Decriminalised Parking Enforcement in Runnymede Financial appraisal - Surrey Local... · 2012. 9....

Item 14 annex 1

Surrey County Council Runnymede Borough Council

Decriminalised Parking Enforcement

in Runnymede

Financial appraisal

Report prepared for Surrey County Council and Runnymede Borough Council by

Harrison Webb 1 Hillside Cottages Blackheath Guildford Surrey GU4 8QU tel/fax: 01483 892137 email: [email protected] uk

47D Greencroft Gardens

London NW6 3LL

tel/fax: 020 7372 2760 email: [email protected]

Status Draft Job no/issue

0087/6

Prepared by

dah

Date 24.10.03


Financial appraisal of Decriminalised Parking Enforcement in Runnymede: Draft Report 24 October 2003

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Contents

Page No.

1 Background Purpose of the Study 1 DPE 1

Conduct of the Study 3

Layout of this report 4

Status of this report 5

2 Assumptions Introduction 6 Permitted and Special Parking Areas 7 Trunk Roads 8 Reviewing parking policies 9 Enforcement resources: on-street 9 Enforcement resources: off-street 10 Enforcement resources: overall 11 Enforcement income 12 Other sources of potential income 16 Employment costs 16 Council on-costs 17 Additional revenue expenditure assumptions 17 Capital (start-up) expenditure 22



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3 Financial implications Financial model 24 Cash flow 24 Tests 25

4 Conclusions Optimistic Scenario 28 Pessimistic Scenario 28 The impact of additional charges 29 Conclusions 29

Appendices

A PCN Contravention Codes B Glossary of terms



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Background This Section explains the purpose of the Study, the principles of DPE and the conduct of the Study.

Purpose of the Study 1.1. The purpose of this financial appraisal is to compile a picture of the

possible financial consequences of implementing Decriminalised Parking Enforcement (DPE) in Runnymede.

DPE 1.2 The Road Traffic Act (RTA) 1991 provides for the decriminalisation

of most non-endorsable parking offences in London and it enables similar arrangements elsewhere. The essence of DPE is that local traffic authorities (in this instance Surrey County Council) may apply to the Secretary of State for orders decriminalising the offences within particular geographical areas. Then, as the offences are no longer criminal in those areas:

• enforcement ceases to be the responsibility of the police

generally using the powers of the Road Traffic Regulation Act (RTRA) 1984 and becomes the responsibility of the local traffic authority or its agent

• uniformed Parking Attendants (PAs) place Penalty Charge

Notices (PCNs) on vehicles contravening parking regulations and can, in appropriate circumstances, authorise the towing-away or wheel clamping of the vehicles (not an option to be pursued immediately in Runnymede although it will be appropriate to apply for such powers alongside DPE)

• the penalty charges are civil debts, are due to the local traffic

authority or its agent and enforceable through a streamlined version of the normal civil debt recovery processes

• motorists wishing to contest liability may make

representations to the local authority or its agent and, if these are rejected, they may have grounds to appeal to independent adjudicators, whose decision is final



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• the local traffic authority or its agent retains the proceeds to help fund the enforcement resource and administrative systems

• any financial surpluses must be used for certain other traffic management purposes as specified in section 55 of the Road Traffic Regulation Act (RTRA) 1984

• key changes resulting from substituting the 1991 Act for the

1984 Act are set out below with notes describing certain key abbreviations:

Parking restriction (examples)

1984 Act 1991 Act

parking or loading restriction

police enforcement via FPN, removal or prosecution

residents’ parking or other permit

police enforcement via FPN or removal, or local authority enforcement via NIP

metered parking local authority enforcement via an ECN for staying beyond the initial period, followed by NIP, or police enforcement via FPN or removal for non-payment or staying beyond the excess period

clearway police enforcement via FPN or removal or prosecution

local authority enforcement via PCN or clamping or removal

pedestrian crossing double white lines down the centre of a carriageway

police enforcement via endorsable FPN or removal or prosecution

police enforcement via endorsable FPN or removal or prosecution

Notes:



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FPN: Fixed Penalty Notice, allowing a motorist to pay a fixed penalty (fine) to avoid prosecution without admitting the alleged offence

Endorsable FPN: as above but for more serious offences and includes 3 penalty points and the possibility of mandatory disqualification if the limit is exceeded

NIP: Notice of Intent to Prosecute, as (unlawfully) used by some local authorities to attach a fine and suggest that prosecution can be avoided on payment; NIPs have no face value and can only be processed via the Magistrates Court

ECN: Excess Charge Notice, allowing a motorist to pay a fixed charge (fine) for parking beyond a paid-for period

PCN: Penalty Charge Notice, which is pursued as a debt (whereas an FPN is pursued as an offence)

Clamping: clamping powers are available to authorities that adopt DPE; drivers must pay a release fee to recover the vehicle and pay the related PCN

Removals: removals powers are available to authorities that adopt DPE; drivers must pay a release fee to recover the vehicle and pay the related PCN; removals and clamping can be used to punish offenders that have not registered their vehicles with the DVLA (thus blocking the debt collection process) but does not allow the following up of outstanding charges



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• it is possible, but not recommended by the Government, that

the area designated for DPE can exclude off-street car parks owned and operated by the local planning authority; the Government considers that this negates many of the benefits of unified enforcement (see paragraph 1.3 below)

• however, the designated area for DPE usually excludes high

speed roads on which parking is not a problem and enforcement best carried out by mobile police resources

• endorsable offences typically involving dangerous or

obstructive parking, some other traffic offences such as parking at pedestrian crossings (outside London), and all moving traffic offences will remain criminal and be enforced by the police

• PAs cannot direct traffic.

