Out of Control Policy Blog

London's congestion charge: Much ado about nothing?

London implemented it's congestion charging scheme in February 2003 with two goals: 1) reduce congestion in Central London and 2) raise money to fund public transport.

The first years seemed to demonstrate the wisdom of the scheme: cars entering the charging zone fell 15% to 20% and congestion seemed to fall by 25% to 30%. Public transport was a big winner, capturing more than half of the trips into Central London previously taken by automobile. (The remainder were trips routed around Central, trips switching to off peak periods, avoiding trips altogether.) These early results led a number of economists to conclude the program was a success, despite implementation costs about double what was projected.

Recent data call into question whether the program has really reduced congestion. Despite the initial success, data from Transport for London (TfL), the government agency responsible for managing the system, show that travel times have returned to their pre-charing levels.

But the latest figures show the average speed for driving to work in 2006-7 was 9.3 mph, down from 9.9mph before the scheme began in 2003.

A dedicated TfL vehicle, fitted with equipment to measure distances and journey times, travelled along 7,000 routes in Greater London to work out the average speed at different times of day, including the morning rush hour. The slowdown is thought to be caused in part by extra traffic entering the central zone since the west London extension in February. More drivers are now entitled to claim the 90 per cent residents' discount to drive inside the zone and many are making the most of the 80p rate.

Meanwhile, new bus lanes and schemes such as pavement widening have squeezed available road space and there has been a rise in the number of green vehicles exempt from the charge. Motoring experts have warned that the congestion could worsen if Mr Livingstone brings in exemptions for band A and B vehicles including Ford Fiestas, Nissan Micras and Volkswagen Polos.

See also this column in the Sunday Times of London.

This shouldn't be surprising. The congestion charge really isn't what it is billed to be. It taxes cars; it doesn't manage the transportation network based on levels of congestion or other criteria related to what transportation planners call "level of service." A true congestion charge would be a system of road pricing, like the 91 Express Lanes or I-15 HOT Lanes in Southern California, where the price is set to maintain free flow traffic levels and speeds.

The London approach is a narrowly targeted "cordon charge." A boundary (e.g., Central London) is established, and cars and trucks that enter into the zone are assessed a fee (now about $16 per entry). Green cars, taxis, and certain other vehicles are exempted, and the price is not tied to a clearly defined level of service, travel speeds, or other indicator of congestion. In short, the London program does not actively manage traffic in a way that gives real meaning to the spirit of a real congestion charge.

Of course, TfL believes the program is a great success. The number of cars is still down, even if the average speed has fallen to pre-2003 levels and the delay per kilometer traveled now exceeds 2002 levels.

Samuel Staley is Research Fellow


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