Summary Report

6. The Congestion Charging Option


Key Elements of the Congestion Charging Option

          

Congestion Charging

  • Creation of a charging zone in Cambridge, similar to the London scheme
  • Peak period charging (7-10 am and 3.30-6.30 pm) of £3.50 per day for vehicles entering of leaving the zone
  • For car-use by Cambridge residents within the cordon, at peak periods there would be a charge of 50p per day
  • No charge for cars entering edge locations in Cambridge, such as park and ride site, Addenbrookes, etc


Click here for enlarged map of charge area

Sustainability implications

The proposed Congestion Charging Option may reduce the economic prosperity of the Cambridge Sub-region, unless accompanied by other complementary measures. The increases in transport costs affect household living cost, which in turn affect the salary costs of employers.

Cambridge employers find great difficulties in attracting labour, and with the introduction of the congestion charge, it would make recruitment even more difficult. Central area retailers would also be affected, as fewer customers would be prepared to drive into Cambridge to patronise the shops.

It is estimated that local employers that trade outside the Sub-region, (‘exporters’), especially those in the City of Cambridge, will face an increase in production costs of £160 million per annum. This is much more than the collected tolls and it is due to an increase in housing costs within the charging area. The increase in housing prices, transport cost, and salaries demanded by employees lead to higher prices that result in increased costs to exporters. If they are able to pass-on the increases to their customers, it may not affect the Sub-region economy, but there is certainly a risk of losing market share and thus production. If, as is more likely, the exporters were unable to pass the increase to their customers, they would suffer a reduction in profits.

However, the higher revenues for the local authorities operating the system would somewhat compensate for the increase in the cost of production. It all depends on how the surplus revenue is spent. The revenues can be used by a local authority to invest in transport improvements, such as better public transport. If people believe that the local authorities would use the money more wisely than individuals, the charging programme may be acceptable.

However, it should be noted that current legislation only guarantees that local authorities can use this revenue for investment in local transport improvements for 10 years. After that, the Treasury is able to keep the revenues.

From the social point of view, this option would penalise the high and middle income groups. The higher income socio-economic group of professional and managers will be worse off in terms of cash, but compensated in terms of reduction in travel time.

Lower income socio-economic groups are less affected, as they tend to live within the City in social housing and travel less by car. They may experience some benefits in terms of improvement in public transport performance. However, those low income people who do need to drive into Cambridge during peak periods would be adversely affected because the toll would be a larger proportion of their disposable income, than for higher income groups.

It would improve environmental sustainability with an overall 9% reduction in carbon emissions and fuel consumption, and less local air pollution.

Investment Costs Equipment etc 8
Annual Benefits User: tolls -41.4
  User: cost savings 3.3
  User: time savings 20.6
  User: convenience -6.1
  User Total Benefits -23.6
  Operator: revenues 41.4
  Operator: costs -8.1
  Operator Total Benefits 33.3
  Government Benefits -2.8
  Total Benefits 6.9
Rate of return Social 86.3%
  Operator

416%

Results

  • Car traffic – reduces substantially with fewer trips into Cambridge and less delays
  • Public transport – use increases
  • Walking and cycling – increases
  • Environmental – very positive with less local air pollution, and lower carbon emissions
  • Cost of living and production costs – increase making the Sub-region less competitive
  • Investment costs – is small and the revenues from the charge produces a large overall transport economic benefit, but drivers are heavily penalised with few alternatives offered to them
Introducing the Study Base
Case
Cycling/ Walking Public Transport Orbital Highway Congestion Charging Combined Option Options Compared