A full list of contraventions (there are no offences, merely contraventions under DPE) amenable to PCNs under DPE are listed in Appendix A, as supplied by the National Parking Adjudication Service (NPAS). A Glossary of legal terminology is included in Appendix B, from the same source.

1.3 The advantages claimed for DPE are numerous:

• local authorities can ensure that their parking policies are implemented effectively, thus improving traffic flow and road safety, providing a fairer distribution of available parking spaces and improving the environment

• the integration of most parking enforcement under a single

authority, hence…

• improved integration of enforcement and parking policy responsibilities

• a unified system for processing on and off-street parking

contraventions following the “disappearance” of ECNs and FPNs under DPE

• the potential for additional revenues to fund improved

enforcement and possibly other transport-related schemes



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• the ability to sanction additional parking control measures previously in abeyance because of inadequate police enforcement resources.



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Conduct of the Study 1.4 The appraisal is one of a number of tasks commissioned by the

Borough Council to assist the implementation of DPE in the Borough. The commission was awarded on 1 July 2003, based on Harrison Webb’s proposal dated 25 June 2003. The work is to be carried out under two orders, one from the Borough Council and one from the County Council.

1.5 The tasks commissioned comprise:

• undertaking a financial appraisal of a DPE operation in

Runnymede Borough (the subject of this report) • consider the deployment of enforcement resources

• document a suitable parking plan for inclusion in the

application to Government for DPE powers

• compile the application for DPE powers on behalf of the County Council

• participate in discussions between the Borough and County

Councils on issues raised by the application

• assist with additional documentation tasks concerned with enforcement procedures and codes of practice

• assist with the necessary consultation exercise

• undertake peer review checks to ensure best practice is

followed.

Layout of this report 1.6 Section 2 of this report sets out the input assumptions on which the

financial appraisal is based. Section 3 describes the financial model and presents the test results. Section 4 summarises the findings of this work.



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Status of this report 1.7 This report has draft status. It is based on the best estimates of

costs and incomes currently available. These estimates will be progressively up-dated with new information as the DPE project moves from planning to implementation and thereafter as a result of annual audit.



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Assumptions This Section develops and justifies the assumptions used for the appraisal. It first considers enforcement resources and income,

then revenue costs and capital costs.

Introduction 2.1 The financial model for this appraisal is based on assumptions and

simple mathematical relationships that compile and compare cost and income streams over time, using a custom-built Excel spreadsheet.

2.2 The cost stream distinguishes between:

• capital account start-up costs, and… • revenue account operating costs. This is an important distinction because start-up costs are incurred only once, as the name suggests, whilst operating costs are incurred continuously. The distinction is also important because Surrey County Council has agreed to fund DPE start-up costs from its Local Transport Plan account. Operating costs will be charged to an on-street parking account set up by the County Council, as DPE will be operated locally on behalf of the County Council as highway authority. The County Council offered to extend the terms of its financial support on 16 September 2003. It offered to meet all the costs (ie capital and revenue) of an agreed enforcement scheme for the first two years. During this period, it will retain all the income from penalties and County Court actions. Adoption of this offer has yet to be confirmed.

2.3 The financial appraisal is undertaken on a marginal cost basis. That

is, only those costs and incomes attributable to DPE are used in the calculation. The appraisal therefore does not seek to replicate the entire parking business run by the Borough Council. For example, the appraisal does not include the operating costs incurred in enforcing orders currently applying in the off-street car parks operated by the Council. It does not include current income from this source. Furthermore, it does not include any increase in off-street car park income that may accrue from more rigorous on-street



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enforcement under DPE. SCC does not require any such additional income to be added to the on-street (DPE) parking account. It will therefore remain part of the Borough Council’s off-street parking account.



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2.4 The appraisal does not assume perfect knowledge and it is

accepted that the inherent uncertainties mean that a best (or most likely) estimate is also an elusive concept. In this appraisal, two scenarios are presented. The Optimistic Scenario is based largely on the most favourable financial outcomes assumed in earlier research on DPE undertaken by Harrison Webb for Surrey County Council, supplemented by more up-to-date information obtained for this current commission. This scenario basically assumes low costs and high incomes. The Pessimistic Scenario is the reverse.

2.5 It can be assumed that the most likely result lies somewhere

between these two Scenarios but it not possible to state, on the basis of reliable statistics, the probability of the outcome of DPE lying outside the two scenarios or, hence, the probability of it lying between the Scenarios. Our judgement is that the probability of it lying between between the two Scenarios is of the order of 80% or more.

Permitted and Special Parking Areas 2.6 RTA 1991 enables authorities to apply for orders creating Permitted

Parking Areas (PPAs) and Special Parking Areas (SPAs). Within a PPA, previously criminal parking offences associated with permitted on-street parking places (meter bays, residents’ bays, disabled persons’ bays and free parking bays) will be decriminalised and subject to new enforcement arrangements.

