Transport for London says it is exploring charging vehicles registered outside the capital for entering Greater London to help its troubled finances if ministers do not “play fair” in the ongoing negotiations about its future funding.
The idea is included in a report commissioned by Sadiq Khan in July to review TfL finances following the government’s first bailout of the transport body after its finances were devastated by loss of fare income due to the pandemic.
The report restates a long-standing desire for TfL to retain vehicle excise duty (VED) raised from London-based motorists for its own use, rather than than most of the money being used for roads spending across the rest of the country. The Mayor and TfL might support the “boundary charge” idea as an alternative, should the government decline to devolve VED.
City Hall says VED collected in the capital amounts to £500 million a year and argues that roughly the same sum could be gathered from a boundary charge set at £3.5 daily, with the additional benefit of reducing the number of weekday car trips into the capital by 10-15%.
TfL has long made the case that not being able to retain VED raised in London means that road maintenance costs have to be met from within its overall budgets, which have become increasingly dependent on public transport fares, largely paid by Londoners.
The Mayor believes he possesses the “broad powers” he would need to implement a boundary charge as a form of road-user charging scheme in addition to the current Congestion Charge, Ultra Low Emission Zone and Low Emission Zone, the last of has covered the whole of Greater London since its introduction in February 2008 and therefore provides some of the border technology that would be required.
The boundary charge suggestion, which On London understands will not necessarily be included in the full proposals for its future funding TfL has been told by the government to present by 11 January next year, is being made amid continuing tense relationships between the Mayor and TfL and the government.
Although negotiations are formally between TfL and Department for Transport and treasury officials, Boris Johnson’s transport adviser Andrew Gilligan, formerly a media supporter of the Prime Minister when he was London Mayor, has been closely involved.
Gilligan, who has been installed as a “special representative” of the government on the TfL board, was involved in sharp exchanges with TfL chiefs and the Mayor at a board meeting held earlier this week – the first one Gilligan has played any part in since being given the role – when he complained about not being shown budget documents in advance and issued a warning about “our relationship in the future”. He was rebuked by senior TfL officers for displaying “a fundamental lack of understanding of the governance of this organisation”.
The second of two emergency support packages for TfL was preceded by accusations by Khan’s deputy mayor for transport, Heidi Alexander, of “political game-playing” by the government and leaks of a letter to the Mayor from transport secretary Grant Shapps which included a proposal for vastly enlarging the current Congestion Charge zone to the North and South Circular roads as a possible way of increasing revenue.
There is cross-party support on the London Assembly for London retaining VED raised in the capital.The idea of a boundary charge of £10 was proposed during the 2012 London Mayor election campaign by Liberal Democrat candidate Brian Paddick.
The report of the TfL Independent Review, by TC Chew, Stephen Glaister, Bridget Rosewell and Jonathan Taylor, is here.
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