Author: Phil

The Mayor is trying to make another grab for control of waste, an area that has traditionally been under the control of local authorities and which he sees as being a way to get more power for himself. His press release issued today says:

We need one city-wide body to manage London’s waste sustainably, so we don’t dump it outside the city or burn it. David Miliband, the Secretary of State for the Environment, could resolve these problems by unequivocally backing the creation of a single waste authority under the office of the Mayor of London, which would give us a city-wide body similar to the way we deal with transport.

So the Mayor wants to centralise London’s handling of waste and make it as inefficient and wasteful as Transport for London.

I don’t recommend that you read the 404 page Municipal Waste Management Strategy and certainly don’t ask how much it cost in all its full colour, commissioned artwork glory. I did load the PDF and search for terms such as “savings”, “cheaper” and efficiency savings”. You will not find any references to saving you money in this document. How can you centralise a service on a pan-London basis and not make one of your key objectives slashing costs? You will find talk about sustainability and vision which all equals much greater costs to ordinary Londoners.

The Mayor’s strategy talks of a fifth functional body. Imagine Waste for London in addition to Transport for London. Maybe WfL will have a £78 million comms budget too. Maybe WfL will employ 821 people who earn more than £50K per year. You can assume that WfL would really hurt your pocket.

I could not attend Mayor’s Question Time this Wednesday but I have been reviewing the webcast this morning.

Roger Evans, the Tory transport spokesman on the GLA, challenged the Mayor on the cost implication of his announcement on Monday regarding Congestion Charge banding. Follow the link above and move the slider control to 1:45:00. The Mayor would not give a direct answer to the question but essentially said that if people traded down it would be a good thing and it did not really matter if income was lost. He said:

The TfL budget this year is over £5 billion. The income from the congestion charge is I think about £120 million. Therefore a variation of £2-3 million within the congestion charge has no overall impact on the totality of the budget.

There are a couple of problems with this statement. Firstly, the Mayor has taken £677 million off Londoners in charges and fines and spent every penny of the money, and more, on set up and running costs. He needs to make a surplus of £60 million this year before he starts to generate cash. At the end of this financial year it is likely that the Mayor will have taken over £900 million since the scheme started and made a net income in the order of £10 millions. If this is green taxation then we will all be very poor in the future. Secondly, the average net income from the charge (which ignores the capital costs of the scheme) for the first three full years of operation has only been £83 million so even excluding set up costs the Mayor is being wildly over-optimistic about income from his silly scheme.

This statement reveals the wishful thinking that has led to financial disaster that is the congestion charge. The City Hall idiots think “this scheme will make money therefore I do not really have to control costs”. It follows that they sign contracts that are overly expensive, they make arbitrary deadlines and do not consider the cost implications of meeting them, in their haste they do not fully consider all the costs they will be liable for, when they run into problems they throw more money at the thing and they don’t do any proper analysis before they make changes that will undermine the viability of the scheme. In this way all the income to-date has been squandered in costs and there is little prospect of any net cash being returned to Londoners to spend on useful things like policemen say.

Beware though. If you think that wasting £100 millions on Congestion Charging is a trivial matter then consider the effect of taking billions off Londoners and wasting most of that too. This week the Mayor also talked about London moving to road pricing before the rest of the country. This will cost us billions, not hundreds of millions.

Remember the quote (Evening Standard 27th January) from Michele Dix, director of congestion charging at TfL: “It would generate £3 billion gross and net revenue of between £1 billion and £2 billion.” This silly woman, typical of TfL management, can’t refine her cost estimates more accurately than to the nearest £1 billion. She seems to think that it acceptable to tax people to this extent and then lose anywhere from a third to two thirds of the money in collection costs. If the Congestion Charge is a model for road pricing then the scheme will cost us £3 billion and every penny will disappear in costs until the scheme has run for at least 5 years.

Ken Livingstone has announced the latest nail in the Congestion Charge’s coffin. Even less income will be collected as a result of today’s announcement. This announcement was headlined on the Radio 4 PM programme today as “increased CC for the most polluting vehicles”. In the details of the press release though it seems that small vehicles will be exempted from 2008 but the extra charge for large vehicles will not come in until 2009 or 2010. In other words our economically illiterate Mayor is going to give up a substantial part of the existing income before he gets the new income.

As I wrote back in September the CC has to make a surplus of at least £60 million in the current financial year just to break even over its life to-date. This latest blow to the financial viability of the CC will ensure that all of the income, over £200 million a year from hard-pressed London drivers, is totally wasted in excessive costs.

The CC is specifically designed to force people to make errors and incur excess penalty charges. It is therefore very dependent on penalty payments to make a surplus. As Conservative AM Angie Bray revealed by asking a question of the Mayor 30% of revenue comes from fines. There is a significant risk of a collapse in revenue as London drivers get wiser. This was seen recently when Angie Bray asked about the impact of allowing people to pay the next day. The answer revealed that the CC will lose £5.7 million a year as a result.

Another blow was highlighted in the Evening Standard on Monday. A lone campaigner called Barrie Segal is challenging various aspects of the administration of the scheme. The Standard reports that another £8 million of fines are potentially at stake.

It appears that the Mayor is trying to rebrand the CC as a carbon fighting measure. We know it has had no significant impact on the steady reduction in car use in central London, driven mainly by the sustained persecution of London drivers by decriminalised parking (code for taking parking off Met traffic wardens and allowing local authorities to soak drivers). It has yet to make money and it is looking increasingly likely that it never will.

Up until the end of March 2006 the Mayor has taken £677 million off London drivers and blown all of it and more on costs. What a chump!

Both the FT and BBC Radio 4’s Saturday PM this afternoon covered the Tories’ problems with an open primary for the London Mayoral candidate and the possible involvement of Nick Ferrari among others.

Ferrari’s position seems to be that really good candidates (like him obviously) are too busy doing real stuff to bother with campaigning until maybe the start of 2008. I think that if people can’t make a commitment to London and the Tories sooner than that then we should not consider them. It may well be that we cannot recruit a big hitter but it is better to accept this sooner rather than later. With this rolling process of deadlines that will not hold it makes it too big a risk for ANYONE to apply because they are likely to have the legs cut from under them by the central party if the panjandrums don’t like the candidate. Isn’t the point of an open primary that Londoners choose from a wide field?

The party should set out a timetable and stick to it. A low key candidate will gather momentum if they get to work and the party gets behind them sooner rather then later.