Transport: The mobility and road space management market under Labour
The newly elected government’s King’s Speech represents a strong signal of intent on its ambitions for local, regional and urban transport. This is creating new opportunities for investors.
In particular, the English Devolution Bill sets out Labour’s plan to transfer new powers to local authorities which would impact businesses in the transport sector. These include road space managers, debt collection agencies, parking operators, payment facilitators, software/analytics providers and hardware/infrastructure providers.
The sector will continue to attract investor interest, especially in parking and traffic management. The fragmented market, demand for holistic solutions, and potential for international expansion are attractive attributes creating opportunities for top-line growth and cost synergies.
Technology adoption
Assets are expected to benefit from technology adoption. Rapid rollout of ANPR is increasing the number of fines being issued (a positive driver for landlords, operators and enforcement software providers), and growing demand for cashless payment solutions is driving demand for booking companies and payment facilitators. The National Parking Platform will also go live in October creating a more integrated and efficient parking ecosystem.
However, investors should be aware of major potential policy changes. While the Parking Bill is front of mind, the impact of the English Devolution Bill should be carefully considered. There is scope for companies to help inform their development.
Labour appears committed to devolution
Labour’s plan to standardise powers across authorities is set to impact the transport sector, with potentially significant implications for parking. Here’s how:
- Road space allocation: local leaders could leverage new powers to reallocate road space for buses and cycling, potentially reducing on-street parking availability in urban areas. This shift could drive up demand for off-street parking, benefiting private landlords and operators through higher utilisation. Those offering disruptive solutions (such as pre-book functionality) could also see a surge in demand.
- Adopting overseas practices: parking operators could benefit from local authorities adopting successful international policies. For instance, Paris has implemented ‘dynamic’ parking, where rates vary based on vehicle weight and whether drivers are residents of the city, a model that could be replicated to optimise parking management and again result in increased demand for off-street spaces.
- Expanding enforcement powers: recent extensions of PCN issuance powers (for moving traffic offences) to councils outside of London and Cardiff signals a trend towards increased enforcement capabilities, which is likely to be enhanced as devolution plans are implemented. This would benefit companies providing detection and enforcement services. Local councils are also likely to find it easier to get permission for powers to enforce moving traffic offences. Compared with the previous government, the default will be to devolve unless good reason not to, rather than requiring a lengthy business case to secure Whitehall permission for new devolved powers.
- Maximising revenue: greater devolution is unlikely to coincide with additional funding, therefore local leaders will need to explore existing revenue-raising options. On- and off-street parking could play a greater role in raising funds.
Louise Haigh has recently confirmed plans to abandon the Conservative’s proposals to centralise decisions on local road calming schemes (e.g. 20mph zones, low traffic neighbourhoods). The Secretary of State for Transport’s full support for local authorities who wish to roll-out these measures further highlights the above opportunities and reinforces Labour’s commitment to devolution.
Labour is also determined to improve high streets and boost greener forms of transport, so expect more encouraging of EV charging in car parks and on the street, as well as disincentives to car use and more incentives and infrastructure for public transport, cycling and walking.
Armstrong has collaborated closely with Flint Global to shape our political insights on the sector. For more information, please contact Jack Hibbs (at Armstrong) or Martin Summers or Ed Goodall (at Flint Global).
Jack Hibbs
jhibbs@armstrong-ts.com
+44 7883 296 346