Agenda item

Report of the Director for Environment and Resident Experience. To be introduced by the Cabinet Member Climate Action, Environment and Transport.

A review of charges that apply to car clubs operating in the borough is being undertaken in advance of the retendering of contracts for car club provision. This is to ensure that charges reflect the value of kerb space and cover the cost of managing and monitoring the scheme.

The Cabinet Member introduced the report and explained that the way that vehicles are used should fundamentally change. It was explained that the vision was for residents to access vehicles when needed rather than defaulting to private ownership. This shift was explained as being essential for creating a more sustainable and equitable transport system. It was noted that car clubs represented a vital component of this transformation. It was stressed that the Council prioritised and promoted sustainable travel modes like walking, cycling and public transport, it was recognised that some journeys will always require a car. It was explained that, by providing an environmentally friendly option for these essential trips, car clubs help break the link between car use and car ownership.

It was noted that the ambition of the Council was to have shared vehicles available on every street, integrated with other sustainable transport options. It was explained that there was a vision of the creation of mobility hubs that combined car club spaces with electric vehicle charging, cycle parking, and enhanced public spaces to transform streets into places that better serve our communities while advancing our climate goals. It was explained that, by opening up the market to more providers, we aim to significantly expand car club provision across the borough. Greater choice and availability will make it easier for residents to access shared vehicles when they need them, helping more people move away from private car ownership.

It was explained that this expansion would support the goal of reducing the total number of vehicles on our streets while ensuring residents retain access to cars for essential journeys. It was highlighted that the strategy aligns with the Council’s broader goals around improving air quality, reducing emissions, and creating more liveable neighbourhoods.

In response to comments and questions from Cllr das Neves, Chandwani and Emery, the following information was shared:

• It was explained that the main purpose of the raising of prices was to bring prices closer to the median of London Boroughs, where Haringey had a low rate currently
• It was noted that there was a current dominance of providers who were already present. Officers explained that the changes proposed would encourage smaller providers to enter the market more effectively.
• It was explained that the current profits made by current car clubs was projected to be £1.4million; an increase in charges would be projected to reduce profits by approximately £50,000, which was not projected to make a significant impact on the profitability of the service.
• It was explained that the proposal would be rationalising charges into one package, which would simplify charges for companies. It was noted that benchmarking with other comparable local authorities put the proposal at the median cost.

RESOLVED:

That Cabinet:

1.        Approved the following changes to car club permit fee subject to the outcome of statutory consultation.

a)      Increase in the fixed bay (back-to-bay) permit fee from £240 per bay per year to £800 per bay per year:

b)      Increase in the floating car club permit fees

(i)     from £1,400 per year to £1,540 per year for internal combustion engine vehicles; and

(ii)    from £753.20 per year to £1,342 per year for electric vehicles.

2.        Delegated authority to the Head of Highways and Parking to:

a)      carry out all required statutory consultations regarding the proposed changes to car club permit fees; and

b)      make all necessary traffic management orders, having considered any objections received in response to the statutory consultation, to implement the proposed changes, subject to key decisions being considered by Cabinet. 

3.        Noted that future price increases will be considered as part of the annual corporate fees and charges report.

4.        Noted that the additional revenue generated will be retained for monitoring and traffic management order purposes.

Reasons fordecision

The proposed adjustments to car club permit fees are driven by several key considerations, aimed at aligning Haringey Council's fees with market values, ensuring financial sustainability, and supporting environmental goals. The rationale behind the proposed changes is as follows:

Fixed Bay Permit Fee: The proposal to increase the fixed bay fee from £240 to £800 per bay per year is intended to reposition Haringey above at least half of the other boroughs in terms of fee levels, yet still remain competitive. For floating bays, the proposed fee increase is from £753.20 to £1,342.00 for EVs and from £1,400 to £1,540. This increase is necessary to better reflect the market value of these services and to address the financial pressures associated with monitoring and managing the car club operations. By aligning the fee with market rates, the Council can ensure that it recoups the costs associated with managing and monitoring the service.

Financial Sustainability and Service Improvement: The increase in permit fees generally is not only aimed at aligning with market values but also at ensuring full cost recovery. In the absence of external funding for those schemes, the Council cannot continue to subsidise the operators and must use its resources wisely to deliver expand the number of car club bays within the borough, which is a key objective outlined in the Corporate Delivery Plan 2024-26. By implementing these fee adjustments, the Council can ensure that the car club service remains financially viable and continues to meet the needs of residents.

These recommendations are designed to balance the need for fair pricing with the financial requirements of managing and expanding the car club service. They reflect a strategic approach to promoting sustainable transport options. 

Alternative options considered

Alternative options were considered before arriving at the recommended fee adjustments. One significant alternative involved maintaining the current fee structure for both fixed and floating bays.

a)      Failed Tender

Earlier in 2024, the Council issued a tender for the provision of fixed bay car club services. The terms of the tender required operators to cover both a 'monitoring fee' to fund the Council's oversight of the scheme, as well as the full costs associated with the installation of new car club bays. Unfortunately, these financial requirements were deemed too onerous by potential operators, leading to no submissions for the tender. This highlighted the challenge of covering those costs, necessitating a reconsideration of parking permits fees.

b)      Maintaining the Current Fee Structure

An alternative option was to retain the existing fee of £240 per year for fixed bays, and £753.20 and £1,400 for EV and ICE floating bays respectively. However, maintaining the existing fees would require the Council to continue to subsidise the scheme, and this is not sustainable.

In conclusion, while maintaining the current fee structure would avoid imposing higher costs on operators, it would compromise the Council’s ability to achieve long-term objectives related to sustainable transport and car club service expansion. The recommended fee increases strike a necessary balance between ensuring the financial sustainability of the scheme and aligning with the Council's wider environmental and mobility goals.