The country has been in the throes of a major debate on transport policy for several years now. This started when the previous government realised that the implications of the "great car economy" were unacceptable in terms of public finance and of the environment, and will soon come to a climax with the publication of John Prescott’s Transport White Paper. Protagonists have ranged from Swampy and the eco-warriors, to the prosperous middleclasses who on the whole have become comfortable with car dominated development. However, along with increasing numbers of other people they now realise the true cost of supporting such a policy. Opinions do not fit into conventional political pigeon-holes.

The length of the debate has been matched by a lack of decisive action. Hopefully this will shortly be corrected by the White Paper. The debate, and the difficulties, revolve around the role of the motor car. The automobile has become a fundamental part of our economy and our society, but we are unable to cope with its consequences.

Urbanised areas throughout the developed world are being faced with ever increasing problems in managing the growth in the demand for movement, both of people and of goods. The upward trend in the use of private cars and road freight appears relentless, giving rise to a vicious circle of economic, environmental and social damage.

These impacts operate at global, national and local levels. At the European level the overall external costs of transport - including congestion, accidents, air pollution and noise - have been estimated in the European Commission’s Green Paper "Fair and Efficient Pricing in Transport" at around 150 billion ECU per year - 4% of the GDP of the EU. At a more local level, the cost of congestion alone for a city the size of Edinburgh, based on research for the Automobile Association, could be around £2,000,000 per day. Not quantified in these kinds of figures are the effects of increased car use and car dependency on social exclusion. As business, shopping and other activities are increasingly located in places that are very difficult or expensive to reach by public transport, people without access to a car are increasingly excluded from opportunities, including jobs.

These problems cannot be solved by providing additional roadspace. Not only is the burden on the public purse is too high, but even more importantly the environmental and social impacts of major road construction in densely populated countries are becoming unacceptable to public opinion. It is also now understood that even if additional roadspace is provided, this simply generates even faster growth in traffic. Car use continues to grow faster than GDP - and faster in the UK than in most of western Europe. In 1950 there were 4 million vehicles on Britain’s roads. Now there are 25.6 million.

All these trends have led the former Conservative Minister of Transport Steven Norris to say recently: "People think they have a civil right to drive where they want; that is a civil right which has expired". The impact that the individual has on the rest of society has become too severe.

What is described above is a situation in which transport supply and demand are severely out of balance, and in which social and environmental impacts are not reflected in the transport decisions of individuals and businesses. Not only does this affect the transport system directly, it also has indirect consequences through location decisions and even employers’ remuneration policies.

Road users are not subject to the price signals that the consumers of most products receive. Even in the transport field itself, public transport users know that they are likely to have to pay more to travel at peak times or to use high quality infrastructure. Much of the transport debate has focused on how to correct these signals so that transport user choices, and transport investment decisions, are based on their impacts on the community at large in terms of economic, environmental and social objectives.

There are a number of approaches that can be adopted, based on pull and push measures:

1. Integrating planning of transport and the use of land, buildings and public space. This affects the demand side of transport, potentially reducing people’s need to travel in order to carry out the activities they wish.
1. Provision of better public transport, and improved conditions for cycling and walking. Treating the pedestrians as valid transport units and giving them due place in the transport system. This impacts on the supply side of transport, aiming to attract users to these modes through higher levels of service, quality and safety.
2. Management of road space. Physical management of the road network can alter the level of service available for different modes, for example by providing exclusive bus or cycle lanes. Otherwise the road network provides an undifferentiated level of service to efficient or inefficient modes.
3. Fiscal and regulatory measures. These can clearly affect both supply and demand, and be applied in a wide variety of ways to produce a sustainable framework for transport.

None of these measures alone can solve the problems we face. Experience shows that good public transport on its own, for example, is not enough to get people out of their cars. Paris has an excellent public transport system by international standards, yet its traffic remains in a state of crisis. A rational and comprehensive package of complementary measures is needed.

Many local authorities have been working hard to put measures in place to try and overcome the effects of these trends. In Edinburgh, we have introduced a comprehensive package of measures to redress the balance between different types of road users; to reallocate roadspace to ensure that this scarce resource is used as efficiently as possible rather than being overwhelmed by the most inefficient user, the motor car, and to improve the environment of the city for the benefit of everyone living and working there as well as for visitors.

The Council has a degree of jurisdiction over the first three of the types of measure listed above. But we are not able to act alone. The critical missing link has been a national fiscal framework that supports efficient transport. The Department of the Environment’s 1996 Report on "Indicators of Sustainable Development" suggests that the cost of motoring has declined in real terms by 10% between 1974 and 1994, whereas the price of bus travel rose by 50% and rail travel by 70%. As a local authority, we are unable to significantly influence these price signals.

