A small revolution happened in the world of workplace travel on 1 April.

After lengthy planning, disputes with the local business community and struggles to gain Government approval, Nottingham City Council finally imposed a levy on parking spaces provided by the city’s employers for their staff.

All employers with 11 or more parking spaces will be liable for the levy which will be £288 per space per year. This is expected to raise £8 million in 2012/13, which the Council is legally required to devote to public transport.

The levy is scheduled to increase quite sharply – to £334 in 2013/14, £364 in 2014/15, £381 in 2015, and thereafter in line with inflation.

So far employers have registered 45,500 spaces, of which some 28,000 are chargeable.

Nottingham is the first council to introduce such charges despite local authorities having had the power for 12 years.

Everywhere else has faced such uproar from business and motoring lobbies that local politicians have backed down.

But Nottingham says it has no other way to finance three vital pieces of work-related local transport upgrades: an extension to its tram system, a major refurbishment of the main railway station and the Link bus network, all of which serve major employment areas.

The levy will raise part of the money needed, but the City Council also has another objective. Nottingham City Council believes that companies will create green staff transport plans which in turn will stem the growth of traffic congestion.

Most employers are expected to pass the levy cost on to their staff, a move which the council expects will encourage an increase in the use of feet, bicycles and public transport.

Jane Urquhart, the Council’s portfolio holder for transport and planning, says: “The workplace parking levy provides a vital funding stream. Without it we wouldn’t be having two more tram lines, or indeed the railway station redevelopment.

“Many of the major employers in the city are taking proactive steps to introduce parking management schemes. This is helping to slow the likely growth of road traffic congestion while raising money for further investment in our transport infrastructure.”

Public sector employers – including the council itself – are liable to the levy, with the exception of frontline NHS workers.

One such is the University of Nottingham, which did not previously charge for parking.

It will now charge users according to the emissions rating of their car, whether they are a student or staff, and additionally for the latter by pay grade.

This produces a complicated charging structure, ranging from a £44 a year for a student with a car that emits up to 120g of CO2 per kilometre, up to £490 for a senior staff member with gas guzzler emitting in excess of 200g CO2 per kilometre.

A University spokesman said it was “committed to improving transport for its staff, students and visitors and promoting more sustainable forms of transport”, with measures that include free inter-campus buses, bike hire and discounts at cycle stores.

Not everyone is happy. A spokesman for the Derbyshire and Nottinghamshire Chamber of Commerce, long an opponent of the levy, condemns it as “not a business friendly way to pay for transport infrastructure”.

Alliance Boots, one of the city’s largest employers, “continues to be opposed to the tax on car parking which affects around 7,500 colleagues,” according to a spokeswoman.

Boots will part-subsidise the levy, with staff paying between 30p and 70p a day, in proportion to their salary and working time.

A Council spokesman says it feels that businesses want things both ways – supporting the transport improvements but not the means to pay for them.

“Business continues to oppose it. It is not happy, and never has been, but it supports the transport improvements and can’t say how else the money would be raised,” he says.

“Some companies are passing the charge onto their employees who may therefore be thinking about walking, cycling or public transport.

“We don’t think it will solve congestion in Nottingham but the expectation is that some employers will use green travel plans or that employees will decide on other ways to travel.”

Workplace parking levies have crucially lacked a live UK example until now.

Nottingham taking the plunge may inspire other councils to try it.

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