Newcastle faces a £2.5m parking shortfall

Busy car parks like those at Eldon Square and Dean Street have been a major money-spinner for Newcastle City Council for years, with the authority’s parking services raking in around £9m in annual profits before the pandemic struck.

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But the reduction in demand for commuter parking spaces while many people continue working from home has left the council facing a major pressure on its budget.

Latest predictions suggest that parking will generate around £2.5m less than expected for the council in 2021/22.

And there are significant concerns about the cash-strapped local authority’s reliance on car parks as a source of income, with home working here to stay for many and the region’s leaders pushing for a major reduction in car journeys under plans to slash carbon emissions.

Christine Herriot, the council’s director of operations and regulatory services, told councillors that bosses “will have to come up with a longer term parking strategy” and that changes could involve moving where car parks are located.

David Hall, the assistant director of operations and parking services, added car parks that are popular with shoppers had recovered well since lockdown ended – but others had not.

He told the council’s finance and budget scrutiny committee: “The commuter car parks on the periphery of the city centre are not doing as well. 

“That is due to the fact that not everyone is back in the office five days a week, so the season tickets we would sell are not going.”

Mr Hall said that parking income was “massively affected” by the pandemic, but that he is “optimistic” that the situation will improve in the coming months – with a boost in city centre footfall expected in the run-up to Christmas.

Committee chair and the city’s deputy Lib Dem opposition leader, Colin Ferguson, warned that there was a “tension between parking as a revenue stream, as it has been for a number of years, and the countervailing pressure to reduce car journeys in the city”.

Mr Hall said that council parking chiefs “appreciate that we have some pressure coming”, adding: “We have to look at how we transform the parking offer and maximise internal efficiencies. As technology changes, we have to look at how we invest in that to make sure that our costs reduce as our income reduces.”

Projections from the end of the first financial quarter of this year state that the council’s income from car parking is expected to be £6.4m – well below the £8.9m budgeted for.

All council car parks in the city were made free to use during the first Covid lockdown last year, before that offer was axed as the council said it had cost it £1m.

Some areas, including Grey Street, also had parking spaces removed in order to widen pavements and create safe social distancing space for walkers and cyclists.

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