Finally, financial resources are needed to provide high quality alternatives to the car use. Availability of public funds continues to decline, although it is clear that to achieve sustainable transport objectives against a trend of economic growth and increasing car ownership requires more not less investment. If central government do not fund realistic levels of local transport investment directly, then the only alternative is for local authorities to be given additional powers to raise and use revenue at the local level. Cities throughout the world that have made major transport investments have usually done so through a mix of central government funding, private investment, and local taxes such as sales and payroll taxes.

The lesson has certainly been learned on the other sides of both the Channel and the Atlantic, where cities have discovered investment in public transport has helped regenerate city centres and reduce the problems of excessive car traffic. Table 1 shows just a few cases, and the recent EU paper on the "Citizen’s Network" highlights many specific examples of good practice. The commitment of many countries to public transport investment is also illustrated by the overall levels of investment in rail shown in Table 2.

The sums for urban transport investment being found in these countries are simply not available in the UK. The overwhelming need for such investment gives substantial weight to the argument for new pricing mechanisms that can then meet objectives of both restraining car use and funding good alternatives.

There are two specific new measures that could change this that need particularly serious consideration with respect to the government’s White Paper:

• Road user charges
• Charges/taxation on privately owned car parking

For such new revenue-raising powers to be publicly acceptable, and to achieve the objective of a better transport system, there are however two essential prerequisites:

• Acceptance of the principle of hypothecation by both central government and local authorities - by the former to give local authorities control of the revenues raised; by the latter to ensure the funds are used for transport rather than other local authority services.
• Acceptance of the principle of additionality, again by both central government and local authorities - ensuring that the funds raised are not simply substituted for other sources of funding.

Road user charging has been discussed at length over the years. Economic theory tells us that efficient use of roadspace means pricing at the point and time of use - a concept that is now close to being technically feasible. However, it is a major political step to take - efforts to introduce road pricing in the Netherlands a few years ago brought down the government.

A key principle if such problems are to be overcome is perhaps that the investment in providing better alternatives to the use of the car must be seen to be linked to the imposition of new charges on car users. This is likely to mean borrowing against a future revenue stream to carry out at least some up-front investment. This cannot be achieved by the public sector on its own - government will not accept local authorities borrowing on a large scale against a future revenue stream. The only practical way forward appears to be a Public-Private Partnership arrangement (PPP) where this borrowing requirement is transferred to the private sector. A concession would be let to a private-sector led consortium consisting of an agreed package of projects and the powers to collect and keep a revenue stream to pay for the package.

However, a considerable amount of work will be necessary even to define what such an arrangement would consist of; this would need to be followed by lengthy and detailed development work leading eventually to procurement of the implementation package. The resources required to undertake all this development work are themselves likely to be beyond the scope of many local authorities, and take quite a number of years. Innovative ways of developing such projects may have to be found.

Road user charging is not therefore a solution that can be widely introduced in the short term, and other fiscal measures may be needed that manage choices more indirectly. Charges on private non-residential parking may well come into this category.

Management of the cost and supply of car parking is already one of the major tools that is already available to local authorities to influence travel choices within cities, particularly city centres. Yet local authorities have no control over privately owned parking spaces. This presents a major obstacle to the effectiveness of transport policies. In Edinburgh, for example, we have around 10,000 such parking spaces in non-residential use in the city centre. By comparison, there are 2000 on-street residents spaces (for which permits are required), 3600 on-street paying spaces available to the public generally, and 4600 parking spaces in public car parks of which a proportion are reserved for contract parking for businesses and therefore in effect in private use.

Private non-residential (PNR) parking is therefore a very significant element in the parking supply available to commuters into the city centre. There are no price mechanisms or length of stay limitations of the kind that exist for public car parking off- and on-street and hence no constraint on the use by commuters of these spaces. PNR parking is a major contributor to the peak hour congestion experienced in the city.

The argument also extends beyond the city centre. Traffic growth is fastest in outer suburban and edge of town areas, and this is where measures to bring about a closer relationship between traffic generation and the environmental and social costs caused, is perhaps particularly difficult. New developments are taking place with huge amounts of parking provision, far more than exists in city centres, but with little or no public transport.

Taxation of these spaces or their users could I believe help to correct this imbalance and relate more closely the provision of such a facility with the economic, environmental and social costs that its use imposes upon the rest of the community. It would provide incentives for employers to consider the travel requirements of their business and the commuting needs of their employees in making locational decisions, in considering the payments they make to employees for using (and parking) cars, and on the quality of environment they offer to their employees and indirectly to their customers. In this respect it is a progressive charge.

The inefficiencies of the transport system damage economic competitiveness. As both corporate and individual transport users, we need to accept that road transport will cost us more, and that this will reduce the cost on society as a whole, and improve competitiveness. The decisive step needed to start to tackle the "transport problem" is for government to bite the bullet and introduce new fiscal mechanisms to bring user prices closer to costs that also allow for an appropriate level of investment in the much needed alternatives.