A possible £260 million business rates windfall for City Hall could kick-start plans for new road user charges across the capital, the London Assembly heard yesterday.
Assembly members (AMs) were taking their first look at Sadiq Khan’s budget plans for the financial year 2022/23 – some £14.7 billion of spending helped by an 8.8 per cent council tax hike amounting to £31.93 a year for Band D households.
The Mayor described the budget as “pro-business” and said it will help pay for policing, fire services and transport alongside skills training and “new deal” spending on young people and a decarbonisation boost to post-Covid economic recovery, making London a “safer, fairer, greener city”.
Lack of government support had left him with no alternative but to raise council tax, Khan added. The £31.93 increase will be composed of £10 for policing, £1.93 for the fire service, and £20 for Transport for London, which is expected to add up to some £170 million over three years.
With passenger numbers still well below pre-pandemic levels, TfL could only balance its own 2022/23 budget by securing £1.1 billion from Whitehall – a bailout still not agreed despite current funding support arrangement running out on 4 February 4 – and the beleaguered network would need new revenue to meet government requirements to break even from April 2023, Khan said.
However, new government rules mean that £258.8 million in City Hall business rate income that has been held in reserve against valuation appeals will now be available for spending, the meeting heard. Khan has earmarked some £217 million of this for “infrastructure projects to improve London’s air quality and environment”.
Budget papers from TfL presented at the meeting assumed “a widening of road user charging schemes” and Khan’s chief of staff, David Bellamy, confirmed that options included further extending the ultra low emission zone area and new charges on all but the cleanest vehicles, as well as the TfL-proposed “boundary charge” on non-London registered vehicles entering the city – a measure ministers have already pledged to veto.
Those plans were outlined earlier this month alongside longer-term ideas for a wider “dynamic” pay per mile road charging system replacing all current schemes, with analysis for City Hall warning that vehicle congestion cost the capital £5.1 billion last year and that car traffic will need to reduce by 27 per cent by 2030 to meet climate change targets.
The prospect of a business rate windfall prompted AMs to put down amendments to the budget, with the Green Party group proposing a “resident empowerment fund” to help “representative resident groups” fund responses to influence major property developments and Liberal Democrat AMs seeking a City Hall-based building safety support hub for leaseholders and building owners.
Both amendments were approved by the required simple majorities, with Labour members abstaining. Khan must now consider them, though City Hall budget rules require a two-thirds majority to change the final budget when it comes back for a final decision on 24 February.
AMs also urged the Mayor to boost spending on public toilets and pedestrian crossings, and supported a motion from Green Am Sian Berry for the full costs of cancelling the Silvertown road Tunnel to be made public.
The meeting can be viewed in full here.
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