This paper examines the introduction of an innovative finance measure to support the implementation of a large-scale infrastructure project in the city of Nottingham, UK. This project, the expansion of the city’s light rail network, was completed in August 2015 and was, in part, facilitated by the hypothecation of funds from a Workplace Parking Levy (WPL), introduced in 2012. The WPL was introduced with the main purpose of contributing to the costs of this project and, whilst the use of the WPL was planned prior to the 2007/08 financial crisis, it’s subsequent use in Nottingham helped deliver a large-scale project at a time when the city was faced with significantly constrained budgets and limited investment. In this paper, we seek to examine how the WPL can be used under conditions of austerity to help finance infrastructure projects. The raising of funds through such a mechanism was novel in the UK and it was faced with many barriers within the city. Studying the introduction of the WPL through the lens of city sustainability, we explore how issues of sustainability (economic, environmental, and social) were mobilised to generate support and justification for the use of a potentially contentious policy. Drawing on interviews with key stakeholders (including experts and businesses) we discuss the key factors supporting the introduction of the WPL and how sustainability concerns are positioned within this. Lessons from this are valuable in understanding more about how infrastructure finance works under austerity, but also how sustainability challenges are positioned within this context, when the political, social, and business ecosystems of the city have been shifted.

1. 1Urban Transitions Global Summit 2016
Infrastructure finance under
austerity: Insights from the
Nottingham Workplace Parking Levy
Stephen Parkes
School Of Geography, University of Nottingham, UK
@sdparkes / stephen.parkes@nottingham.ac.uk
Pelin Demirel
Southampton Business School, University of Southampton, UK
Sarah Hall
School Of Geography, University of Nottingham, UK
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2. 2
Introduction
• This work is framed within the emerging literature addressing the
‘financialisation of infrastructure’ being increasingly observed in
cities
• We set out to explore a number of questions:
– How does the unique introduction of a novel funding measure (the
Workplace Parking Levy) fit within the changing infrastructure finance
context?
– How are city sustainability issues incorporated into the arguments for
and against such measures, and how does the type of infrastructure it
funds affect this?
– How can this help cities transitioning towards more sustainable and
resilient futures, even in the face of increasingly constrained budgets?
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3. 3
The financialisation of infrastructure
• The fiscal capacity of the public sector to build and maintain new
and existing infrastructure is no longer sufficient (O’Neill, 2015)
• The increasing financialisation of infrastructure has emerged as a
solution to this ‘infrastructure finance gap’ (ODG, 2015)
– Public-Private Partnerships / Private Finance Initiatives are an example
of this but have been viewed negatively in various sectors (Engel,
2012; Whitfield, 2010; Koppenjan, 2005)
• Concerns about the increased control of private finance over public
infrastructure that financialisation leads to (O’Neill, 2015;
Theurillat & Crevoisier, 2013)
– The goals of finance being placed above other social and economic
goals (e.g. the needs of the local area)
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4. 4
Infrastructure finance under austerity
• Austerity policies and fiscal consolidation have contributed to a
shift in how infrastructure projects are being financed (O’Brien &
Pike, 2015)
• At the city level this issue has become particularly pertinent
(Meegan et al, 2014; Peck, 2012) as cities seek to improve their
economic outlook whilst faced with constrained budgets
• This context drives an agenda of utilising alternative measures of
finance, although not necessarily new finance measures
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5. 5
Contributing to the debate
• Understanding infrastructure finance at the city level
– The integration of state and private finance into infrastructure finance
– How do ‘alternative’ finance measures fit into this debate
• Sustainability interrelating with infrastructure finance
– The ‘mobilisation’ of sustainability arguments to drive innovations in
infrastructure finance
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6. 6
The case study
Nottingham, UK
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Source: Turner (2014)
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7. 7
Nottingham and its Economy
• One of eight ‘core cities’ in the UK; a population of 314,300
• In addition, the surrounding urban area outside the city boundary
(Greater Nottingham) takes this figure to 694,839
• Historically a manufacturing-based economy
– Recent diversification into advanced-technologies and service industries
– City has experienced cuts to budgets resulting from UK Government
spending cuts
• Has experienced particular problems from congestion on the road
network in recent years
• The elected City Council is predominantly members of the Labour
Party
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8. 85-9 September 2016, Shanghai, China
Light rail in Nottingham
• Phase 1 (opened 2004)
– 14.4km in length; 23 stops
connecting the city centre and
Hucknall in the North
– Private Finance Initiative (PFI)
funded (~£200M)
• Phase 2 (opened 2015)
– 17.5km in length; 28 stops linking
areas of Chilwell and Clifton with
the centre
– Cost of £570M (PFI)
– Local authority required to
contribute 35% of this
Phase 2
Phase 1
Source: Nottingham City Council (2011)
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9. 9
The Workplace Parking Levy (WPL)
• Introduced in the UK Transport Act 2000 and further developed in
the UK government’s ‘Workplace Parking Levy (England)
Regulations 2009’
• Nottingham are the first to adopt it in the UK and have used it, in
part, to fund the Phase 2 tram development
– Presented as part of a wider set of measures to address congestion
• WPLs have also been implemented in Australia (e.g. Sydney and
Melbourne) and Canada (e.g. Vancouver)
• Also increasingly being considered in the UK
– Cambridge currently assessing its potential
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10. 10
The Workplace Parking Levy (WPL)
5-9 September 2016, Shanghai, China
Key attributes
of WPL in
Nottingham
Premises with 11+
parking spaces
eligible to pay
It is the employer
who is liable to pay
All businesses are
treated the same
(emergency
services exempt)
Paid annually (£379 per
space in 2016-17)
Began in Nottingham
in 2011
Urban Transitions Global Summit 2016