2.7 Within a SPA, previously criminal non-endorsable parking offences

will be decriminalised and subject to the new enforcement arrangements. These offences include:

• contraventions of permanent, experimental and temporary

traffic regulation orders made under RTRA 1984 prohibiting or restricting waiting or relating to loading or delivery or collections

• contraventions of the Road Traffic Act 1988 prohibiting the

parking of heavy commercial vehicles on verges, central reservations and footways etc

• contraventions of RTA 1988 prohibiting parking on cycle

tracks

• contraventions or non-compliance with an order under RTRA 1984 in relation to local authority off-street parking places

• contraventions of a designation order under RTRA 1984



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• contraventions of off-street loading area orders under RTRA

1984. 2.8 It has been confirmed (August 2003) by the Department for

Transport (DfT) that: • the offence of stopping on a part of a road identified as a

stopping place for a bus has now been decriminalised (Statutory Instrument 2003 No.859)

• the following offences are to be decriminalised in an Order

later this year (2003):

- parking at taxi stands - parking offences during special events - parking on pavements in Hereford and Worcester.

2.9 The DfT has also confirmed (August 2003) that there are no plans to

decriminalise road tax disc enforcement. This offence has just been added (June 2003) to the list of offences for which the police can issue an FPN, together with failing to supply driver details when required and driving without insurance or an MOT certificate. However, there are plans to allow enforcement via camera evidence (eg CCTV). This will require primary legislation.

2.10 It is the norm for PPAs and SPAs to overlap and have the same

boundaries. In Runnymede, it is assumed that:

• the PPA and SPA overlap, have the same boundary and that that boundary is the Borough boundary

• the only exclusions from the PPA/SPA are high speed roads,

such as urban clearways and motorways, on which police mobile enforcement is preferred; these roads include:

- insert******************************** - -

2.11 The above assumption offers unified enforcement of non-endorsable

on and off-street parking contraventions by the local traffic authority or its agent. It is assumed that:

• Runnymede Borough Council will operate the system on

behalf of Surrey County Council.



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Trunk roads 2.12 Notwithstanding the above assumption, it is possible for a local

traffic authority to enforce decriminalised parking on a trunk road within a PPA/SPA under RTA 1991. This would apply to an unimproved trunk road on which parking was a problem and enforcement could be undertaken safely by parking attendants on foot. In Runnymede, it is assumed that:

• there are no trunk roads (other than any specified for

exclusion from the application in paragraph 2.8 above) for which DPE powers will be sought under RTA 1991.



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Reviewing parking policies 2.13 The Government states that local authorities should undertake a

thorough review of parking policies and related orders before applying for DPE powers. In reviewing Traffic Regulation Orders (TROs), the authorities should consider their validity and relevance. Inconsistent or invalid TROs (caused for example by incorrect signage or lining) should be rectified. Unnecessary TROs should be rescinded. This review process is currently underway.

2.14 There will also be a need, in any case, to ensure remaining TROs

are technically correct under RTA 1991. Typically this will mean existing orders will need to be modified to remove any reference to “initial” or “excess” parking periods. Parking meters (including Pay and Display ticket dispensers) will need to be converted by removing notices on them referring to “excess charges” etc. TROs should include a provision relating to “anything done with the permission or at the direction of a police constable in uniform” to cover emergency situations.

2.15 Simplified procedures exist for changes to TROs that are simply

required to reflect new powers under RTA 1991. 2.16 It is assumed in Runnymede that:

• no substantive changes to the extent or scope of TROs will be initiated alongside the introduction of DPE.

This should allow simplified procedures for order changes and allow the impact of DPE to be assessed in isolation. DPE will probably change parking behaviour to some extent and it is useful to be able to identify such changes before introducing further parking restrictions. The financial spreadsheet model allows for the introduction of on-street Pay and Display machines but only for testing purposes (see paragraph 2.48 et seq).

Enforcement resources: on-street 2.17 It is generally assumed that the appropriate level of enforcement is

related to the seriousness of parking problems, based on the authorities’ policy objectives. A PCN for a parking contravention can only be issued by a suitably authorised Parking Attendant (PA) as defined under RTA 1991 section 44. A PA should not use discretion but enforce the regulations as stated. Representations by a motorist (pleading special circumstances) may be considered by a more senior person in due course. Patrolling an area or beat on foot, or sometimes by bicycle or moped, should involve:



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• a random pattern so that the next visit is unpredictable • monitoring patterns of parking behaviour to focus on the most

serious enforcement problems

• rotation of beats to ensure equality of workload and minimise familiarity with the local community, including traders, to ensure less pressure for leniency.

As noted in paragraph 2.9 above, legislation is planned that will also allow enforcement outside London via CCTV, with PCNs posted to alleged offenders. Bus lanes could be enforced via this legislation. CCTV output will also help direct the mobile on-street enforcement resource.

2.18 The deployment of enforcement resources should reflect:

• the level of controls (for example, a residential street near a station may only need patrolling twice week but a shopping street with a maximum stay of 2 hours may require patrolling every hour)

• the duration of regulations

(for example, a weekday period from 0830 to 1830 results in 50 hours if control whereas including weekends can increase the control period beyond 80 hours)

• the level of service required

(PAs can also be sources of help and information)

• the level of contravention (as non-compliance is driven down by increased enforcement, a point is reached where the level of enforcement can be reduced whilst maintaining adequate compliance)

• the consequences of non-compliance

(more frequent patrols may be needed where legal loading is impeded by illegal parking, leading to dangerous double parking).

Enforcement resources: off-street 2.19 RTRA 1984 gives local authorities powers to provide and charge for

off-street car parking and set conditions for its use. This is generally undertaken using Pay and Display machines. Local authority officers patrol the car parks and enforce the conditions.



