Employers have a part to play in meeting the country’s carbon emission targets. One way is through encouraging staff to use public transport. Nick Golding details how it works.
The role that employers will have to play, should the UK government stand by its commitment to cut greenhouse gas emissions by at least 80% over the next 40 years, is likely to be significant.
In July, the Department for Transport’s Low Carbon Transport: A Greener Future report specifically addressed employers, tasking them with the role of reducing CO2 emissions by coercing staff into dumping the car in favour of greener transport options, such as buses and bikes, for the daily commute.
But for staff to see value in changing their travel habits there needed to be some sort of incentive, so certain green travel arrangements have been placed under the government-backed salary sacrifice scheme heading, which means financial savings.
Where bus travel is concerned, employees that agree to take on an annual season ticket can pay for that ticket on a monthly basis from gross rather than net pay. In turn, they can avoid tax and national insurance (NI) costs, explains Richard Davies, head of employee benefits at marketing services agency P&MM.
“This is tax-free bus travel, because the employer buys the annual bus pass and the employee pays for it monthly via salary sacrifice, NI and tax-free, making savings of between 30% and 40%.”
Gethin Nadin, commercial manager at provider You at Work, adds that take up of such green travel perks means there will also be less pressure on some employers to provide potentially expensive city centre parking spaces for staff.
And the chances are, all major employers will be able to take part in this benefit at one or more of their workplaces, because providers claim to have struck deals with bus companies in all the UK’s major cities, except London.
Davies says: “London is also soon to be covered. In January, P&MM is launching a new scheme in the London area as Transport for London has developed a unique card for the scheme.”
The similar yet more established bike-to-work benefit, based on the same salary sacrifice model, is another ideal way for companies to fall in line with the government’s green ambitions, as well as keep staff fit, healthy and productive.
Worth noting too is that, just like employees, employers rarely make too many changes to benefits out of the kindness of their hearts, so the good news is that where salary sacrifice schemes are in play, companies can make NI savings that, in some cases, fuel the cost of the scheme.
“Set-up costs for these [green travel] perks, bikes and bus travel, depend on the size of the company, though it is important to consider that through the savings that the employer can make on NI per employee on salary sacrifice, they can claw back that initial outlay,” adds Nadin.
Case study: Nottingham City Council
When it comes to green travel, Nottingham City Council has gone a long way to encourage its staff to leave the car at home.
Aside from the salary sacrifice bike-to-work scheme, the council offers free bus passes to employees that are moving around the city for business meetings, and also has a pool of bikes that staff can use when they are travelling to and from council sites during the day.
Andy Barnes, employee transport co-ordinator, says: “We are a big organisation, so it’s difficult to implement one scheme that covers everyone, so we have a range of different benefits on offer to keep people out of the car and in green transport.”
A car-sharing scheme is also in operation at the council, and those employees that car share are given priority parking at the county hall office, where there are 800 spaces for 2,000 staff, as an added incentive.