘think piece from People & Places Director, Chris Wade, about how progressive place leaders welcome extra options for travelling into town.
