London Congestion Charges Scheme - Case Study Example

London's Congestion Charges Scheme: A Critical Analysis A Government's Measure to solve Traffic Congestion Problem An Overview Report by: Table of Contents S. No. Title Page no. 01. Introduction 03 02. History of Congestion 04 03. Future of the problem 04 04. Aim of Policy 05 05. Exemption for motor cycles 06 06. Political conflict 07 07. Controversies 07 08. Performance of Policy 08 09. Current Amendments 09 10. Technological Implications 11 11. Conclusion and Recommendations 12 12. References and Bibliography 13 13. PEST analysis (Appendix A) 14 14. MOST analysis (Appendix B) 15 15. SWOT analysis (Appendix C) 16 10. Critical Success Factors (Appendix D) 17 1. Introduction: The congestion in big cities has evolved as major problem in the most of the countries of the World. The Governments of these countries are introducing different schemes and measures in order to deal with the complex nature of problem. This report is aimed at undertaking a critical analysis of the London congestion charges scheme with special attention to the areas outside the central city, which is being introduced in order to control the traffic congestion. The report evaluates all the social, political and technical factors related to the introduction of Motorway tool scheme or congestion charge as per mileage used. The report includes the up to date data and the estimations provided for the analysis. The approach attempted is unbiased towards the policy and its implications. 2. History of Congestion in London: London is one of the most important trade centre and a historically developed big city. According to the figures by GLA (2001) the total population of London was 7.4 million people which has risen by 7.2% in the last decade. 4.5 million people have their employment place in London, and the tourism figures report 13.5 million visitors from around the world every year. The traffic congestion in the Central London is the resultant factor of the increase in the employment. On the other hand the increase in the employment has also increased the income of the people increasing the leisure trips to London. The trend increased the off-peak trips contributing to the increment of the problem. With the introduction of congestion charges in the downtown areas of London the most of 3.Future of the Problem: Reported growth estimation in the population is 8.1 million by 2016. With the increase in population the jobs will also increase at the level of 5.1 million. (GLA, 2002). With all the forecasts the other factors also indicate towards increasing travel to the London City. According to the TfL the Vehicle traffic is expected to increase at a rate of 4.5 - 7.5 percent. Motorcycles accounts for approximately 54% of the transportation means of the people entering the area. Figure 1: Going Downtown 7:00 to 10:00 AM London "The London congestion charge is a fee for motorists entering the Central London area. London was not the first city to adopt congestion charging, but as of 2006 it is the largest city to do so. The organisation responsible for administering the charge is Transport for London (TfL). 4. Aim of Policy: The stated aim of the scheme is to encourage travellers to use public transport, cleaner vehicles, bicycles, motorcycles or their own two feet instead of motor cars and vans, thus reducing congestion and allowing for faster, less polluting and more predictable journeys. TfL says that much of the money raised in the scheme is invested in public transport. The fee was introduced on 17 February 2003. The registered owner of a vehicle that enters, leaves or moves around within the congestion charge zone between 7am and 6.30pm, Monday to Friday must pay the daily fee of '8. If the charge is not paid by 10pm on the day of travel the charge is increased to '10: this is intended to cut the number of last-minute payments. Failure to pay by midnight means a fine of at least '50. From 17 February 2003 until 4 July 2005, the fee was '5. Some vehicles such as buses, minibuses (over a certain size), taxis, emergency service vehicles (i.e. ambulances, fire engines and police vehicles), motorcycles, alternative fuel vehicles and bicycles are exempt from the charge (technically, some of the exemptions are 100% discounts and still require registration). Residents of the zone are eligible for a 90% discount if they pay the charge for a week or more at once. In September 2005, the western expansion of the congestion charge was confirmed, and it will come into effect in February 2007." (Wikipedia, 2006) 5.Exemption of Motorcycles: After the implementation of the policy, motor cycles became an important alternate for most of the people. The question was raised about the inclusion of two wheelers under policy. Addressing the problem for the Mayor Ken Livingstone said: "Both motorcycles and scooters are exempt from the congestion charge as they do not cause congestion. I would like to make it crystal clear that I have absolutely no intention whatsoever of making scooters and motorcycles pay the congestion charge. (BMF) 6. Political Conflict: Ken Livingstone's congestion charge has delivered what it promised. Despite all the opposition Conservative Party, the Right of centre press and its commentariat (with the liberal press in a tight second place) the daring attitude towards the implementation of the policy made it possible to solve the triggering problem. The appropriate policy - road pricing and