The air we breathe

The UK Government's commitment to improving air quality is leading to an increasing number of locations implementing clean air zones.

London's Ultra Low Emission zone was the first zone introduced in the UK in 2019 and is being extended next month, with the North and South Circular Roads forming the boundary. The impact of the existing zone is clear, with a 44% reduction in NO2 levels. Bath and Birmingham have followed London’s lead, with Clean Air Zones launched in March and June respectively, and are to be joined by Portsmouth in late 2021. More locations are expected to follow in the next year, although so far only London and Birmingham have extended charging to drivers of non-compliant privately owned cars to maximise the environmental impact of the zones.

The need for action is clear with air pollution linked to one in 19 UK deaths: the aim of the zones is to not only improve air quality and health but also to support local growth and to accelerate the transition to a low emission economy. These ambitions are well aligned with the increasing focus on the social and environmental impact of destinations.

But what impact do they have on the performance of town and city centre occupiers?

The initial London ULEZ covered an area where strong public transport links gave a viable alternative to travelling by car. Public transport remains an easier option for those travelling to the area where traffic had already been reduced by 15% as a result of the congestion charge. The introduction of additional charges for non-compliant vehicles within this central zone has had limited impact on retailer performance. However, some parts of the expansion area are less accessible by public transport and the impact on retailer performance may be more significant.

The Birmingham clean air zone was launched in June 2021. As such, it’s challenging to separate the impact of charging from the ongoing pandemic recovery, especially as data from the Centre for Cities suggests that Birmingham continues to be in the bottom 10 of the UK’s largest towns and cities in terms of both footfall and spend vs pre-lockdown results. Although there was an initial dip in footfall (to just 27% of pre-lockdown levels) following the implementation of the zone, it has subsequently increased and, as of the end of August, was c.53% of pre-lockdown levels, with only London performing worse (c.43%).

Spend levels within the city centre peaked (at c.91% of pre-lockdown levels) the week before the CAZ charging commenced and, as of the end of July, total spend was c.80% of pre-lockdown levels, above London (74%) but below Manchester (94%). This cannot be purely attributed to the introduction of the clean air zone, but at a time when city centre performance is challenging, charging drivers of non-compliant vehicles (estimated to be 25% of those driving within the area before the zone was implemented) creates an additional barrier to visiting which will have a knock-on effect on retail performance. Faced with a choice between paying to enter a city centre and going to an alternative destination, out of town parks may be a beneficiary.

Clean air zones will become more prevalent in the UK, and elsewhere. Although the aim of charges is to encourage drivers to switch to more environmentally friendly vehicles or to use public transport, not all vehicle owners are in a position to do so, and it is lower income households that will be most impacted. Local authorities need to balance the benefits of better air quality and increased funds for transport infrastructure against the impact of potentially reduced footfall and sales on the already beleaguered retail and hospitality sectors and the impact the finances of lower income households.

What can councils and local stakeholders do?

Make it easier to pay
Whereas there are a variety of ways to pay the ULEZ charge (including by phone, autopay, the TfL pay to drive in London app and online), payment for the Birmingham zone can currently only be made via a government website and anyone not paying within 6 days of their visit is issued with a penalty charge. Although there is clear signage about the zone when entering the area, drivers visiting for the first time since the zone was implemented need to find the brumbreathes website to check whether their car is compliant and then go to the government website to pay the charge. There appears to be a lack of awareness of the charges or how to pay them – over 112,000 penalty charge notices were issued in July, including c.800 to the council itself. During the first few months, at least, of a scheme, it would be useful to introduce payment machines at key locations where users can also check whether their vehicles are compliant.

Be transparent about what the charges for travelling within a clean air zone will be used for
Any money from clean air zones has to be reinvested in transport related projects and cannot be used to support councils’ general budget or to fund services. The Brum Breathes website details the proposed schemes the charges will support, but more publicity around these would help consumer perceptions.

Monitor the impact on occupier performance
Given the retail and leisure sectors’ ongoing recovery from the pandemic, local authorities should engage with local stakeholders, including owners of major assets, traders associations and BIDs, to understand what impact, if any, the implementation of charging has had on both independent and national occupiers and ensure that appropriate support measures are available if required.

Sam Fox