Private parking debt recovery companies are facing fierce criticism after a government document revealed they are operating with an average profit margin of 63 per cent, a figure branded “disproportionately high” by the AA.
The Ministry of Housing, Communities and Local Government (MHCLG) disclosed the figures in a consultation document, describing the margins as evidence of a “market failure”. The report compared the profits of debt recovery firms—who typically charge motorists up to £70 in additional fees per parking ticket—to those of “highly innovative companies”, despite their services being “standard” and low-cost.
Debt recovery agencies are hired by private parking operators to pursue unpaid tickets, often adding substantial administrative fees to motorists’ bills. These charges were initially set to be banned under a 2022 government code of practice, but the policy was shelved months later following legal action from parking firms.
The new Labour government’s consultation has revived the debate, noting that the £70 charge “is likely to be higher than can be reasonably justified” while seeking further evidence before introducing a new cap.
The MHCLG said firms would still break even with fees of around £26 per ticket, suggesting that the current system allows excessive profits. The department warned that the sector shows signs of “too much control over the market”, indicating a failure in fair competition.
Jack Cousens, head of roads policy at the AA, said the findings underline the need for stricter regulation: “The 63 per cent profit margin feels disproportionately high for the services provided. This only highlights the need to curb the sector and ensure balance for all.”
He criticised the government for backtracking on the original ban, saying the latest proposals “fall short of the mark”.
Steve Gooding, director of the RAC Foundation, said the figures reveal how lucrative the parking enforcement industry has become: “The profit margins revealed by the Government help explain why there are now more than 180 private parking firms buying vehicle keeper records from the DVLA so they can send demands to drivers – it’s a huge and profitable business.”
Recent analysis by the PA news agency and the RAC Foundation found that 4.3 million tickets were issued by private parking companies between April and June – a 24 per cent rise compared with the same period last year.
The British Parking Association (BPA) strongly disputed the government’s calculations, claiming the figures are “misleading” and fail to reflect the true nature of the industry. A BPA spokesperson insisted the additional fees are intended as “a fair and effective deterrent against deliberate non-payment” rather than a profit mechanism.
An MHCLG spokesperson responded: “This Government inherited a private parking market that lacks transparency and protection for motorists. We share their frustration, which is why our private parking code of practice will drive up standards in the industry and hold parking operators to account.”
The government has pledged to publish its final response to the consultation soon, aiming to create a more transparent and fair system for UK drivers.
