Summary of Appraisal

This chapter summarises the Detailed Appraisal, which quantitively and qualitatively assessed the four shortlisted options for a range of example charge levels, as set out in Section 4.4 against the research objective, deliverability criteria, STAG criteria, Policy Alignment and Sustainable Investment Hierarchy.

The vehicle and emissions reduction estimates forecast are given as a percentage change against a given future situation without charging, rather than as a percentage change from 2019 (as expressed in the wording of the 20% reduction target). This allows the appraisal to focus on the impact of charging only, rather than the other external factors that may also influence trip making (including electric vehicle adoption rates, home-working patterns, land use or changes in technology)

The appraisal process marshals all the available evidence, including the modelled outputs, in order to produce a balanced comparison of the different potential charging options. 

Option Overview

An overview of the quantitative performance of each option against three key criteria points is summarised in Table 5‑1 below:

Table 5‑1: Options Overview

Charge type	Charge (per day for Area & Cordon, per km for Distance)	2030 Car km reduction (compared with 2030 without charging)	Car emissions reduction (CO2e) in 2030 (compared with no charge scenario)	2030 Revenue (in 2022 Q3 prices)
Cordon	£15, £7.50 (discounted)	-16%	-17%	£915m
Cordon	£10, £5 (discounted)	-12%	-13%	£775m
Cordon	£5, £2.50 (discounted)	-7%	-7%	£550m
Area	£15, £7.50 (discounted)	-25%	-26%	£1,300m
Area	£10, £5 (discounted)	-21%	-22%	£1,100m
Area	£5, £2.50 (discounted)	-14%	-15%	£800m
Distance	10p, 5p (discounted)	-26%	-27%	£2,300m
Distance	6.5p, 3.3p (discounted)	-17%	-17%	£1,700m
Distance	3p, 1.5p (discounted)	-8%	-8%	£875m

Note: discounted rate applied only to the lowest income group living within "remote rural" areas within the 6-fold urban/rural classification.

Option Appraisal Summaries

Cordon Based Charging

Research Objective	Implementability (Risk)			STAG Criteria					Policy Alignment	Position in Sustainable Investment Hierarchy
Reduce Car km by 20% by 2030	Feasibility	Affordability	Public Acceptability	Environment	Climate Change	Health, Safety & Wellbeing	Economy	Equality & Accessibility
+	Medium Risk	Medium Risk	High Risk	++	+	+	+	-	++	Makes better use of existing capacity

Cordon-based charging has the potential to reduce car kilometres at a local level. It can be used to target congested areas and re-enforce the roads hierarchy, with positive implications for environment, climate change, health and wellbeing and economy.

For feasibility and affordability reasons cordon charging would be most effective as discrete schemes in congested areas in large town/city centres.

The cost of implementing local road pricing in all Scotland’s Large Urban Areas is estimated between £100 million and £500 million. Cordon charging should be towards the lower end of this estimate given the quantity of ANPR cameras required is less than area-based charging, as only the boundary require enforcement infrastructure. Operating costs for each of the four charging zones is expected to be between 20% and 50% of revenue generated.

Cordon based charging has greater impacts on those living outside the cordon given the potential for diversion effects and equity issues on the cordon boundary, whilst having little impact on those living and travelling solely within the cordon, so can be unfair. This may have implications for public acceptability and depending on the specific geographical characteristics of the area could increase or reduce inequalities.

Detailed appraisal available in section 7.2, in the Supplementary Information.

Area Based Charging

Research Objective	Implementability (Risk)			STAG Criteria					Policy Alignment	Position in Sustainable Investment Hierarchy
Reduce Car km by 20% by 2030	Feasibility	Affordability	Public Acceptability	Environment	Climate Change	Health, Safety & Wellbeing	Economy	Equality & Accessibility
+	Medium Risk	Medium Risk	Medium Risk	+++	+++	+	+	0	++	Makes better use of existing capacity

Area based charging has the potential to reduce car kilometres at a local level. It can be used to target congested areas, with positive implications for environment, climate change health and wellbeing and economy.

Area charging is likely to be implemented in large urban areas with good active travel and public transport connectivity (IPPR, 2022⁴⁰). However, people who live within the area may perceive the charging structure as unfair, since they would have to pay the charge every time they travelled by car. This could be mitigated through discounts or exemptions; however, this would reduce the effectiveness of the scheme and may also be perceived as unfair by those who live just outside the area and regularly travel within the area to access work, education and services.

The cost of implementing local road pricing in all Scotland’s Large Urban Areas is estimated between £100 and £500 million. Area charging should be towards the upper end of this estimate given the quantity of ANPR cameras required is greater than cordon-based charging, as all parts of the charging area require enforcement infrastructure. Operating costs for each charging zone is expected to be between 20% and 50% of revenue generated.

For feasibility and affordability reasons area charging would be most effective as discrete schemes in congested areas in large town/city centres. More sophisticated and cost-efficient methods of local charging could be implemented if supported by national government. However, at present, it is unlikely that all large urban areas would be in a position to implement area-based charging in the timeframe necessary to achieve the required reduction. The Edinburgh City Council Draft Mobility Plan and Draft Glasgow City Council Transport Strategy both indicate a commitment to a 30% reduction in car kilometres and so area charges in these two locations could be considered as more likely. The potential for national scale car reduction and revenue generation of area-based charging in Edinburgh and Glasgow alone, based on the geographical extents shown in Figure 5‑1, are indicated in Table 5‑2 below.

