BOROUGH OF POOLE

CABINET

11OCTOBER 2011

REPORT OF THE HEAD OF TRANSPORTATION SERVICES

PARKING INCOMEBUDGET UPDATE– FORECAST OUTTURN END OF

AUGUST 2011

1.Purpose of Report

1.1The end of May 2011 Council Budget Monitoring report identified a projected deficit in the parking income budget of £237,000. This represented a 4.1% deficit against the base budgetof £5.71m.The Head of Transportation Services was requested to report to Cabinet the managerial action being taken to mitigate this additional income pressure to the Council. Since May, the position has worsened with the forecast deficit now £429,000 (7.5% deficit against budget).

1.2Afurther significant pressure of £187,000 has emerged for the unit as a whole due to increased electricity prices while the Statutory Concessionary Bus Fare Scheme (Connect) showed a saving of £105,000 due to lower reimbursement rates for the operators. In accord with monitoring requirements the Head of Transportation has subsequently been asked to outline these additional matters in this report.

2.Recommendations

Cabinet is asked to:

2.1Note the contents of the report and the actions taken thus far.

3. Background

3.1The Council’s base budget for parking income was set at £5.71m. This already includes a rebase of £417,000. The rebase also catered for a £90,000 impact due to the Government’s increase in VAT. The rebase was necessary due to the 2010/11 outturn deficit of £550,000. This was covered in full from savings made within the Transportation Unit while a 2010 internal audit identified that the existing system of pricing was not working.

4.Forecast Outturn 2011/12 & Financial Implications – Car parking income

4.1The table below showsa breakdown of the current (as at end of August) forecast outturn for the parking fee income budget 2011/12.The overall deficit is now 7.5%.

Parking fee income / Original Budget 2010/11 / Year End Forecast Budget 2010/11 / Surplus/(Deficit)
Season Tickets / £448,320 / £437,122 / (£11,198)
PCN Income / £661,400 / £616,400 / (£45,000)
Multi Storey car parks / £2,423,380 / £2,201,251 / (£222,129)
Town Centre and District car parks / £956,630 / £938,942 / (£17,688)
On street Pay and Display / £438,210 / £366,351 / (£71,859)
Beach car parks / £662,420 / £610,169 / (£52,251)
CPZ income / £120,510 / £111,248 / (£9,262)
Total / £5,710,870 / £5,281,483 / (£429,387)
% Deficit/Original Budget / (7.5%)

4.2Previous ERP work undertaken from within the service unit had identified the potential for new parking income streams for the 2011-14 MTFP. These were then included in the base budget for 2011/12 with the position clearly noted in the budget book that not all of the base assumptions had received approval.

4.3Members of TAG at the 28 July 2011 meeting were however unable to agree with all of the officer recommendations given the current economic climate. The subsequent Portfolio Holder decision on behalf of Cabinet has now resulted in only £64,000 of the anticipated £182,000 income streams receiving approval. A £118,000 shortfall in expected income for this financial year (2011/12) has therefore now resulted. The forecast deficit already includes for this position as well as £55,000 of schemes approved in base budget but with delayed implementation dates.The total reduction in forecast income when compared to officer proposals as put forward for the three year MTFP period is forecast to be in the order of £407,000.

4.4In recent months there has also been a further downturn in customer based parking income with the majority of the deficit against base budget targets (in order of significance) being from Multi Storey Car Parks (MSCPs); On-street pay display; beach car parks and PCN income.

4.5Parking income fromthe four Multi storey car parks has fallen by 3.6%(to end of August) when compared to the same period for 2010 with the number of tickets having decreased by 13%. This is clearly a reflection of the general economic situation and although subject to a price increase in September 2010 it is felt that the parking charges forPoole town centre remain competitive compared to other relevant Authoritieswhile reflecting the current retail offer available.

4.6Town centre surface car parks parking income was 7% lower by end of August 2011 compared to the same period for 2010 while district car park income was 16% higher. Although not certain until customer surveys can better confirm the position it is suggested that more local residents are shopping locally rather than in town. This activity is likely to be due to less household spendas well as the general attraction of the town centre when compared to other shopping centres in the wider area. The success of the statutory Concessionary Bus Fare scheme is also influencing parking income levels as more people in general are travelling to town by bus.

