Phil Taylor: London Congestion Charge - 5 years, £1.2 billion and...

Analysis by Ealing councillor and blogger Phil Taylor.

Yesterday was the fifth anniversary of the start of the London Mayor's congestion charging scheme.  Last year I set out to show how all of the £930 million taken by the Mayor in charges and fines had been spent on out of control set-up and running costs, see previous posting.  Another year has gone by and the Mayor has taken £1.2 billion off Londoners in the last five years for the Congestion Charge.  Where has it all gone?

No doubt the Mayor or one of his 265 press people will tell us that the charge never set out to raise revenue.  Well that is OK because it doesn't. The Evening Standard showed last week that it doesn't do much for congestion either.  They said:

"Traffic speeds in parts of the congestion charge zone have fallen dramatically - in some cases to even lower than before the toll was introduced five years ago. An Evening Standard survey has found evidence that traffic on 12 key routes through central London travels at an average of only 6.5 mph. Speeds on some main routes are now slower than a walking pace. On the Strand - a vital east-west corridor - the average speed is 1.8 mph."

When the Mayor isn't claiming that these schemes set out to raise no cash, he makes the opposite assertion.  At their press conference last Tuesday the Mayor and his Transport for London Commissioner, Peter Hendy, announced the rebranding of the Congestion Charge as a CO2 charge.  During the course of his remarks Peter Hendy said the charge "raised just over £120 million last year" and "this new CO2 charge will raise an estimated £30-50 million".  Both of these claims are economically illiterate.

The Congestion Charge figures from TfL's own annual report and accounts are reproduced below.  His own figures make a fool of Hendy.  Once the figures get proper attention from the Audit Commission suddenly the net profit is only £90 million.  To give you an idea of how mendacious Hendy is, the £8.6 million he spent advertising the Western Extension to the charge was included in "Western extension zone set-up costs".  It's a strange view of profit when you consider advertising of your service not to be a direct cost of the service. Click to enlarge table below.

 

If you think that a £90 million surplus sounds quite worthwhile then consider for a moment that the Mayor had to take £250 million off Londoners to create the £90 million.  Then ask how the £322 million capital costs of the Mayor's various schemes are going to be paid for out of this £90 million?  How is he going to pay off the loss he made in the first part year of operation and the poor performance in the second?  If you put all of the figures together in a spreadsheet along with the LEZ "investment", which uses the same infrastructure and is a product of the same mindset, you get the picture shown below.  The costs the Mayor admits to do not include research into various technical options such as tag and beacon and do not include consultation costs which were £1.9 million for the LEZ and £1.4 million for the emissions related congest charging scheme this year, see here.  I have added a line alongside the capital line to make an allowance for these.  Putting everything in the pot we are looking at breaking even after five years of operations that have left Londoners £1.2 billion poorer.  Oooops. 

 

Click to enlarge spreadsheet below.

Comments

[Felicity Mountjoy]

Thank you Phil.
Could Livingstone say that congestion would have been much worse without the charge?

[Guy Matthews]

Every day 70,000 less cars come into the Congestion Charging Zone than they did before the charge was introduced.

If we had not had congestion charging, London would be in utter gridlock. The problem faced at the moment with increasing congestion is down in a large part to ineffectively managed road works and other complex infrastructure issues.

Mr Taylor is well within his rights in exposing economic misrepresentations from teh Mayor but he must not confuse doing so with an unfair and unsupported attack on congestion charging.

[Lindsay Jenkins]

An excellent expose.

In answer to Guy Mathews Ken created gridlock by shutting off streets, narrowing roads, and of course changing traffic lights.

Its a lot more complicated picture than the charge itself.

[franky boy]

it seems to me that the common man (ie the small business man who needs to get around by van, lorry etc) is being very badly affected by this charge (from looking at other blogs) It also appears that the only advocates of this bizzare idea are the usual suspects --pseudo enviromentalists, lefties and the vast army of clowns employed by the Mayor --but what do I know I'm just a self employed taxpayer.

[Andrew Ian Dodge]

And all the shops that are closing down in Central London because of the charge are just an unfortunate by-product? If the enviro-fascists are happy then the consequences be damned.

[Anne Murphy]

One of the weird things about the logic behind the congestion charge always seemed to me to be that it's aim was (supposedly) to reduce traffic to make Londoners lives better. So why start in the bits of London no one lives in (the City/central West End)? Why there? Surely if you want to reduce traffic and pollution you want to do that in residential areas first?
But if the motivation wasn't to improve life for residents but to improve traffic flow for business that patently hasn't happened either. To those who claim it has: how does anyone know what the traffic numbers would have been? Even if they have reduced during congestion hours, does that mean a total reduction in traffic numbers? Or just relocation of business outside the zone/restaggering of traffic to hours outside the zone? But anyway, can you show me anyone who thinks the congestion charge has improved their business? And can Traffic for London say what business it does want to drive through/in central London? What business traffic does it approve of and is trying to encourage? Can it point to any way in which it tries to encourage certain sorts of business traffic? No, because they don't exist. So the idea isn't to improve life for business either.
I could just about have seen the logic (though I don't think such schemes ever work) in a congestion charge to get rid of traffic from residential streets. That wasn't the plan, however. And if you wanted to improve life for business traffic, you certainly wouldn't have started from here.

[Phil Taylor]

Felicity,

The number of cars going into central London had been on a downward path for a number of years before the charge (according to the Department for Transport). It is also true that the charge made little or no impact on cars entering and leaving the zone at rush hour. What happened is that casual trips during the day slumped. This explains why congestion has not been substantially reduced and why shops have been badly affected. This report has all the figures. Read from page 16.

Guy,

I am afraid that phrases like "utter gridlock" are just hyperbole. Most drivers behave quite rationally. If a journey is hard they don't do it. If it is easy and not too expensive they weigh the benefits of time on their own with Radio 4 against maybe slightly less time on a Tube with someone's armpit in your face and make a logical choice to drive.

Driving in London has been getting harder for years. I remember driving in the eighties in London when I drove way faster than I do now and parked much less carefully.

We didn't need to spend £1.2 billion on charges to change our behaviour. That was happening anyway.

[Sarf Lunnon]

1. But we all knew the charge was a pile of s***. When the initial advertising campaign came out it asked the rhetorical question 'where will all the cash go?' answer 'on public transport'. I complained to the ASA this was misleading advertising as TfL's own figures showed most would go on setup and operating costs. My complaint was upheld and TfL and its agents were ordered to stop the campaign. I claim 1 nil against Ken.
2. Of course central London has always been congested (look at those old photos of Piccadilly Circus jammed with horse buses), and when I first worked (briefly) in London in 1959, commuting in my old Land Rover I used to boast that a Land Rover was the only sensible vehicle for congested London, as 'even the buses move over for me'.

And so the congestion charge was just an expensive irrelevance.

[J H Holloway]

Watch out for a report in Autocar on Wednesday that I put together. It details the likely next move in Ken's tolling empire and it doesn't make for pretty reading.

One thing's for sure, Ken won't be telling us about it until after an election win. Just like the plan for the removal of the Routemasters.

I hope to send out PDF versions of the article tomorrow to the mainstream press to try and get wider publicity.

[Comstock]

This is all very well, but Bo-Jo has yet to come out with a clear policy on the congestion charge, and the clock is ticking......

JHH, will your report be available online? If not, how much is Autocar?