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2.20 Failure to comply with the relevant order constitutes an offence

under RTRA 1984 section 35(a). However, unlike under RTA 1991, breach of the conditions set out in the order is a criminal offence subject to penalty only by prosecution. There is no provision in RTRA 1984 for authorities to impose fines. Most authorities specify a tariff that includes an excess charge for initial non-payment or for over-staying.

2.21 In 1995, the powers in RTA 1991 were extended to apply to off-

street car parks regulated by an order. These powers allow the use of PCNs, clamping and removal as for the on-street situation.

2.22 Municipal car parks may be operated without an order by relying on

Pay on Foot systems. The user is required to pay the advertised sum for the parking they use and failure to do so could lead either to a civil action to recover the debt or to a criminal offence. Barrier systems preclude the need for conventional enforcement although staff are still required for security and customer assistance. Pay on Foot equipment is more expensive than that for Pay and Display. It is therefore likely that Pay and Display will continue to be used for smaller car parks outside the major towns and cities and thus maintain a need for conventional enforcement. It is assumed in Runnymede that:

• Pay and Display will continue to be the normal method of

control in off-street car parks

• unified enforcement of off and on-street parking will be undertaken via DPE

• a patrol may involve a mixture of on and off-street parking

• all enforcement staff will be conversant with procedures for

both on and off-street enforcement.

Enforcement resources: overall 2.23 The Borough Council will need to reorganise its existing off-street

enforcement patrols to include on-street activities. This is not the document in which to record this but the overall resource costs and associated start-up costs need to be assessed here.

2.24 Normally, this exercise would be led by levels of non-compliance.

Patrols would then be designed to reduce non-compliance to an



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acceptable level. This would determine the number of additional PAs required to extend enforcement to on-street areas.

2.25 However, in Surrey, the County Council has resolved (17 February

2003) to fund capital start-up costs from the Local Transport Plan and to manage the finance of DPE thereafter on a countywide basis. The County Council has also offered (16 September 2003) to fund the first two years of enforcement operations. Research for the County Council undertaken in late-2002 by Harrison Webb showed that the DPE operation was likely to run in overall annual revenue deficit at County level. In principle, the County Council will meet any such deficit from the Transportation budget. The boroughs/districts will run DPE on a day-to-day basis.

2.26 In reaching these resolutions, the County Council assumed that the

level of enforcement sought for on-street parking would, initially at least, replicate that theoretically provided by Surrey Police in the past (prior to the recent run-down of this resource).

2.27 Given the County Council’s crucial financial role, it is seeking initially

to control the number of additional PAs employed under DPE to cover on-street locations. In Runnymede, this implies that the number of additional PAs is two. It is noted that an earlier desk study of Runnymede by Harrison Webb suggested that the additional resource should be three PAs, a similar order of magnitude.

2.28 It is therefore assumed that:

• in Runnymede, the introduction of DPE will involve two new PA posts

• these posts will be integrated into the existing off-street car

park enforcement resource, which comprises of 1.5 FTE (full-time equivalents)

• this resource will be deployed reactively and not to a set

routine. 2.29 SCC accepts that once DPE is established and actual costs and

incomes known, the enforcement resources may be amended.

Enforcement income



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2.30 The introduction of DPE will not, of itself, change the output of car park enforcement, ie the number of PCNs issued under a unified DPE regime. We discuss below how the deployment of DPE on-street may affect car park usage, and hence income, at the margin. Paragraph 2.3 confirms that any such additional income will accrue to the Borough Council’s off-street parking account rather than the County Council’s on-street parking account.

2.31 However, DPE will certainly change the output of on-street

enforcement. It will introduce a revenue income stream based on the payment of debts incurred via PCNs. The amount of income will depend on the number of PCNs issued and income per PCN. The latter varies according to the time taken for motorists to pay penalty charges and the value of a PCN.



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2.32 It is now adopted policy in Surrey that the PCN rate is £60 and that

this applies countywide. There is a 50% discount for payment of a PCN within 14 days of its issue by a PA. A maximum of 28 days is allowed for payment of a PCN at face value. Non-payment after 28 days results in the issue of a Notice to Owner (NtO) by the local authority. This requires access to DVLA to obtain the address of the vehicle keeper. A 50% increment on the PCN face value applies for payment after 28 days of the NtO issue, the point at which a Charge Certificate is served for initial non-payment. A motorist may choose to make representations via an appeal to a Parking Adjudicator as an alternative response to a Charge Certificate. Appendix B lists the grounds for an appeal against a PCN (under Grounds). If there is no response to the Charge Certificate within 14 days of its issue, the authority may apply to the County Court to recover the charge as if it were a debt under a County Court order. This may ultimately involve bailiffs acting under a Warrant of Execution issued by the local authority having been granted authority by the Parking Enforcement Centre of the County Court.

2.33 It is assumed that the following income will derive from every 100

PCNs issued, based on the adoption of £60 PCNs:

Time PCN is paid

Discountor

increase

Incomeper

PCN

Number of

PCNs

Incomeper 100

PCNs within 14 days -50% £30 50 £1500between 15 days and Notice to Owner

0%

£60

15 £900

between NtO and Charge Certificate

0%

£60

2 £120

after Charge Certificate via County Court/bailiffs

+50% £90 3 £270

PCN cancelled/waived 30 £0Total PCNs/income 100 £2790Total income per PCN £27.90

2.34 Overall, it is expected that some 70% of charges would be paid

eventually. The average for England and Wales is 72% (in 1997, based on the latest Home Office statistics for non-endorsable offences where the driver was absent). In Surrey, the recorded



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proportion paid in 1996 was 80% according to Home Office statistics.