4.7The figures in the table below show the current comparison of prices (including approved increases due to be implemented in October 2011)

Key town centre car parks (Multi-Storeys) / Up to 1 hour / Up to 2hours / Up to 3hours / Up to 4 hours
Dolphin & Shoppers 1&2
High Street
Quay Visitors (winter rate)
Quay Visitors (Summer rate) / n/a
80p
80p
n/a / 1.60
1.60
1.60
1.60 / 2.70
2.40
2.40
2.40 / 3.60
3.20
3.20
3.20
Poole Hospital MSCP / n/a / 1.80 / 2.70 / 3.60
Bournemouth MSCP Richmond Hill / n/a / 3.90 / n/a / 7.90
Bournemouth MSCP Avenue Road / 1.20 / 2.40 / 3.60 / 5.00
Weymouth MSCP / 1.30 / 2.60 / 3.90 / 5.20
Salisbury (Old George) MSCP / 1.50 / 2.20 / 4.20 / 4.60

4.8As reported on previous occasions the factors resulting in reduced income are complex with poor weather continuing to heavily influence whether the parking budget balances each year. For example, after an unusually warm spell in April 2011, the beach and on street parking income had increased by 120% and 60% respectively when compared to the same period in 2010. Since then August has seen a very low number of sunshine hours reducing the expected level of activity in beach car parks and resulting in a deficit position for this element of the service at present with income actually lower than this time last year.On Street parking income is at a similar level to that in 2010.This illustrates the continued volatile nature of the income accrued to date as well as our ability to provide an accurate forecast of the future position.

4.9In contrast beach season ticket income has increased by 7.5% compared to the same period in 2010. This is likely to have been influenced by the reintroduction of blue badge holder charges in beach car parks but may also be a sign of some residents seeking out better value through the use of a season ticket.

4.10Major effort has been made to adjust the PCN operation through efficiency measures. This takes time to implement and has created major savings in the past and shall continue to do so this year. Such measures have already all been included for in the base budget. At present the number of PCN’s collected has increased over time despite our planned approach to reduce the number of CEO’s on the street. Similarly moves to provide greater efficiency in the administration of the service have already been made.

  1. Proposed Actions

5.1This section outlines the actions already being taken to address the forecast parking income deficit of £429,000 and suggests further action for the future.Again some are subject to further Member approval before they can be enacted upon.

5.2Members were made aware of the financial position for the Unit at July TAG with further key “invest to save” proposalsmade. After long discussion thesewere also rejected. These related to charging for parking (from April 2012) at more on-street locations adjacent to the beach where demand clearly exceeds supply. Officershad successfully worked to identify a funded strategy to help overcome major pressures ahead through an investment from within Unit.

5.3In December 2010, the council’s internal auditors completed their review of parking services and their report with recommendation on potential further cost savings. It suggested an upward review of season ticket and permit charges.In response officers also developed a more sensitive approach for town centre charges while seeking to charge more where there is a proven excess demand for beach parking. Much of the strategy was however rejected via TAG after detailed debate without an alternative having been agreed.

5.4A strategic review of Car Parking is now planned for 2012 given Member concern over the worsening positionand with recognition that the financial position is something out of the direct control of the Unit.

5.5Cabinet hasalready indicated that income target levels for 2012/13 shall not be subject to any further increase. This will help in the medium term but is not sufficient to overcome the likely deficit given the current trend against required budget targets either in the future and does not help towards the current in year position.

5.6Parking Surveys

5.6.1It is proposed to undertake a bi-annual car park survey to understand more about the way customers use the car parks and identify in more detail :

  • the peak and off peak usage pattern,
  • the number of commuters, shoppers, blue badge holders and permit holders using car parks,
  • identify better how car parks are currently being effectively utilised.

5.6.2This will now form part of a strategic parking review report to be undertaken by an independent parking consultant. A business case for the review has been prepared for presentation to Change Management Board in October 2011.

