Road pricing may be way to ease congestion for city motorists

A nationwide system of charging for roads by use – road pricing – is the only solution to the growing problem of congestion on UK roads.

That’s the view of Professor Roger Vickerman from the School of Economics at the University of Kent and a former member of the standing committee on trunk road assessment, appointed by the secretary of state for transport.

He wants policymakers to take a bold new approach to the issue, rather than just building more roads in the hope of cutting congestion.

“We already have blunt instruments such as the London congestion charge,” he told Fleet News, “but a sophisticated system of electronic tolling would charge drivers for their actual use of the system and, by differentiating by time of day, can encourage those with flexibility to adjust their journeys to times of lower traffic volumes.” 

He said the current system of charging motorists is a tax on car purchase and ownership, and does not distinguish by area of residence or use.

He explained: “Residents of rural areas, many of whom have no alternative to using a car, typically travel on the least congested roads, but pay the same road tax and fuel duty. They would be better off under a system that charged for the actual use of roads that reflected levels of congestion.”

The usual response is to call for more road building and, while that can help in some cases, the evidence suggests traffic typically expands to fill the space available, argued Vickerman.  

“Eventually, as with any limited resource, the only solution is one that uses price as a means of allocation – that’s how we charge for the alternatives such as bus, rail or air,” he said. “Politicians need to grasp this nettle now.”

Pay-per-mile regime

The debate around road pricing comes in the wake of a Government consultation on reforming the current heavy goods vehicle (HGV) levy, with a new pay-per-mile regime mooted to cover the cost of damage to the road network.

It says it is interested in views on how international models could work in a UK context. For example, whether a charge based on the amount of distance travelled by HGVs and by the emissions class of vehicle could help to meet these objectives, or a differentiated time-based charge.

A new pay-per-mile charging regime for HGVs raises the prospect that it could be used as a test-bed for other vehicles, especially when fuel duty receipts are coming under increasing pressure.

While fuel duty receipts have been broadly flat in cash terms over the past six years – the Treasury collected £27.5bn last year – they have fallen as a share of gross domestic product (GDP). 

The main rate of fuel duty was cut by 1p in the 2011 Budget to 57.95p per litre (ppl) and has been frozen at this rate since. 

Growth in fuel consumption has also been weaker than growth in the rest of the economy, largely reflecting rising fuel efficiency of the vehicle stock, including the adoption of hybrid and electric vehicles. 

However, transport secretary Chris Grayling denied that the HGV plan was the beginning of a wider charging system that would eventually apply to vans and cars.

This is despite calls from the fleet sector for such a scheme. The Fleet Manifesto, compiled by Fleet News, ACFO and the British Vehicle Rental and Leasing Association in 2015, recommended that the Government considered the concept of a national road pricing system as a way to reduce congestion and also incentivise uptake of lower emission vehicles by varying the charges based on emissions.

The Association for Consultancy and Engineering (ACE) believes Government should not discount a wider rollout of road pricing. 

Dr Nelson Ogunshakin, chief executive of ACE, said: “Reform of the HGV road user levy, fuel duty and vehicle excise duty is a great opportunity to test both the concept and delivery of a truly dynamic road-user charging system that will ultimately mean fairer funding for all.

“It is vital the Government starts these conversations with the industry now.”

London is most congested

In its latest report, Inrix ranked the UK as the 10th most congested country in the world and the third most congested in Europe, with drivers spending an average of 31 hours a year in traffic jams during peak hours. 

The direct and indirect costs of congestion to all UK motorists amounted to more than £37.7 billion in 2017, an average of £1,168 per driver, it says.

London is the UK’s most congested city for the 10th year in a row, ranked second in Europe after Moscow and seventh in the world. 

Drivers in London spent an average of 74 hours in gridlock during peak hours, an increase of one hour since last year. This contributed to congestion costing London drivers £2,430 a year each and the capital as a whole £9.5bn from direct and indirect costs. 

Direct costs relate to the value of fuel and time wasted, while indirect costs relate to freighting and business fees from company vehicles idling in traffic that are passed on to the household bills through higher prices.

Together with London, Birmingham, Luton, Manchester and Edinburgh made up the UK’s five most congested major cities. 

Drivers in Manchester spent 39 hours in congestion during peak hours, and 10% of their total drive time (peak and non-peak hours) in gridlock. This, in turn, cost each driver £1,403, and the city £345 million. 

“Combined with the rising price of motoring, the cost of congestion is astonishing – it takes billions out of the economy and impacts businesses and individuals alike,” said Graham Cookson, chief economist at Inrix. “With the Office of National Statistics showing more cars on the road than ever, we need to consider innovative approaches. 

“Increased flexible working or road charges have potential. However, transport authorities should be looking to exciting developments in data analytics and AI which promise to reinvent our approach to traffic management.”

Impact on ‘perk’ cars

Fleet representative body ACFO warned that road pricing could negatively impact the provision of ‘perk’ cars if it is not a direct replacement for other forms of taxation.

Chairman John Pryor told Fleet News: “Road user charging nationwide could spell another nail in the coffin of the perk company car, with employees being further encouraged to use own cars and claim such payments through their employer’s expenses system. That, in turn, would leave fleets and businesses managing commercial vehicles and ‘job-need’ company cars alongside an expanded ‘grey fleet’ and all the related issues that would entail.”

Many fleets, particularly commercial vehicle operators, have introduced journey planning and dynamic mapping in a bid to evade congestion ‘hotspots’ and utilise live traffic information to help drivers steer clear of traffic jams.

However, such technology does not always enable fleet vehicles to avoid congested areas.

“Nevertheless, many businesses could work with their employees and their customers to potentially introduce greater flexibility to the working day in an attempt to avoid congestion and, simultaneously, reduce costs,” said Pryor. 

“For employees, that may include home working or travelling into the office later and leaving later instead suffering traffic jams as part of the daily commute. 

“In other cases, particularly where customer service is critical, operating outside of traditional ‘office hours’ may be a possibility.”

To read more from ACFO chairman John Pryor on road pricing and the costs of congestion, click here.