2.35 For this appraisal, the following assumptions are made:

Scenario Income per

PCN issued

Optimistic £30.00 Pessimistic £23.00

These assumptions are broadly compatible with earlier research by

Harrison Webb for, and accepted by, the County Council. These sums are assumed to remain stable over time in real terms. These assumptions have been validated against experience in Kent in the course of this current commission.

2.36 The other major factor in determining the total income from PCNs is

the number issued. Key variables affecting this output are:

• the number of additional PAs employed under DPE • the public reaction over time to enhanced enforcement and,

hence, the number of offences and contraventions committed now and in future.

2.37 We have explained in paragraph 2.28 above that 2 additional (FTE)

PAs will be employed initially under DPE. 2.38 One of the most critical assumptions in any financial assessment of

DPE is the number of PCNs issued by each PA. This depends on the level and nature of contraventions and, sometimes, the aggression with which enforcement is pursued.

2.39 There is wide variation in the assumptions used for the various

Surrey DPE studies, as reported by Harrison Webb in late-2002. A number of these studies also assume that the volume of contraventions will not change in future. This may be thought to be a curious assumption, given that the main objective of DPE is to reduce parking contraventions. It is argued by some practitioners that issue rates should be assumed to be relatively stable over time, partly because of new parking restrictions being feasible with the advent of DPE. However, we note that this stability assumption was



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one reason for widespread over-estimation of enforcement income in the initial forecasts undertaken for/by London Boroughs.

2.40 Our judgement is that it is reasonable to assume that improving on-

street enforcement resources from a perception (and reality) of virtually zero in Runnymede to a significant presence will reduce the number of contraventions for a given number of parking controls but not eliminate them because the number of parking attendants will be limited below the level at which that could occur. Two PAs simply cannot provide a presence across the Borough on a daily basis. Assuming a reduction in contraventions is also a conservative approach that reduces the risk of over-estimating income and setting targets that are unrealistically high.

2.41 This appraisal assumes that all the Surrey authorities will employ, at

least initially, relatively small teams of attendants that reflect the number of contraventions but also their disposition across the authority. This places a larger burden on the most rural authorities because the number of contraventions will be modest but very widespread.

2.42 In 1989, each Warden in Surrey issued an average of 1820 Notices

a year. By 1999, this had fallen to 980 Notices a year as Wardens were increasingly used for other duties. In London, issue rates can exceed 4000.

2.43 However, for this current Runnymede appraisal, the following

assumptions are made about PCN issue rates based broadly on our understanding of the latest experience in Kent, where DPE has been operating for over two years in all authorities:

Scenario PCNs issued

per PA per annum

PCNs issued per PA per day

Optimistic 1500 7.5 Pessimistic 900 4.5

It is assumed above that each PA will work about 200 days a year,

compatible with a 9-day fortnight. 2.44 As explained above in paragraph 2.40 above, it is to be hoped that

DPE will reduce the number of contraventions for a given number of parking controls. However, the advent of DPE may well unlock additional parking control schemes that could not previously be implemented because of a lack of enforcement resources. This is



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thought likely in Runnymede over the next 5 years, as pressure on the permitted parking supply increases. As a result, the income stream from on-street PCNs is assumed to change over time in real terms as follows:

% of test income achieved

by year of operation Scenario

1 2 3 4 5 Optimistic 100% 100% 100% 100% 100% Pessimistic 100% 95% 90% 85% 80%

It should be noted that the scenarios are based on financial

performance. In enforcement terms, the Pessimistic Scenario is more successful than the Optimistic one. These assumptions are built into the cash flow projections set out in Section 3.

2.45 The number of attendants drives the assumed number of PCNs

issued. In turn, this drives the ticket processing resources needed. It assumed initially that one processing clerk can deal with at least 5,000 PCNs per year. This results in fractions of a full time equivalent (FTE) post. It has been pointed out that whilst the total resource needed may be less than one clerk, sickness and leave will demand a minimum establishment of, say, 1.0 FTE clerk, a resource provided by two trained staff. This ensures that processing is less likely to generate a back-log that could be difficult to clear.

Other sources of potential income 2.46 DPE is simply a means to an end. It is not a policy tool in that it

should not be a variable. If Traffic Regulation Orders are in place, they should be effectively enforced or rescinded.

2.47 However, there are instances where the introduction of DPE will be

accompanied, sooner or later, by new CPZs and other parking management measures, as noted above.

2.48 The biggest initial impact on the financial context of DPE is the

potential introduction of parking charges where none currently apply (eg on-street) or increases in existing parking charges. Parking charges are not necessary for DPE to work operationally, although it is much easier to enforce charged parking than free limited waiting. It has been argued above that DPE should, initially at least, be introduced in isolation in order to gauge its impacts accurately.

2.49 Introducing new sources of income at the same time as DPE would

help underwrite the operation financially. Pay and Display parking quickly pays off the initial investment in the ticket machine and easily



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covers future maintenance. For example, a £3,000 machine would be paid for in about 6 months if it controlled 10 parking spaces that generated 40p per hour for 5 hours a day for around 300 days a year. This disregards income from PCNs incurred for Pay & Display contraventions.

2.50 The financial scenarios tested in this appraisal are based on the

introduction of DPE in isolation, with no new income from on-street parking charges accruing. This is compatible with SCC policy ie that DPE should be introduced on its own with no other TRO changes in the area at the same time. Any decision to introduce on-street charging would a local one and any consequent financial surpluses/deficits would also be locally accountable. Section 4 discusses the amount of such income necessary to ensure a high probability of DPE viability in Runnymede.

