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Subsidy? Investment? Visitor levies? But for what?
13th October 2023
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Does anything lead to a manning of the barricades more in the UK than discussions of taxation? Almost all of the visitor destinations at which I have been ogling during this study receive what we would consider significant year-on-year funding from different forms of visitor levy and business contributions (considered as investment, not subsidy – but more of that below). Does this mean visitor levies are a must in the UK? It’s just not that simple.

Perhaps the most notable difference between my study destinations and UK destinations is the culture and mechanisms of how things are funded, the locality of governance, how revenues flow (from and to who/what/where) and the scale of ongoing funding available.

Firstly, money.

Most places have had some form of visitor levy for decades (typically £2-£7 per night), often with a compulsory business contribution, and the local ways of systems doing things are set up to manage this locally i.e. at the scale of the destination. This leads to locales – places with typical populations of 1000s and visitor volumes of maybe a few million – having direct control over annual budgets of up to a few million that focus on visitor services and infrastructure investment. This typically involves transport services, events, environmental improvements and other visitor infrastructure such as swimming pools. In several of my interviews it was clear that local governance leads to local priorities for investment rather than endless cycles of benefit-cost ratio appraisals and capturing economic benefit down the line. This meant that if it was decided that there was need for more cycle routes or a new swimming pool or enhanced public transport, that is where the investment is directed.

Whilst it is possible to implement similar levies in the UK and there is recent precedent in Manchester, the argument against visitor levies in the UK is a VAT rate of 20%. For comparison, in Switzerland it is about 8% and in Austria about 10% (“about” because not all spend is necessarily liable the same level of taxation). This means that the additional levy can be seen as a reasonable extra charge, especially as it is widely recognised and accepted by visitors that it is ringfenced to spend (“invest”) in visitor infrastructure and services.

It is perhaps interesting that opinion polls (such as in the Lake District and Edinburgh) suggest that majorities of visitors in the UK are open or keen to paying an extra levy if it is ringfenced to re-invest in the local visitor economy. Could this be because we see how other places work and realise that the only way to get the quality of services & infrastructure is via a levy, regardless of our relatively high VAT rate? The clear other option – especially from a perspective of making things fair across visitor destinations in different countries – is for UK visitor destinations to receive and manage a proportion of the VAT paid by visitors in the local area. I can’t really believe this might happen any time soon, regardless of the political colour of the Government, though lower VAT rates for parts of the visitor economy coupled with a visitor levy might make more headway(?).

Secondly, money for what?

Let’s just imagine that UK destinations were able to access stable year-on-year levels of funding of similar scale to places in Austria or Switzerland. Would we know how to spend it? No, really… would we? Let’s look at the problem the other way around.

Take any UK destination – maybe a valley in a National Park or a popular section of coast. What is on the list for spend? Perhaps most could suggest in general terms what priorities might be (“better bus services”, “environmental improvements” or that bottom-drawer list of costed cycle routes), but what might Swiss or Austrian standard services and infrastructure comprise and – importantly – cost?

Following my trip, I find myself increasingly looking at backcasting. From a transport perspective (and probably other sectors in visitor destinations?), I’d suggest we are attuned to focussing on fairly small scale, “less bad” thinking, and a necessity to either firefight problems or frame priorities to funding opportunities.

Instead of being scared of the “but it’ll never happen” or “but what’s the point when there is no funding?” blockers, how about we try to take an approach that for a specific destination (such as a national park valley or length of popular coast) looks something like the following? Its apparent crass naivety is deliberate over-simplicity to make the approach clear.

  1. What access & transport services and infrastructure would make this into a world class destination that delivers on agreed outcomes (decarbonisation, visitor experience, equity etc etc)? This might be 6am-midnight frequent bus/shuttle services, (e)bike share scheme, pay-as-you-go e-mobility, beautifully designed cascade of mobilty hubs (etc etc); take the bones of those indicated in the 6-component model and apply them locally
  1. What is the scale of one-off/capital and ongoing costs? Don’t be scared!
  2. What other interventions would be required to enable success (e.g. seasonal visitor traffic restrictions, changes to approach transport services etc)? (again, don’t be scared!)
  3. What are the investment needs and cases? What are appropriate sources of funding and investment for the different components?
  • What is the case to Government? Has a destination ever tried to make a case for such a scale of change?
  • What is the case for visitors to contribute? Visitor contribution might be via a direct per-night levy, or via “guest card” passes replacing existing fares and charges.
  • What is the case to local businesses – as it will provide highly marketable products and experiences?
  • What new services will be nurtured and triggered and how will the nature of the local prosperity change?
  • Who has what roles? The public sector’s role might focus on using their powers (e.g. restricting visitor access) so that the transport operators can take the risk and reward of providing quality of transport services (hence reducing the scale of required funding).

The idea of Business Improvement Districts starts to make sense; more progressive use of the Bus Services Act makes sense. It provides fodder for a constructive and informed debate around the role of  visitor levies…  And on and on and on…

The main point is taking seriously the challenge of designing and costing how places could work (in terms of access and transport) and working backwards.

In my travels, it’s clear that different countries have different norms and cultures for their big-picture thinking on visitor access and transport. Switzerland is often about visitor traffic exclusions with colossal “terminal” car parks (and stunning-if-expensive rail & postbus services); the norm in Austria seems to be local visitor travel passes “your guest card is your travel pass”, often with free and paid-for levels of services coupled with pretty amazing rail services. I didn’t get to the USA, but the idea of capped visitor numbers and timed tickets is not unusual in busy US national parks such as Yosemite.

The two questions leading from this are (1) what could a UK norm be for its visitor destination access and transport? I’d suggest it borrows elements from many other places (but can we avoid the colossal car parks please?), but will need stirring into something that works for the places, cultures and demands of UK destinations; (2) Who would lead & coordinate such an approach and how would governance work? At the moment, the bottom-up efforts in the Peak District’s Travelling Light initiative and Lake District’s Ullswater valley are making headway, but it needs strategic will via national-scale networks and organisations such as National Parks UK,  the AONB’s Landscapes for Life network, the National Trust and other destinations networks. The Glover review (proposal 19) highlighted the colossal gap in roles and responsibilites regarding how transport is governed in national parks; I’d extend this to leisure travel more generally. Together, these perhaps partly explain the lack of ownership for leisure carbon emissions.

This isn’t going to happen unless we decide to make it happen. It feels a bit like the various stepped behaviour change models – we need to acknowledge there is a problem, then decide we are going to do something about it.

 

This all feels a long way from the pressures that UK destinations face today. £2 bus fares are great (though seen as a “subsidy” rather than more progressive investment in anything in particular; if we took a backcasting approach to a location, would a £2 bus fare emerge as a solution?), lanes lined with cars on sunny weekends are terrible… but just focussing on these isn’t really going to change what needs changing.

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