Radical or rational? Is there an argument to stop roads being free to use?
November 15, 2022
The future of UK mobility needs to be sustainable, equitable and resilient. Here, Â鶹´«Ã½¡¯s David Bowers, examines a radical but rational way to rethink our roads.
How much does it really cost to use a road? Today, many drivers might claim it¡¯s free. During a typical car journey this is certainly how it can seem ¨C with the increasingly painful costs occurring only during a trip to a petrol station or an EV charger.
However, this isn¡¯t really the case if we look deeper, below the surface. The costs of providing the actual road obviously go far beyond the personal cost to the driver, adding up to increasingly vast sums in terms of construction, maintenance, and land lost to tarmac, as well as environmental impacts on a local and global scale.
With the delivery of new road schemes being reviewed as part of attempts to balance government finances and reflect environmental impacts, is it a good time to rethink our current approach to the delivery and maintenance of new and existing roads?
As we plan transport routes for the future, do we need to revisit the concept of toll-free roads to balance overall costs and reduce impacts? This concept might be a little uncomfortable to think about at first, but there are some interesting factors to consider.
Now drivers and cars are easily tracked through GPS and smartphones and this would help solve the time-and-distance challenge in delivering road pricing.?
How else could roads be funded?
For decades, economists have argued that users of any scarce resource, such as a road, should be charged at a rate which reflects demand. On roads, this would typically mean higher costs during morning and evening rush hours and lower costs at other times, much like we see across the rail network.
Although it might seem radical, the ideal scheme for an economist would therefore be to charge drivers for the distance travelled based on the time of day of each journey.
Twenty years ago, the benefits of road pricing to manage (and reduce) car use were well understood but the technology wasn¡¯t available to deliver a time-and-distanced-based scheme. This meant that road pricing schemes such as London¡¯s Congestion Charging Zone delivered in 2003 relied up on simpler zone-based arrangements.
Things have moved on a lot since 2003. Now drivers and cars are easily tracked through GPS and smartphones and this would help solve the time-and-distance challenge in delivering road pricing.
Is there enough incentive to introduce change?
While suitable technology is now available to implement this type of scheme, we need to be realistic. Although economists may love this concept, it is likely to be very unpopular with the public and in turn with politicians. After all, who would want to pay for something which is currently ¡°free¡±, especially during times of economic hardship.
So, politicians will need a monumental incentive for end-users to transform the way we pay for roads. So, could that incentive come from the shift to electric vehicles?
This is causing an increasing reduction in fuel duty revenues being received by the government ¨C leading to a potential annual funding gap of ?35bn ¨C a value large enough to get the attention of the Treasury.
A steppingstone to the delivery of road pricing could be to build on the work we have been doing on existing toll roads such as the M6 Toll in the UK.?
One solution to fill this widening fiscal hole could be to replace fuel duty with road pricing. So how can we persuade road users that this is an idea which wouldn¡¯t impact them as much as they think? One way could be to get drivers to better understand how much they already pay in tax (i.e. fuel duty), just to drive along a road ¨C and use this as a starting point to transition to a road pricing scheme.
Discussions in the media around the time of each Budget tends to focus on the relative change of fuel duty (e.g. the 5p per litre reduction announced in Spring 2022). But the actual rate is not widely known (It¡¯s now 52.95 pence per litre for unleaded petrol) ¨C and rarely considered is the fuel duty cost per mile travelled - approximately 5p.
The key would be getting drivers to understand that roads are not ¡°free¡± to use currently, but typically cost them five pence per mile. A government-led communications strategy could reinforce this, potentially helping lay the groundwork for a shift to a system which charges drivers between 0 pence and ten pence per mile depending on time of day.
A steppingstone to the delivery of road pricing could be to build on the work we have been doing on existing toll roads such as the M6 Toll in the UK. Â鶹´«Ã½ has been helping the toll operator to develop new technology to collect tolls and manage traffic flows and this could help provide a test-bed for new approaches to charging for road use.
Politicians will need a monumental incentive for end-users to transform the way we pay for roads. So, could that incentive come from the shift to electric vehicles?
Helping encourage a shift in behaviour
As well as filling the fiscal hole caused by the move to electric vehicles, road pricing will give transport planners an additional tool to manage the many ¡°costs¡± of car use, helping encourage people to re-time their journeys or make better use of public transport, cycle or walk.
So, to help manage the shift to the new transport environment provided by electric vehicles, should the government be doing more now to lay the foundations for a new road pricing system which plugs the revenue gap and helps manage traffic demand and environmental impacts - helping satisfying economists, the Treasury, and drivers?
What we do know is that the future of mobility in the UK needs to be smarter, more resilient, and equitable. Any changes in the way people use roads has to benefit them directly in the long-term.