5.7Parking Efficiency Review Report (ERP)

5.7.1In October 2010, the parking services manager completed an ERP for parking services which has identified operational areas to reduce costs and increase parking income. The cost savings identified follow others made in previous years and are now being implemented.Although expenditure savings and improved efficiency working methods that were identified in 2010/11 are being implemented to offset the expected ongoing pressure there is a limit to the amount of savings that can be progressed and this reduced marginal return position has now been reached.

5.7.2These savings have included:

(i)a reduction in parking staff posts by 15%,

(ii)reduced maintenance repairs by 5%,

(iii)and reduced vehicle maintenance costs by 40%.

5.7.3Overall, £179kof operational savings have been made in 2011/12 and are already included for in the base budget. Further operational savings are to be implemented in 2012/13.

5.8In June 2011, the council introduced pay and display in the Lighthouse Multi-Storey car park. This is expected to raise an additional £20k in 2011/12.

5.9The introduction of mobile enforcement has also been funded from within the Unit to overcome school based parking issues around the borough. Approval via the TAG process also allows use of the mobile vehicle to enforce against inappropriate parking at bus stops, loading bays and taxi ranks. Although only just launched for the school based campaign officers shall now arrange through Portfolio Holder discussion for the use of the mobile unit elsewhere around the borough network at locations listed above. This would also help with the current deficit position albeit unquantifiable until our action progresses.

5.10Although it is now unlikely that further price increases would be forthcoming until after the strategic review has concluded officers are seeking out further ways of overcoming the worsening position. If acceptable to Members it could be feasible for those pricing elements already approved in readiness for implementation in April 2012 to now be brought forward to January 2012. TAG has debated this month whether this is feasible with the overall view being that we consider the detail further for October TAG to discuss the matter further before any action is taken. The debate was heated and Members were informed that this action alone would be likely to provide a saving of £10,000.

5.11Further work within the Unit is seeking to identify further savings from contingency now unlikely to used.

5.11In the meantime further price measures have been identified and approved by July 28thTAG for future years and it is forecast that these would result inadditional income of £115,000 for 2012/13 and£60,000 for 2013/14.

  1. Other Forecast out-turn variation within Transportation Services

6.1Of the £187k pressure on electricity, £164k is due to inflationary pressures (i.e. the increase in the unit rate between this year and last year). There is an earmarked reserve this year which will be made available for such inflationary pressures. The balance of £23k is due to increased consumption and therefore not funded by the reserve. This will need to be met from within Unit although some is due to corporate projects.

6.2The forecast saving for Concessionary Fares is due to the lower reimbursement rate. However this estimate is only based on limited ‘actual’ data made available by the operators. The forecast shall be updated once information is forthcoming. Members should note that one of the operators is appealing against both Poole and Bournemouth Councils in relation to the Concessionary Fares Scheme.

  1. Conclusion
  2. The current £429,000 forecast deficit for parking incomeincludes £173,000 of unapproved or delayed schemes leaving £256,000 of the deficit as a result of other reasons, e.g. weather, economic factors. The summer period has seen a significant worsening of the position while there isevidence that external factors such as the weather couldfurther affect the final outturn for 2011/12.
  3. The revised parking charges proposals taken to TAG in July 2011 increase income in 2011/12 by £64,000,in 2012/13 by £115,000 and in 2013/14 by £60,000.Cabinet has also responded by helpfully indicating that income targets shall not increase in 2012/13.
  4. Plans to survey car park usage will help provide an updatedunderstandingof the peak and cyclical patterns of the parking income budget ready for the forthcoming Strategic Review of Parking.

7.4Traditionally the Transportation Unit has covered the deficit in parking through its own savings in year. Despite a current saving of £105,000 from the concessionary fares scheme, the position is proving difficult given increased contractor costs that the Council is already committed to. The application of corporate reserves for the specific reasons they were set aside results in a net £269,000 pressure at the end of August. The main cause is parking fee income.

7.5Many factors have resulted in the current deficit. Those within control of the Service have been considered with action taken already to help redress the balance. Further work within Unit will also progress during the year in consultation with the Portfolio Holder and Strategic Director to help seek out further ways of improving the financial position.

Julian McLaughlin

Head of Transportation Services

September 2011

1 APPENDIX A12