Unpaid ULEZ fines prompt TfL budget concerns

The expansion of London’s Ultra Low Emission Zone was described by its opponents as nothing more than a money making scheme. It’s therefore ironic that Transport for London’s (TfL) finances are now in such a parlous position because of it that further transport investment is threatened.

The situation is such that Neil Garratt, Chairman of the Budget and Performance Committee, said yesterday:  ‘If TfL’s finances and the Mayor’s plans are not based on reality, they cannot be delivered.’

As of September this year TfL was owed £376m in unpaid Penalty Charge Notices for the ULEZ, a figure that represents 83% of their total bad debt (£450m). Four years ago TfL’s bad debt was around £160m.

Yesterday, the London Assembly Budget and Performance Committee addressed this issue in a letter sent to the Mayor relating to the the financial results of the Greater London Authority Group for 2023-24.

The committee acknowledges that TfL made a revenue surplus in that period but questioned its sustainability. Without the financial support from Department for Transport, that surplus would be a mere £19m.

Furthermore, TfL ‘s accounts reported £42m of exceptional costs, which the committee suspect are not as ‘exceptional’ as they might be and stand a good chance of recurring. 

In their letter, the committee ask for information on the ratio of bad debt charges to standard charges before and after the ULEZ expansion and for details of any new approaches to managing bad debt that were introduced when the ULEZ was introduced and expanded.

Specifically, they recommend: ‘TfL should review the causes of the increase in its bad debt charge since 2021-22 and look at appropriate measures to increase collection levels for all road user charging. TfL should seek to conclude this exercise in time for it to be reflected in the 2025-26 Budget and break it down for each type of road user charge.’

The committee also look at the TfL fares freeze which is subsidised by the Greater London Authority. They recommend that: ‘The 2025-26 Budget proposals should explicitly confirm whether the Mayor will continue to provide ongoing funding from GLA funds for the current fares freeze, and be clear on the source of the funds.’

Neil Garratt AM, Chairman of the Budget and Performance Committee, said: ‘The Ultra Low Emission Zone appears to have contributed to a near £300m increase in bad debt in three years, an urgent financial problem for TfL.

‘Such large sums of money being owed to TfL, which may not be recoverable, means that much-needed transport investment projects might be scrapped.

‘That is why we have today called on the Mayor to look at appropriate measures to increase collection levels for road user charging schemes, and also to provide details on the ratio of bad debt charges before and after the ULEZ expansion into outer London in 2023.

‘It is important for Londoners to know whether the ULEZ expansion is delivering as expected on the financial side, as well as the public health side.

‘If TfL’s finances and the Mayor’s plans are not based on reality, they cannot be delivered.’