Table 5‑2: Forecast Effectiveness of Area-based Charging in Edinburgh and Glasgow

Charge for driving within Glasgow LA and Edinburgh UR6 Large Urban Charge Zone (per day, 2022 Q3 prices)	2030 Car km reduction (compared with 2030 without charging)	Car emissions reduction (CO2e in 2030 (compared with no charge scenario)	2030 Revenue (in 2022 Q3 prices)
£15, £7.50 (discounted)	-16%	-17%	£800m
£10, £5 (discounted)	-13%	-14%	£700m
£5, £2.50 (discounted)	-9%	-10%	£500m

To produce a reduction of national significance, on the scale shown in Table 5-2, by concentrating on the two areas outlined in Figure 5-1, a disproportionate burden would be placed on Edinburgh and Glasgow. The nationally significant reduction would translate to a much steeper reduction locally and both cities would have to greatly exceed their own stated targets. For this reason, this is not seen as an equitable option. 

Though discretionary powers to implement local charging schemes are provided to local authorities under Transport (Scotland) Act 2001), regulations would need to be put in place to make them enforceable. This would be likely to take up to 18-24 months, with a further estimated 12-24 months for local authority implementation. Earliest enforcement by local authorities would therefore be around 2026.

Detailed appraisal available in section 7.3 in the Supplementary Information.

Distance Based Charging (Variable Rate)

Research Objective	Implementability (Risk)			STAG Criteria					Policy Alignment	Position in Sustainable Investment Hierarchy
Reduce Car km by 20% by 2030	Feasibility	Affordability	Public Acceptability	Environment	Climate Change	Health, Safety & Wellbeing	Economy	Equality & Accessibility
+++	Medium Risk	Medium Risk	Medium Risk	+	+++	+	+	0	++	Makes better use of existing capacity

Distance-based charging has the potential to apply specific charges to use of the road network, directly related to usage. Distance based charging could be tailored to meet the needs of urban and rural communities by varying the rate of charge applied for people living in different locations. It is therefore highly likely to be able to meet the objective of reducing car kilometres, in a targeted and equitable way.

In the long-term, a more tailored variable charge which can be altered according to time of day would require the use of in-car telematics of the type currently implemented within fleet tracking, which records information about driver location, time of travel as well as distance. Test cases exist to suggest that voluntary, incentive-based approaches to introducing telematic tracking could attract greater public support than mandatory systems. For this appraisal, the measure has been designed with lower rates for those classed within the lowest 20% income group and living in a remote rural area and exemptions apply for drivers who have a disability which affects their mobility.

A comparable national scheme for the Netherlands is estimated to have a set up cost of €2.2bn and annual running costs of 250-900m euros. However, implementation costs of a national, distance-based scheme are highly dependent on the way in which it is implemented.

Significant legal work would be required to consider whether any proposals for national pricing are capable of being enacted within the Scottish Parliament’s legislative competence. If primary legislation is progressed, then the earliest enforcement would likely be in 2029.

Detailed appraisal available in section 7.4 in the Supplementary Information.

Distance Based Charging (Flat Rate, Variable Allowance)

Research Objective	Implementability (Risk)			STAG Criteria					Policy Alignment	Position in Sustainable Investment Hierarchy
Reduce Car km by 20% by 2030	Feasibility	Affordability	Public Acceptability	Environment	Climate Change	Health, Safety & Wellbeing	Economy	Equality & Accessibility
++	Medium Risk	Medium Risk	Medium Risk	+	++	+	+	-	++	Makes better use of existing capacity

An alternative means of delivery for distance-based charging is a set mileage allowance with a comparatively high rate for any kilometres over a set allowance. Greater allowances would be applied to lower income groups in rural areas in order to mitigate against the potential inequities imposed by higher costs of driving in the absence of alternatives. Distance-based charging with variable allowances could target those who make the largest contribution to the overall car kilometres travelled but this effect may also be offset by people feeling incentivised to use up any unused kilometres from their allowance. Distance-based charging implemented in this way is likely to be potentially more equitable and more publicly acceptable, but also less effective in reducing car kilometres than the application of a variable rate (as described above). 

Modelling outputs have not been produced for this option explicitly, as it would be a variation of the distance-based, variable rate figures shown in Table 5‑1 and the scale of impacts would be comparable, but lesser depending on the level of free allowance applied.

As with the variable rate option, this option could be implemented either by the use of in-car telematics of the type currently available within fleet tracking, or by regular mileage submissions (similar to meter readings for gas/electricity) paid for on regular basis and verified annually at MOT. Voluntary approaches to telematic tracking could prove more publicly acceptable than mandatory schemes. The close feedback required of any distance-based charging scheme would enable it to be targeted towards specific journeys and could be adjusted for different geographies and user groups depending on the design of the charge.

A comparable national scheme for the Netherlands is estimated to have a set up cost of €2.2bn and annual running costs of 250-900m euros. However, implementation costs of a national, distance-based scheme are highly dependent on the way in which it is implemented.

This option has been designed with an increased ‘free’ mileage allowance for those classed within the lowest 20% income group and living in a remote rural area. Drivers who have a disability which affects their mobility would be exempted from the scheme. The allowance would be applied on the vehicle itself, based on the status of the registered keeper rather than an individual given the administrative burden of differentiating between drivers. The allowance would be in the form of a yearly amount of free miles each vehicle is prescribed. Engine size/emissions could also be used to vary the flat rate charge to help encourage a shift to cleaner vehicles. 

Detailed appraisal available in section 7.5 of the Supplementary Information.