Phil Taylor

You might imagine that Livingstone’s congestion charge is making a surplus. Er, no.

In their 4th annual monitoring report published on 29th June they claimed “£122m being raised, in the financial year 2005/06, to invest back into London’s transport system”. This is highly misleading as it does not consider the capital costs of the scheme, which are currently being doubled by the Western Extension. The numbers also show just how poor their cost control is.

The scheme started in February 2003 and has appeared in the last four TfL annual reports as a note to the accounts. These figures are tabulated below (click to enlarge):

The first observation to make is that their management control/monitoring systems must be pretty weak if they can publish a document in June saying that the surplus will be £122 million and then publish figures 3 months later that are significantly worse at £106 million. Where did £16 million go? Uncontrolled costs?

On these numbers Livingstone has taken £677 million off Londoners in charges and wasted 72% of it in costs whilst returning 28% for spending elsewhere. The real figures are much worse.

In an answer to a question raised on 13th September by Conservative AM Andrew Pelling the Mayor gave some background on the capital costs of the scheme. The original scheme cost £161.7 million to set up. The Western Extension is costing £123.1 million – this cost is already committed and can be considered sunk.

Of the figures in the table above the “Financial assistance/deferred charges” and “Depreciation” lines are accountants’ adjustments so we can discount these for the purpose of this analysis. As at the end of the last financial year the Mayor had collected £677 million from Londoners, £452 million had been spent collecting the revenue leaving a surplus of £225 million which is less than the committed capital costs of the scheme (£285 million). The Mayor still needs to make a surplus of at least £60 million in the current year just to break even. The Mayor has simply spent the whole lot in costs. NO SURPLUS has been created yet.

Will things get better in the future now we have got over the initial period (over three years!)? No.

In another question Pelling has found out that costs are increasing steeply. Expenditure for 2004-05 in the area of toll facilities was £120.8 million. Expenditure for 2005-06 was £143.5 million and projected expenditure for 2006/07 is £155.1 million. In other words a 19% increase last year and another 8% projected for this. Most commentators agree that the Western Extension will not result in a large increase in revenue – it may even reduce revenue as those in the Western area are able to avoid the charge.

This is not the worst of it though. Yet another answer to a question from Conservative AM Angie Bray reveals a major risk to revenue. 30% of it comes from penalty charges. In other words if Londoners smarten up and stop incurring fines this whole stupid scheme will never wash its face. Aaaaaaaagh.

The Standard reports today that the Mayor spent £10K of our money at a charity ball in support of the Variety Club. I really want him to leave my money alone. I have lots of charities I support and I really don’t see how it is right for him to take my money and give it away on my behalf. If he wants to write a book when he is voted out of office in 2008 he can then go to charity balls and take part in auctions and spend his royalties.

The Standard used some of my stuff today, with my permission. In an article about the congestion charge they said:

“Phil Taylor, a Tory councillor in Ealing who has been investigating TfL’s use of public money, said the congestion charge was a “terribly inefficient way of turning our money into things we actually want”.

He said: “TfL’s highly-paid managers cannot run a tax system let alone a transport system. The extra £3 a day motorists are paying is not funding public transport improvements. Instead they have just vanished in costs”.

Click below for full article.

I have just found TfL’s figures for this year. There was no accompanying press release so I guess TfL is trying to bury the bad news. The pants-on-fire Mayor can announce three new TfL directors today but does not see fit to comment on the organisation’s figures.

The first thing that jumps out is Bob Kiley’s £1.7 million severance package. Not bad for 10 months work.

Apparently the Chief Financial Officer of TfL, Stephen Critchley, signed these figures off on 28th June but it takes almost 3 months for them to appear, without fanfare, on a public website.

The most startling part of the TfL Annual Report is the explosion of highly paid people being given a good living. In 2002 the “corporation” had 59 people earning over £50K. That number has shot up to 344 this last year. In the category of people paid over £100K the number has gone from 9 to 40.

The 344 are not the whole picture. Across the whole TfL “group” the number paid over £50K is a staggering 821. The group employs 76 people who earn over £100K. I always thought that straightforward transport and construction types were relatively modestly paid people. Maybe they have been bigging themselves up so much with their £78 million of ad spending, in spite of having no competitors, that they think they are worth more than they really are.

This crew keep ramping fares but still need £2 BILLION of subsidies to keep all of their balls in the air.

TfL’s highly paid managers cannot run a tax system let alone a transport system. Robber Livingstone put up the Congestion Charge to £8 in February but the idiots have wasted the cash on running costs. Their margins have gone down from 44.2% to 41.8% in spite of the extra income. The extra £3 a day motorists are paying is not funding public transport improvements as Livingstone’s disingenuous ads are suggesting. No, instead it has just vanished in costs. Income up 17%, costs up 19%, surplus up a mere 10%.

This is a terribly inefficient way of turning our money into things that we actually want.