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Evening Standard

'Gaping hole' in car charging profits

by David Williams, Motoring Editor

Hidden costs have blown a "gaping hole" in the amount of money Ken Livingstone's controversial congestion charge will raise.

The £5-a-day scheme was expected to net £200million a year to fund vital public transport projects in London, according to the Mayor's own Transport Strategy.

But today it is predicted that profits will plunge by £117 million from the original figure to about £83 million a year.

An internal report by Transport for London's finance committee blames heavier than expected start-up costs of the scheme aimed at reducing the traffic entering central London.

These include expanding outlets selling the £5 "tickets" at newsagent and convenience stores and the placing of ticket terminals in car parks, hospitals and other local amenities. Other unexpected costs include changes to the design of the cameras that will detect evaders and extra traffic-management measures to smooth the introduction of the scheme next February.

The decision to shorten the charging threshold from 7am-7pm to 7am- 6.30pm has also lowered revenue predictions, and the report warns there may have to be even more expenditure to improve "customer service", including a campaign aimed at persuading drivers to shift to other means of transport, before charging starts.

Additional potential costs include incentives to encourage motorists to register their vehicles before the scheme starts, and the finalisation of "debt-recovery services" from motorists who fail to pay evasion fines.

Today Tories on the London Assembly warned that they expected further "sharp" falls in revenue as even more unforeseen costs emerge. Conservative congestion charge spokeswoman Angie Bray said they expected annual profits from the scheme would not now rise above £83million. "There's going to be hardly any money for improving public transport, despite hitting Londoners hard in their wallets."

Fears are growing that TfL may increase the £5 charge or even extend the road-fee area to make up the shortfall. The £200million a year that TfL intended to make from congestion charging has dwindled at an alarming rate. Last November, TfL officials admitted that projected annual profits would be about £130million. And on Monday, TfL will begin fighting Westminster council and the Kennington Association in a judicial review at the High Court that could result in big bills for both sides. Already the review has forced TfL to schedule £2.3 million to cover legal fees.

TfL did not return phone calls from the Standard about the revenue "hole".

© Associated Newspapers Ltd., 11 July 2002

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