Today the Sunday Times lays into the Congestion Charge with the headline “British cities shun Londonâ€™s wasteful car tax”. It is good to see the mainstream media trying to give a balanced view on the charge although it is frustrating that the journalist, Steven Swinford, has got some of the numbers wrong and missed out others. It is doubly frustrating as he called me twice to get the inside story on the charge. Sometimes I wonder how journalists’ minds work. Why do they so often get stories wrong?
In his first paragraph he says:
IT WAS intended to get London moving, but after five years of Ken Livingstoneâ€™s congestion charge, and more than Â£800m of tolls and fines, traffic jams are almost as bad as they were to start off with.
The number is over a Â£1.1 billion. It was Â£930 million up to the end of March 2007, the annual run rate is about Â£250 million and we have got through 2/3rds of the year. Only Â£300 million wrong then. See table here made up from 5 years of TfL’s statement of accounts here.
In his second paragraph he says:
As a new cadre of charge bureaucrats prospers, overheads are now so high that they burn up the equivalent of almost Â£4 of a standard Â£8 charge. Money raised to improve public transport has been cut by 10% in the past year.
The Audit Commission says that the figure is more than Â£5 out of Â£8. You see the Mayor is a financial idiot or a porky pie teller – he does not recognise the concept of indirect costs. The Audit Commission insists that he does. Hence the Mayors kids us he makes a Â£122 million surplus (meaning Â£4.13 out of Â£8 is burnt on costs) when in fact the net surplus is Â£89.1 million (meaning that fully Â£5.18 out of Â£8 is burnt on costs). See the Audit Commission’s version of the numbers here.
Further on the article says:
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 Â£280m since 2003.
This is the Mayor’s little fantasy. The article omits to mention the Â£265 million set up costs of the original scheme and the Western Extension. So that leaves a net benefit of about Â£15 million, which is pretty much the number I calculated in July, see previous posting.
That’s the Mayor done up like a kipper then. Shame Swinford couldn’t do the job properly.