Worth £50m or ruining London business? A balance sheet for the congestion charge

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Congestion charging has cut the number of cars entering London by 50,000 a day and is worth £50m a year to the capital.

Transport for London (TfL) painted an upbeat picture of the scheme yesterday, six months after its introduction. According to TfL and Ken Livingstone, the Mayor of London, journey times have dropped, traffic jams eased and numbers of accidents are falling without any significant "displacement effect" around the charging zone.

TfL said the costs of the scheme, such as its operation and laying on more busses, amount to £130m a year. Against that, there are estimated annual benefits of £180m from time savings, improved reliability and lower costs for Londoners.

However, the figures do not take into account the new charge's effect on shop sales. Companies such as John Lewis have complained that the £5-a-day charge launched in February has hit the profits of city-centre retailers. TfL conceded that sales have fallen this year, but said the shortfall could have been caused by broader economic factors.

The congestion charge has encouraged more people onto public transport. More than half the 50,000 drivers avoiding the zone are now using busses, trains or the Tube, a rise of 2 per cent. The 30 per cent drop in car movements and 10 per cent drop in van and lorry movements compares with a 20 per cent rise in taxi journeys and a 15 to 25 per cent increase in bus or coach journeys.

Between 15 and 25 per cent of the former drivers are cycling (up by one third), riding motor cycles (up by 20 per cent) or sharing cars. And 20 to 30 per cent are diverting round the edge of the zone.

In its analysis of the first six months of the scheme, TfL conceded that the number of people travelling to central London has fallen by 70,000 a day over the past year, but attributed only about 4,000 of that fall to congestion charging. The rest was accounted for by fewer overseas visitors, job losses and the four-month closure of the Central Line.

TfL said congestion - now at its lowest level for nearly 20 years - had been cut by 30 per cent, resulting in a 14 per cent fall in average journey times.

A downside of that success has been that less money has been raised from the charge, with the lower-than-expected returns to be reinvested in public transport. The charge is likely to generate £68m in its first year, rising to £80m, and £100m in subsequent years.

Early figures have pointed to a 20 per cent fall in accidents in central London. TfL said it was too early to pinpoint the reasons, though fears of more accidents because of an increase in motorcycle numbers have not materialised.

An average of 106,200 Penalty Charge Notices have been issued per month. By the end of September, around 14,200 appeals had been registered. To date, 10,600 of these appeals have been processed, with 4,000 being referred to the independent adjudicator. More than 110 persistent evaders have had their vehicles clamped or impounded by TfL.

Mr Livingstone said: "Congestion charging was a radical solution to a long-standing problem. It has helped to get London moving again after years of choking traffic. London has become the first of the great world cities to set about substantially reducing congestion in the central area."

Peter Hendy, managing director of surface transport at TfL, said: "Congestion charging is proving to make a real difference for the better for those who work in and visit London. Travel into and through central London by road is now quicker and more reliable than at any time in recent memory."