Competitive Cities : The network and long-term impacts of fiscal management of transport demand

Cities compete with each other. For more than fifty years, Public Choice Theory has explored the notion that cities compete to attract and retain residents and businesses. Likewise, the Public Finance & Tax Competition literature identifies competition between cities on tax-and-spend policies. The evidence base suggests 'inter-city competition increases the likelihood cities will pursue a limited strategy versus a balanced or more progressive approach'. In the transport sector, fiscal demand management policies such as road user charging, workplace parking levies and parking charges are therefore issues upon which cities may compete. Both residents and businesses are deeply concerned about the implications of changes to charging regimes. The negative impacts they foresee may in turn influence not only transport decisions, but also (in the long run) location decisions. Thus, there are indirect impacts on the local economy, which provides a stimulus for inter-city competition. Buchan (2008), reviewing policies to combat climate change impacts from transport, concluded that a nationally-imposed parking charge on new developments was necessary, in order 'to avoid local authority fears of destructive competition from neighbouring authorities'. Fiscal management of transport demand is therefore a clear potential source of competition between cities, yet there is little research to guide us on how strong this competition might be, how much of the competitive pressure is real or perceived, and how it should affect the design, implementation and overall effectiveness of fiscal demand management policies. Our research will study the issues surrounding the design and implementation of parking and charging policies looking more specifically at competing cities with the aim to answer the following policy questions :- In what ways do and could cities compete using fiscal demand management policies? How should cities design their policies to achieve individual and collective 'best' outcomes? Should cities consider sharing revenue streams - should they compete or co-operate? How significant are these policies to the redistribution of business and residents between cities? What, if any, implications do the results have for the co-ordination of demand management policies?The research will be based on a mix of in-depth interviews with selected cities and mathematical models of competition between cities covering both short term and long term dynamics and behaviour of relevant stakeholders.

The principal beneficiaries from the research will be :- All local authorities/regional bodies/cities/towns who are considering the use of demand management strategies based on either road pricing or parking policies; The government (via DfT), other national governments and the European Commission; Transport consultants Businesses and the general public. Local authorities/regional bodies will benefit from the development of solution approaches, tools and practical guidance on how best to design fiscal demand management strategies which take into account the actions of their competitors. Improved designs will impact on their competitiveness and encourage growth within their region. Government (via DfT) will benefit from seeing the implications of different regulatory regimes which will directly impact on the welfare of regions. We will deliver policy guidance as well as guidance on methods and tools which can be incorporated into DfT Webtag guidance to local authorities and consultants (as with our previous research into optimal cordon design). Finally businesses and the general public will benefit from reduced congestion, pollutants (and associated health benefits), and from increased economic growth. Our previous research into cordon location demonstrated that incorporating theory into practice can produce significant gains in social welfare - up to 80% over and above the judgmental approach. We envisage similar benefits would transfer to the case of more than one city. Communications and engagement The project will engage directly with local authorities and the Department for Transport. In particular we have the support of DfT in hosting workshops with their network of local authorities and more direct contact through in-depth interviews with 6 local authorities. We will disseminate the results at practitioner based and academic conferences, provide regular updates to DfT and local authorities considering road pricing/parking fees. We will also promote the findings in practitioner based magazines e.g. local transport today, TEC, and at the Transport Practitioners Annual Meeting. We will invite key industry organisations such as the Chambers of Commerce, CBI and the British Retail Consortium to attend our workshops. Our workshops will be held as follows: 1. Discussions of perspectives on city-city competition 2. Validation and discussion of the city decision making model 3. Report on algorithm developments to DfT and consultants and an advanced SATURN course 4. Workshop on MARS developments and case study results 5. Final policy and practice implications workshop to local authorities and DfT (m35) Collaboration We build on our previous collaboration with the Technical University of Vienna on the development of MARS. TUW are working on a link between Vienna and Bratislava which parallels our research. We will also work with Prof Lam and Dr Sumalee of HKPU where Dr Shepherd will act as CI on their forthcoming grant entitled Strategic Modelling for Sustainable Urban Transportation and Land Use Development . Prof Erik Verhoef of FUA will work with us in developing solution algorithms to the initial EPEC problems. Gateshead City Council provide a relevant case study in the issues surrounding the implementation of road user charging and conflicts with neighbouring authorities allowing us to explore the MARS model for the Tyne and Wear area and to engage in detailed reflection on the decision-making processes.. Exploitation and application Algorithms which fit into assignment type models will be covered by our current SATURN licence and associated professional development courses. Guidance outputs will be disseminated via DfT through their Webtag system. We have an IPR agreement with the Technical University of Vienna for the exploitation of MARS and it is now available commercially.