Two decades in, what can other cities learn from the London congestion charge?

Back in 2000, there was consensus that traffic on London’s streets was in crisis. Politicians, businesses and the public agreed that traffic conditions were damaging the central London economy and radical action was required – the ‘burning platform’. Central London traffic moved slower than bicycles and congestion was costing millions a week to the city’s economy.

The introduction of the London Congestion Charge was enabled by creation of Mayoralty and TfL in 2000 and it was a central manifesto commitment for incoming Mayor Ken Livingstone. The scheme was launched in February 2003 within the first Mayoral term.

The scheme in action

The original scheme was an area-based charge (covering the same area as today). It operated 7am-6.30pm Monday to Friday and with a daily charge of £5. Compared to many cities (particularly those in the US and Australia) introducing the scheme was easier because a small minority of mostly affluent people drove to central London. Driving was clearly slow, parking costs were high and the availability of free parking at work was falling.

London also benefited from a dense public transport network. In 2000, just 14% of people entered central London by car – mostly those on a higher income with access to free parking. A high quality, affordable and accessible alternative was vital in ensuring the central London Congestion Charge was acceptable to the public; the scheme was launched alongside major investment in public transport, walking and cycling. For example, bus kms increased by 20% between 2000 – 2003 and fares were frozen (funded from the income generated by the charge).

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The initial daily charge of £5 was chosen to reflect the approximate cost of congestion and to encourage a sufficient change in travel behaviour. Over time the fee has increased to maintain effectiveness and raise revenue – in 20 years the charge has risen to £15 per day. Congestion charge revenues were guaranteed for transport investment in London at a time when improvements were highly visible. This connection (or ‘hypothecation’ in the jargon) mitigated criticisms that it was “just another tax”. Discounts and exemptions were used to reduce costs for those who could not travel by public transport – such as residents within the zone and the disabled.

A large scale monitoring programme was essential to enable TfL to set out the successes, identify any issues and rebut criticism pricing schemes need to be able to evolve – TfL planned in the flexibility and resource to allow them to respond to emerging evidence, stakeholder and political concerns. This included changing the charging hours, extending their duration and over the course of the whole 7 day week.

Assessing the impacts

From the very start the policy’s metrics were promising: the £5 charge led to a 15% reduction in traffic in 2003 and traffic has fallen in central London since then, despite a growth in the city’s population by 15% since 1999. Between 2000 and 2003, bus usage in London increased by around 30%. Although the scheme was justified in terms of its congestion benefits, over time these have been eroded despite traffic remaining stable - because road space was reallocated to more sustainable modes. As a result, traffic speeds in central London are now as low as they were when the congestion charge was introduced in 2003, although the volume of traffic has fallen significantly.

Since its introduction, the focus of charging in London has changed. Over the last decade, pricing schemes in London have increasingly focused on tackling environmental challenges, particularly air quality, rather than congestion. The introduction of the complementary Ultra Low Emission Zone (ULEZ) has helped improve air quality by accelerating the transition away from older (dirtier) vehicles. In the future, with a fully electric vehicle fleet, the focus of the charge will need to change again. Improvements in technology have facilitated improvements to the customer offer, such as auto-pay, and have improved the enforcement of the scheme – but there is an opportunity to think broader in the future with mobility-as-a-service and other emerging transport modes.

What did London learn?

• London paved the way for congestion pricing in world cities – it has succeeded by being embedded in a wider transport strategy for the city, that is highly multi-modal in nature and clear on the outcomes it wants to achieve for the city.
• The most effective schemes are embedded within a wider transport strategy and supported by other measures that tackle demand, service and incentive factors.
• Build a coalition of support and engage creatively with citizens from the earliest stages – but accept that pricing schemes will always be controversial.
• The adage that you should ‘keep your friends close but your enemies closer’ applies: TfL worked closely with affected stakeholder groups, for example through a Business Reference Group to identify and resolve issues early.
• Schemes are most effective where use of alternative modes is already normal and those alternatives are high quality, affordable and accessible.
• The destinations within the congestion zone should be sufficiently attractive/essential, that people will adapt their mode of travel rather than decrease visits.
• Be the experts on your own scheme – investment in robust and wide-ranging monitoring will provide the evidence to demonstrate success and rebut criticism, or adapt the scheme where things aren’t working.
• Accept that pricing schemes are not like infrastructure – they need constant review to maintain the benefits and reflect changing circumstances (and priorities).
• Once congestion pricing is a normal part of life in your city, it will become (somewhat) easier to enhance and expand your scheme.

Ten principles for effective road pricing

At Arup, we believe road pricing can be an essential component of an integrated transport strategy for a city that will be more sustainable, healthy and successful in the future. We have developed ten recommendations for cities considering road pricing as part of their city wide planning and transport strategy: