Congestion charge hit by drivers avoiding zone

The mayor of London is facing a cash crisis because drivers are avoiding the capital's congestion charging zone.

Ken Livingstone said yesterday that the £5 levy was so successful in deterring motorists that income from it was only half the £130m predicted.

One of his senior officials told the London Assembly's budget committee that there would have to be a review of planned spending on improvements to public transport as a consequence.

The scheme had reduced congestion by 40 per cent. The amount of traffic entering the area was 20 per cent lower than the equivalent time before the charge was introduced. Transport for London was expecting to spend £81m of the £130m on buses, £3m on late night transport, £4m on security and safety on buses, £6m on safe routes to school and £36m on road safety measures.

Sally Hanwee, the Liberal Democrat chairwoman of the committee and of the Assembly, said she expected the road safety measures to be the most likely victims of the shortfall. She said the Mayor seemed to have no rescue plan. "This is a substantial shortfall and I am quite alarmed," she said.

"The things that get cut in these situations are things that are less high profile, like road safety, provision for pedestrians and cyclists."

There is already a forecast £563m "black hole" in Transport for London's finances for 2005-06, she said, and Mr Livingstone appeared to have no plan but to go "cap in hand" to the Government to solve the problem. A spokesman for the Mayor said this year's spending plans would not be affected by the predicted shortfall.

"It is still early days for the congestion charge, but the scheme was always designed to reduce congestion and not raise revenue," he said. "It is working very well and congestion in central London has been cut by some 40 per cent.

"But as a direct consequence of the scheme's success, we are likely to be slightly below our original estimates of how much we might make from it."