How can we make it so cycling or walking is the easier choice then?
That's partly what the LTN stuff is for. You discourage through traffic through neighbourhoods by blocking off roads, limiting access, etc. That makes the roads in the neighbourhood nicer and more people will consider cycling/walking, especially if there's some dedicated cycle infrastructure thrown in. Reduce the width of the roads and increase pavement width. This attenuates traffic speeds which also encourages cycling.
For my situation (and many other examples) a 1km journey to my local leisure centre or supermarket is quicker/easier by car because of numerous reasons:-
a) I have a car, and I have a car because it's not annoying or too expensive
b) Parking is easy outside my house - if I had to park my car further away that would eat into the convenience
c) Parking outside my house is not prohibitively expensive - I don't have off street parking and some people may balk at the £160 I have to pay a year for this but, all in, the car costs aren't too much
d) My on street parking permit means I can park up to about 1km away as it is all in the same CPZ (Controlled Parking Zone) - this makes it convenient for the gym and the supermarket
e) I have a bike but I have to store it somewhere a few hundred yards away, I don't have anywhere convenient to store it so it's "just there" like the car is
f) I can drive directly on quiet residential roads to get to the the gym/supermarket without having to go on major roads
If any of those things start to change then it's going to be less convenient for that journey to be done by car:-
a/c) If MOT, insurance or parking costs increased I'd consider getting rid of it and just using Zipcars[1] when really required
b) On street parking is not in short supply round here, the roads are wide enough for cars to be parked either side and still allow traffic to flow freely both ways. Widening the pavements (in a post Covid-19 world) would increase pavement size and cut down on available on-street parking. Residents would object, of course, but it's one way of squeezing things
d) Smaller controlled parking zones would mean less convenience for me. Many people wouldn't choose to pay to park their car for the 1h for the gym or 10 minutes for the supermarket regularly, many will use the car because they can park for free because 1km is still within their home zone.
e) A bikehanger type storage right nearby would make it easier for me to store a hackbike in there that I'd use for local utility cycling. There are security problems with those bike hangers and I wouldn't trust any bike more than £100 or so in one.
f) Again, the LTN can have an effect on this. Make roads one way. Split large residential areas up into sections and stop internal traffic driving most of the way across them. Right now there's nothing stopping me driving most of the way through the neighbourhood in any direction. Make it harder or more annoying for me to do this short journey. The problem start once I want to go more than 1km away as I get onto the larger distributor roads and the traffic grinds to a halt. Again they'll be a big pushback from the local community against this but fuck it.
(Again, I don't actually drive to the gym or supermarket. I choose to walk or cycle even though it's less convenient and takes longer.)
1. We've done this to death elsewhere. I've done the sums and I'm teetering on the edge of being better off just using a Zipcar when necessary and so it wouldn't take much of an increase in one of the expenses and I'd be getting rid of the car. In reality the car is getting cheaper each year as my NCD builds up and my insurance goes down.