London Congestion Charge

Still Cruising Very Slowly Buses backed up in London traffic

The city's roads are as clogged as ever after five years of former mayor "Red Ken" Livingstone's congestion charge. London is still just as congested as it was before the introduction of the congestion charge according to a new survey, but not just because of traffic volume. The blame is now on road-works and measures to give priority to pedestrians, buses and cyclists.

Transport for London, which runs the city's transport system, said traffic volume had shrunk significantly since the charge was introduced in January 2003. About 70 000 fewer cars entered the charge zone every day than in 2003, a drop of 21 percent, but traffic still crawled because of phased traffic lights, pedestrian measures and road-works “The charge has cut traffic but hasn't solved the problem”.

London's new mayor, Boris Johnson, said: "I've always thought the congestion charge was a blunt instrument. It's cut traffic coming into London but hasn't solved the congestion." All road users, with a few exceptions such as taxis and motorcycles, must pay £8 to drive through central London but the charge has always been controversial with businesses citing lost trade.

The London Chamber of Commerce and Industry called for a review of the charge in light of the report, saying drivers were paying for no benefit. A spokesman said: "The congestion charge has increased costs and driven away trade from many firms. They will now be asking - with good reason - why their businesses are suffering."

London congestion map

What has happened to congestion in Central London has contradicted TfL’s assertions when the Congestion Charge Zone was extended Westwards on the 19th February 2007. According to TfL then, traffic in the original central congestion charge zone had fallen 20% since the scheme began in 2003 and it expected a further fall of 15% when the new charge kicked in. It also said the toll has helped fight pollution, reduce road injuries, increased the number of cyclists and caused more people to turn to public transport.

Part of the reason for increased congestion stems from the westward expansion of the Zone in 2007 as it had the effect of increasing greatly the number of residents cars which get a 90% discount on the Congestion Charge. Whereas there were not many cars in the original zone (a combination of lack of residential use and parking spaces in Central London) West London is very much a family area with high car ownership levels and as these owners have to pay the charge anyway they will use the opportunity to drive in the central area.


So this is the conundrum. If a “Congestion Charge” has not actually reduced congestion is it not then just another tax on motoring? This is certainly the view of the United States Government as the US Embassy in London now “owes” £1.5 m (that is $3.0 million) in unpaid congestion charges and fines, making the USA by far the worst offender in terms of unpaid charges and penalties. Since the US government unilaterally decided to stop paying the congestion charge in July 2005 their debts have rapidly risen. The US claimed that it did not have to pay the congestion charge because they claimed it was a tax from which diplomats are exempt.

There is the further point that very little of the “Congestion Charge” is actually going towards improving transport. The costs of the scheme eat up over 70% of the revenue (which includes a disproportionate element of penalties) on paying Capita and running the infrastructure for the charge – and that is before TfL’s own overhead is taken into account. This is a very poor way to raise money (although not for Capita). If it wasn’t for the large number of fines, the Congestion Charge would be something unique - a tax that loses money. The cost to London and Londoners is over a £1.1 billion. It was £930 million up to the end of March 2007, the annual run rate is about £250 million a year.By law all profits from the congestion charge have to be put into public transport projects. According to one set of TfL accounts, it reinvested just £280m since 2003. This omits the £265 million set up costs of the original scheme and the Western Extension. So that leaves a net benefit of about £15 million. So by any estimate the cost of the charge to the London economy has been hugely disproportionate even to the claimed benefit, let alone to the actual benefits. Here is the Audit Commision's take on the numbers.




So zero effect on congestion and very little contribution towards transport. So where does that leave the rest of us? Are we paying a Congestion Charge or merely an additional tax on motoring in the congested centre of London?