Employment costs 2.51 Employment costs are not just the direct salary cost. Employers

have also to pay National Insurance, make pension contributions and pay for holiday and sick leave. Premises costs are also sometimes included.

2.52 In this appraisal, the following remuneration and employment cost

assumptions have been made, based on the assumption that there will be no augmentation of the existing management structure:



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Salaries

• parking attendants: £17,000 plus £1,000 overtime • supervisors: £n/a • clerical staff:

ticket processing (0.5 FTE) £7,000 management support (0.5 FTE) £9,000

• managers: £n/a

These salary assumptions seek to take account of potential recruitment difficulties in the South East and the proximity to London, where PA salaries approach £20,000.

Employment costs • increase direct salary costs by 25% but add a separate

accommodation overhead elsewhere. As noted above, we have assumed that the two additional on-street PAs and the additional processing clerk can be grafted onto the existing car parks enforcement team without a need for enhanced management resources. We note that this is a significant increase in management responsibility and that it will incur training costs. The Borough Council considers that this change should be accompanied by a minimum 5% increase in salary scale. At this stage, we assume this will amount to £2,000 per year. We have also assumed that overall staff costs increase in real terms over time, as set out in the cash flow projections in Section 3 and summarised below. This increase is over and above cost-of-living increases. Scenario Real increase in

salaries by end of year 5

Optimistic 10% Pessimistic 20%

Council on-costs 2.53 Runnymede Borough Council will incur additional management

support and service costs as a result of taking on DPE operations on behalf of the County Council. These are included in the model as a £3,500 per year revenue cost.

Additional revenue expenditure assumptions 2.54 Some additional assumptions have to be made about revenue

expenditure incurred in a DPE operation.



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2.55 PAs will require hand-held ticket writers and personal radios. The

following costs have been used to cover annual revenue expenditure incurred for maintenance and replacement of this equipment (based on 33% of the capital cost of ticket writers and radios set out in paragraph 2.72 below):



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Item Annual revenue

expenditure per PA (£)

Hand-held ticket writer, incl. battery charger, with integral digital camera etc

908

Personal radio, including base station 330 Other items, incl. stationery and consumables, training, uniform replacement, recruitment, telephone expenses, computer system up-grades, software licences, IT support

4000

These costs are applied only to the on-street team in the model and are assumed to remain stable over time in real terms in the Optimistic Scenario but increase in the Pessimistic Scenario, as set out in the cash flow projections in Section 3.

2.56 It is not always possible to absorb additional enforcement staff in the accommodation currently used for car park enforcement and related activities. It will be necessary to offer the public a “Parking Shop” facility to pay PCN-related debts and make related inquiries. This may even entail additional staff. It is possible that existing arrangements will suffice but this will not always be the case. It is assumed in Runnymede that the Parking Shop operation will take place at the existing Technical Services desk in the Civic Centre, Addlestone. An allowance has been made under “premises” revenue costs for additional furniture, lockers and uniforms for Parking Attendants of £2,000 per year per Attendant plus £1,000 for the additional 0.5 FTE ticket processing clerk. A further allowance of £1,000 has been made to equip off-street enforcement staff with matching uniforms when DPE becomes operational. The future cost of this item will be borne by the Borough Council via its off-street parking account.

2.57 It is assumed that NPAS will fund a local venue for the adjudication

service to undertake its appeals process. This requires regular use of a suitable room, usually for a set number of days per month. Previously, the local authorities were responsible for funding this accommodation.

2.58 Some means of transport will be necessary to enforce the more

distant TROs efficiently. Leasing and operating expenditure will be incurred. The following assumptions have been made for accommodation and transport costs in Runnymede:



26

Item Annual revenue expenditure (£)

Premises £2000 per member of the DPE resource

Transport leasing 4WD van at £4,000 per year

These costs are expected to remain stable over time in real terms, as set out in the cash flow projections in Section 3.



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2.59 Processing PCNs involves costs associated with DVLA inquiries,

postage, cheque processing, credit card premiums, Charge Certificate registration at the County Court (£5 per Certificate) and bailiff services. These are in addition to staff employment costs. The following assumption has been made, based on current experience in Kent:

Item Annual revenue

expenditure (£) PCN processing

£2.50 per PCN


2.60 It is assumed that appeals will be incurred at the following rates per

1000 PCNs issued:

Scenario Appeals per 1000 PCNs

issued Optimistic 2.5 Pessimistic 7.5

These assumptions are based broadly on current experience outside the major conurbations, noting in particular recent experience in Kent. The current tariff for adjudications is as follows:

Item Annual revenue

expenditure (£) Cost per PCN £0.65 Annual cost £250


2.61 It is generally the case that the introduction of better enforcement results in increased use of public parking facilities. This will generally occur in off-street car parks, provided they have the capacity to cope with additional usage. It is often assumed that income from off-street car parks will increase by the order of 5% as a result of DPE. It is assumed that some motorists would chose to pay car park charges rather than incur the increased risk of being caught committing an on-street contravention. Where car parks are likely to remain free (eg Tandridge) this is not a source of additional



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income. Woking Council does not accept that such an increase is likely, given very high car park occupancy levels and the existence of on-street charging. Elmbridge’s, Guildford’s and Waverley’s car parks also run near capacity. This would limit any potential increase.



