Income and Costs
TfL's annual report for 2006–7 shows that revenues from the congestion charge were £252.4m over the financial year, representing 8.5% of TfL's annual revenues. More than half of this was spent on the cost of running the toll system, at £130.1 million. Once other charges were deducted, the congestion charge brought in an annual operating net income of £89.1m for TfL. This income compares with TfL's total revenue from bus and tube fares of £2,269.4m, or 76.6% of revenue before costs, or grants from central government of £2,390.3 million.
The initial operating revenues from the congestion charge did not reach the levels that were originally expected. Within six months of the start of the scheme, the reduction in traffic had been such that TfL were predicting a £65 million revenue shortfall.
By law, all surpluses raised must be reinvested into London's transport infrastructure; at the start of the scheme it was anticipated that this would be around £200 million. According to a report issued in February 2007, the initial costs of setting up the scheme were £161.7 million, with an annual operating cost of about £115m anticipated. Total revenues over the first three and a half years had been £677.4 million, with TfL reporting a surplus over operating costs of £189.7 million. The Bow Group, compiled from TfL data estimated that by 2007 the project had only returned a modest £10 million profit.
Although Parliament has limited the amount that authorities can borrow, for some time it had been speculated that the regular income obtained from the congestion charge and other revenues could be used to securitise a bond issue that finances other transport projects across London. TfL issued their first bond for £200 million in 2005, to be repaid at 5% interest over 30 years. TfL plans to borrow £3.1 billion more to fund a 5-year transport programme across London, including works on London Underground and road safety schemes.
| Revenues (£m) provisional | 2004/5 | 2005/6 | 2006/7 |
|---|---|---|---|
| Standard daily vehicle charges (currently £10) | 98 | 121 | 125 |
| Enforcement income | 72 | 65 | 55 |
| Fleet vehicle daily charges (currently £7) | 17 | 19 | 27 |
| Resident vehicles (currently £4 per week) | 2 | 2 | 6 |
| Other income | 2 | ||
| Total revenues | 190 | 210 | 213 |
| Total operation and administration costs | (92) | (88) | (90) |
| Net revenues | 97 | 122 | 123 |
| Expenditure (% of operating revenue) | 2004/5 | 2006/7 |
|---|---|---|
| Bus network improvements (incl. vehicles, garages & shelters) | 80% | 82% |
| Road and bridge maintenance & upgrades | 11% | |
| Road safety (incl. research & campaigns) | 11% | 4% |
| Walking & cycling programmes & publicity | 6% | 2.5% |
| Distribution and freight (incl. review of a London lorry ban) | 1% | |
| "Safer routes to schools" initiative | 2% |
Read more about this topic: London Congestion Charge
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