11. 115-9 September 2016, Shanghai, China
Nottingham
City Boundary
Source: Nottingham City Council (2016)
The Workplace
Parking Levy
charging boundary
Urban Transitions Global Summit 2016

12. 12
Methodology
• 11 semi-structured interviews with stakeholders in Nottingham
• Targeted both experts and business, including:
– Experts: Tramlink (PFI consortium), Nottingham Express Transit (the
tram), the City Council, Chamber of Commerce
– Businesses: A mixture of large and small employers in the city, who
responded in different ways to the WPL
• Analysis was guided by a focus on three pertinent questions...
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13. 13
Methodology
1. How does the unique introduction of a novel funding measure
(the Workplace Parking Levy) fit within the changing
infrastructure finance context?
2. How are city sustainability issues incorporated into the arguments
for and against such measures, and how does the type of
infrastructure it funds affect this?
3. How can this help cities transitioning towards more sustainable
and resilient futures, even in the face of increasingly constrained
budgets?
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14. 14
Emerging themes
In an age of austerity, the WPL leveraged substantial
additional funds for the city
“Well it's enabled Nottingham to pursue those major projects and continuing
things that it was already doing, that I don't think it would have been able to
do without that. I don't know where it would have got the money from…”
Former senior Nottingham tram employee
“It leveraged in a huge amount of external funding…that allowed us to build
the tram system. Without it, it couldn’t have been done.”
Nottingham City Elected Councillor
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15. 15
Emerging themes
Political stability in the city is particularly important
“Politically it [the WPL] was deliverable…You know the business community did
not like a tax on business, funnily enough, and were we to have a much wider
[city] boundary it probably would have been more difficult because you would
have had more people who were of that mind-set within the voter catchment.”
Nottingham City Elected Councillor
“…ultimately it was reluctant acceptance because they [the employees] knew
there was nothing they could do about it, it was something we had to do…but I
think they looked at it, as did the directors, that it’s quite unfair…”
Medium sized service industry firm
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16. 16
Emerging themes
It’s about what you are funding
“…it would be more difficult for councils to introduce the WPL just to fund day-
to-day transport investment. I think it’s much more understandable to the
general public if you’re using the WPL to pay for a major, perhaps out of the
ordinary, transport investment”.
Current senior NET employee
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17. 17
Emerging themes
Emphasising the economic arguments for the
infrastructure
“…in a city its [transport’s] main purpose is to get people to work, or get
people to shops, businesses and so on. And so it's a means to that end…the
economics are what benefits from the transport improvement.”
“You get better business, easier to recruit, more people coming in to shop,
more firms coming to Nottingham, more money into the local economy, more
people can spend money, multiplier effect.”
Former senior Nottingham tram employee
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18. 18
Emerging themes
But also the environmental and social arguments of the
infrastructure
“…it makes the city feel more connected and integrated.”
Nottingham City Elected Councillor
“…it’s [the tram] clearly having an effect because I think it’s opened up
corridors in the city that were otherwise unserved or poorly served by public
transport”.
Director of Sustainability at a large Nottingham employer
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19. 19
Conclusions
• This represents the potential for a shift in how infrastructure
funding might be approached
– Increased influence/control for the local authority?
• An attempt to mobilise sustainability arguments for the
infrastructure to foster support for the contentious funding
mechanism
• The ability to leverage such additional funds is valuable,
particularly in austerity conditions
• However, context is crucial:
– The type of infrastructure being funded
– The political stability in the city
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20. 20
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Funded by the Leverhulme Trust

21. 21
References
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f
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Infrastructure Complexity, 2(3), 1-9.
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References
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