The Telegraph, 8/9/03

The London congestion charge was branded a "financial disaster" yesterday after Steve Norris, Conservative candidate for mayor, released figures showing it will raise just £6m for transport schemes this year, a fraction of the £200m first promised by London's mayor, Ken Livingstone.

Steve Norris: 'The scheme is proving disastrous for shops and restaurants, now it seems it is a financial disaster too'
The initial enthusiasm for the charge, which has cut traffic levels, is turning sour. More drivers than expected have been deterred from visiting central London and thousands are appealing against their fines. The costs associated with running the scheme have also been much higher than expected.

Mr Norris said: "We have always known that Mayor Livingstone is no financial wizard. But nobody ever expected he would fail to make money from charging motorists from entering the city centre. The scheme is proving disastrous for shops and restaurants inside the zone, now it seems it is a financial disaster too."

The calculations are based on internal Transport for London documents circulated among London Assembly members.

Mr Livingstone cut the £200m revenue forecast himself to £121m last year, but additional costs have eroded even that number dramatically. These include a £64m reduction to take account of fewer cars entering the zone and the clogged appeals system, £31m in grants to London boroughs to help them cope with introducing the charge, and a £3m fee to consultants Deloitte & Touche.

As a result of Deloitte & Touche's work, it has been confirmed that Capita, the company running the scheme, is not making any money from it. Capita is consequently receiving a £7m annual subsidy to make up the shortfall.

Other costs that Mr Norris says are cutting the revenue from the congestion charge include a £10m consultation exercise to examine extending the scheme into Chelsea and the constituency of Tory MP Michael Portillo. There is also a £700,000 cost for additional press officers and publicity. Next year, if the scheme is extended, it could be even worse and make just £3.4m, Mr Norris claims.

However, a spokesman for Transport for London disputed the figures: "These are absolutely not correct. They have included things as costs which are separate projects, like the grants to the boroughs. Capita will only receive its £6.8m extra if it meets certain targets, and one of those is improving revenue collection."

Once the costs identified by the Tories are removed from the calculations, Transport for London says the congestion charge will raise £66m this year. But that is still only a third of the original estimate when the scheme was first mooted.

There are growing fears the congestion charge has hidden costs which Londoners will soon have to pay. Last week, Sir Stuart Hampson, chairman of John Lewis, said sales at its central London store had dropped 8pc because of the charge. Sir Stuart said other town centres should think hard before introducing their own schemes.

The cost of the congestion charge is also putting the spotlight on Mr Livingstone's finances. He is subsidising buses heavily and admits that by 2008 he could have a budget deficit of £500m, in part due to the failure of the charge to raise any serious revenue.

If the deficit is to be filled, Londoners could face an average council tax rise of £200 per household.

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Well done Ken! Once again he proves that loony-lefties couldn't run an office sweepstake without help from the IMF, Oxfam and the UN. I'll be holding a street party when he and his stupid charge fall on their arses!

From the Wandsworth Guardian.

Plans by the London mayor to extend the congestion charge zone have been challenged by Wandsworth Council’s leader.

Councilor Edward Lister has told the mayor any expansion of the zone should wait until the true impact on businesses has been revealed.

He called on him to reveal how much taxpayers’ money had been spent on the scheme.

In a letter to Ken Livingstone outlining the council’s concerns, Councilor Lister said: “No-one is denying the charge has reduced the number of vehicles entering central London, but before the mayor looks at extending the zone further he must come clean on the true cost to Londoners of a scheme that with every passing day is looking more and more like a colossal financial miscalculation which will hang like a millstone round the neck of every council taxpayer in the capital.” The mayor has already begun consulting on proposals for a new western boundary to the zone which would take in Chelsea embankment and Earl’s Court Road.

End.