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2.62 In Runnymede, the following changes in car park income as a result

of increased usage under DPE may be expected:

Scenario Increase in car park income from usage (%)

Optimistic 7.5 Pessimistic 2.5

The assumed annual car park income in Runnymede is about

£200,000 per annum after the deduction of VAT. This income stream may reasonably be expected to increase in real terms over time in an Optimistic Scenario as charges increase.

2.63 It should be noted that this income is excluded from the DPE

appraisal as it will accrue to the Borough’s off-street parking account and not the County Council’s on-street parking account.

2.64 Car park charges are periodically adjusted for price indexing and

other reasons. Current charges are shown overleaf and apply to some 1045 spaces.

2.65 The September 2003 increase took the up-to-5 hours tariff (where

applicable) to £1.00 from 80p. The tariffs for shorter periods also increased eg from 20p to 50p for two hours.

2.66 However, as noted in paragraph 2.50, SCC is not seeking the

introduction of additional parking charges alongside DPE. 2.67 We have therefore assumed no increases in car park income

resulting from increased charges in association with DPE.



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Current car park charges (from 01 September 2003)

charges2

short stay medium and long stay Location number

of spaces1 up to 2

hrs 2 to 3

hrs 3 to 4 hrs 4 to 5 hrs over 5 hrs

Addlestone Garfield Road 1583 50p 60p 80p £1.00 £2.00

max 17 hrs

Chertsey Beomonds, Heriot Road

51 50p 60p 80p £1.00 £2.00 max 6 hrs

Chertsey Library, Heriot Road

190 50p 60p 80p £1.00 £2.00 max 17 hrs

Gogmore Farm 51 50p 60p 80p £1.00 max 5 hrs Egham Hummer Road (inc. S’field store4)

118 50p 60p 80p £1.00 £2.00 max 6 hrs

Precinct, Church Rd.

87 50p 60p max 3 hrs

Precinct extension (Saturday only)

32 50p 60p max 3 hrs

Waspe Farm 157 50p 60p 80p £1.00 £2.00 max 17 hrs

Virginia Water Bourne, Station Approach

153 50p 60p 80p £1.00 £2.00 max 17 hrs

Memorial Gardens, Station Approach

48 50p 60p 80p £1.00 £2.00 max 6 hrs

Notes to above table: 1 excluding disabled spaces, for which no charge is made if a valid orange/blue

badge is displayed 2 charges apply 0800 to 1800 Monday to Saturday 3 capacity is restricted by a market on Saturdays 4 Somerfield customers can stay a maximum of 3 hrs



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Capital (start-up) expenditure 2.68 Having described the DPE resource to be deployed, it is possible to

estimate start-up costs, to assist the County Council in its capital budgeting. An allowance has been made for fixed and variable capital (start-up) expenditure.

2.69 Fixed capital expenditure could potentially comprise:

• TRO review • signs and lines modification following the TRO review

• car park signs modification

• computer installation/up-grade

• DPE-compatible software installation

• on-street Pay and Display installation (for financial testing

only)

• consultation

• publicity

• staff training.

No allowance has been made in this appraisal for fixed capital expenditure on enforcement staff accommodation or Parking Shops; these are assumed to be revenue expenditure items. The TRO review has been paid for out of the local non-works budget and an SCC local allocation but is included in this appraisal in order to provide a complete cost picture. The review cost is set at £40,000. It is envisaged that any necessary rectification work will be paid for out of local (LTS) “signs and aids to movement” and central DPE budgets and is therefore excluded from this DPE model. The currently estimated cost of this rectification work is £50,000. An allowance is included in the model for costs associated with making the Consolidation Order, the legal foundation for modified signs and lines. A revenue cost of £1,500 per year is included for maintenance of on-street signs and lines relating to parking regulations. A capital start-up cost of £1,000 has been included to allow for up-dating car park signs/plates. SCC would, if required, fund the capital cost of new/augmented accommodation for all parking enforcement staff.



32

2.70 Computer software up-grading for DPE remains an area of under-performance by suppliers that has haunted DPE since its inception. An allowance of £30,000 has been included in the model under capital start-up costs.



33

2.71 A nominal capital start-up cost of £5,000 has been assumed for

consultation and publicity, based on use of the SCC media adviser. A further £5,000 has been included under revenue costs in the financial model, falling to £2,000 from year 2 onwards. This on-going revenue cost reflects the value of on-going publicity to maintain the profile of DPE despite the relatively small on-street presence currently planned.

2.72 Good training courses are available for about £5,000 each for the PA team, the processing team and management, a total of £30,000 based on 4 Attendants in total, a Clerk and a Manager. SCC advises that this is a revenue cost item. It is assumed that staff turnover will require on-going training costs. These are assumed to be stable at £10,000 from year 2 onwards in the optimistic scenario but increasing from this level in the pessimistic scenario.

2.73 Variable capital expenditure is incurred for items such as hand-held

ticket writers and personal radios used by PAs, varying according to the size of the overall enforcement team under DPE. The unit cost assumptions for variable capital expenditure are based on a current quotation (07 August 2003) from Langdale Systems Ltd at the request of Runnymede Borough Council:

Item Capital start-up

expenditure per PA

(£ excluding VAT)Cassiopeia IT500 hand-held ticketing terminals with integral digital camera, including allowance for download cabling, multi-battery charger etc

2750

Personal radio, including base station 1000 2.74 It is assumed that all enforcement staff (2 existing plus 2 additional)

will be equipped with ticket writer and radio equipment and that thus four sets will be needed.



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Financial implications This Section describes the spreadsheet model used, the cash

flow assumptions and the test results.

Financial model 3.1 A spreadsheet “model” has been built to apply the assumptions set

out in Section 2. The model applies to year 1 of DPE operation and is largely self-explanatory. Input assumptions from Section 2 are highlighted in yellow boxes. The model framework allows for the inclusion of costs and revenues associated with additional and increased parking charges for sensitivity testing purposes only. The basic test scenarios exclude any such allowances, as explained in Section 2. It should be noted that a proportion of the revenue cost items in the model will be incurred in advance of year 1 of DPE operation, as will capital start-up costs.

Cash flow 3.2 The model includes a cash flow table for revenue costs and income

because better enforcement under DPE may reduce the number of contraventions over time and, hence, the number of PCNs issued (see paragraph 2.44). Some other costs and incomes are also expected to change over time in real terms. The cash flow projection is based on current prices (ie excluding cost-of-living increases) and the following assumptions, for each of the two test scenarios:



35

Optimistic scenario cost index based on year 1 =

100 Revenue cost item (on-street enforcement)

year1

year2

year 3

year 4

year5

staff 100 102 105 107 110 Council on-costs 100 100 100 100 100 equipment maintenance 100 100 100 100 100 premises and transport 100 100 100 100 100 uniforms (off-street enforcement)

100 0 0 0 0

PCN processing 100 100 100 100 100 adjudication 100 100 100 100 100 publicity 100 40 40 40 40 training 100 33 33 33 33

cost index based on year 1 = 100

Revenue income item (on-street enforcement)

year1

year2

year 3

year 4

year5

on-street PCNs 100 100 100 100 100 on-street Pay & Display PCNs 100 100 100 100 100

Pessimistic scenario cost index based on year 1 =

100 Revenue cost item (on-street enforcement)

year1

year2

year 3

year 4

year5

staff 100 105 110 115 120 Council on-costs 100 100 100 100 100 equipment maintenance 100 100 105 105 110 premises and transport 100 100 100 100 100 uniforms (off-street enforcement)

100 0 0 0 0

PCN processing 100 100 100 100 100 adjudication 100 100 100 100 100 publicity 100 40 40 40 40 training 100 33 40 50 60

cost index based on year 1 = 100

Revenue income item (on-street enforcement)

year1

year2

year 3

year 4

year5

on-street PCNs 100 95 90 85 80



36

on-street Pay & Display PCNs 100 95 90 85 80

Tests 3.3 The spreadsheet model tests of the two scenarios are set out below.

Each scenario comprises two pages, the first being the year 1 calculation, the second being the cash flow projection for the period to the end of year 5.



37

insert page 26, Optimistic scenario



38

insert page 27, Pessimistic scenario



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Conclusions This concluding section considers the implications of the assumptions used and results of this appraisal.

Optimistic Scenario 4.1 The Optimistic Scenario is based on “high” income and “low” costs

and results in the steady accumulation of a financial deficit. Revenue costs exceed incomes by over £45,000 in year 1.

4.2 The key variable is the number of PCNs issued per PA per year.

We do not think it is likely that this number will exceed 1500 in Runnymede. The parking controls are scattered but small in extent and the observed number of contraventions appears not to be great. On-street enforcement productivity will be held down by the absence of charged on-street parking, which is much easier to enforce (via ticket observation) than free limited waiting (via repeated registration number recording). It is assumed that this income will be stable over time, partly as a result of new or extended parking controls being introduced.

Pessimistic Scenario 4.3 The Pessimistic Scenario shows a rapid accumulation of a large

deficit as the result of a large annual difference between total revenue costs and incomes. The former exceeds the latter by over £90,000 in year 1.

4.4 This result is largely the result of a PCN issue rate of only 900 per

PA per year. This is compatible with the lowest recorded in Kent, based on combined on and off-street enforcement. Off-street enforcement is usually more productive than on-street because of the use of Pay and Display technology in car parks, which makes inspection much quicker. It is also assumed that income will fall over time as fewer contraventions will be committed and, by implication, no significant extensions of parking controls are introduced in Runnymede, at least in the first five years of DPE operations. Certainly we are not aware of major suppressed demand for such additional controls.



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The impact of additional charges 4.5 Sensitivity tests of the Pessimistic Scenario show that either of the

following changes would substantially reduce the risk of an annual deficit:

• 225 on-street spaces subject to Pay and Display controls at

20p per hour (equivalent to a 22% increase in charged spaces in the Borough), or

• a 40% increase in existing car park charges.

Obviously, much smaller changes would be needed to balance finances if the Optimistic Scenario prevailed.

Conclusions 4.6 It is concluded that:

• DPE in Runnymede is much more likely to run in deficit than surplus under current policies and protocols

• any annual deficit is unlikely to exceed £90,000

• any annual deficit is unlikely to be less than £45,000

• enforcement should be managed such that each PA should

seek to achieve an initial on-street PCN issue rate of at least 1,200 per year, a target midway between the Optimistic and Pessimistic Scenarios and broadly what is currently achieved in the Borough’s car parks

• PCNs should be issued and processed accurately and

promptly enough to ensure an income of at least £30 per PCN, a target compatible with the Optimistic Scenario

• capital start-up costs could be of the order of £130,000.


Decriminalised Parking Enforcement in Runnymede: Financial appraisal Draft Report 24 October 2003

Appendix A

PCN Contravention Codes


Decriminalised Parking Enforcement in Runnymede: Financial appraisal Draft Report 24 October 2003

Appendix B

Glossary of terms

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