congestion charging - stared him in the face. Darling and Blair's pointed lack of endorsement of Livingstone's plans is obvious witness to lack of spine; Darling once famously refused on the Today programme seven times to offer any support for the principle of congestion charges. Now he wants to open a national debate on the matter. The US Embassy in London has protested that charging US embassy staff and other diplomats is in violation of the 1961 Vienna Convention, which bars the taxing of foreign diplomatic staff. They've made formal complaints to Ken but he's ignored them. When the fee was raised from '5 to '8 in July 2005, US Embassy staff stopped paying the charge. (London Con Charge, 2006) 7. Controversies: Criticism a: The policy has been criticised since its implementation in the centres of the London City because of the regressive nature of the policy of charging the poor riders at the same rates as those of charged by rich people. Since the policy covered the workers also it faced a strong opposition from different pressure groups. It will not be easy to justify such policies in the relatively low traffic pressured areas outside the city centre. Criticism b: The implication of such policies will also deter the tourists and the citizens to take leisure trips to the city, which will in turn negatively effect, the business of shops in those areas. Criticism c: Capita RAS, the operating company of the congestion charges was also under controversy and was fined by the mayor regarding its poor performance dealing with both drivers and equipment. The company took amount of extra '31 million by the London Mayor in June 2003 to help administer the charge although the company was earning '7 million profit from running the congestion charge each year. 8. Performance: TfL has issued a preliminary report on congestion charging that considers the effectiveness of the scheme after three months of charging. It focuses on the traffic and transport effects of the scheme, while acknowledging that more comprehensive assessments will be forthcoming at six-month and twelve-month intervals. Traffic delays within the congestion zone have fallen by 30 percent Journey times to, from and across the congestion zone decrease by an average time of 14 per cent. The congestion charge is estimated to generate '68 million for expenditure on public transport this year and between '80 million and '100 million in future years. Statistics: (Source: Transport for London, 'Congestion Charging: Six Months On', 2003). In the beginning of project it raise '130 million from congestion charging and fines in a full year for TfL which were estimated by the City investment that the income stream is proven as solid was sufficient to service up to '2 billion of self-standing additional borrowing. These borrowings helped the TfL in eking its activities related to traffic congestion control and planning and implementing new projects. (Hutton, 2003) With the increase in travelling to London the problem of congestion and insufficient transport system is rising. Most of the former Government's did not paid much attention or failed to address the problem in effective manner. This not only imposed economic loss but also resulted in shape of hours taking journey and losses in shape of fuel wastage and working hours. CBI (Confederation of British Industry) estimates congestion in London costs the economy about '15 billion. 9. Current amendments to the BILL: A bill was presented in the House of Commons in order to enhance the powers of Transport of London to deal with the problems risen due to the implementation of the London congestion charges. The bill demanded extension of powers of Transport for London. It was also demanded that further provision should be made in relation to schemes for congestion charging made by Transport for London and about London cabs and private hire vehicles. The powers were demanded enabling fixed penalty notices to be served in respect of certain offences relating to London cabs: about penalty fares in London: Transport for London should have powers to apply for anti-social behaviour orders for the protection of persons on or near premises or vehicles used for transport services provided by or under arrangement with, Transport for London. GLA roads and street management. 10. Technological Implications: "Most of the toll collection at booths located at the entry or exit of a charging zone. Regular users of the M4 near Bristol or M25 around Dartford are familiar with paying tolls to use the Severn and Dartford Crossings. There are countless other examples of tolled infrastructure in the UK and around the world. People who regularly drive in continental Europe is used to motorway tolls, with charges based on the distance travelled on the tolled road. Toll plazas can operate manually or automatically with coin bins. A recent innovation is the introduction of priority lanes for vehicles with an electronic tag that allows payment to be deducted automatically without a need to stop. The systems are simple to operate and well understood. They are sufficiently flexible to accommodate different charges for categories of vehicle or driver. The disadvantage, when compared to the electronic methods, is that the charges are fixed for a specific piece of road or crossing, or for entry to a specific area; so they cannot relate directly to the level of congestion at the time. Toll collection also takes time. A charge to enter a city centre via tollbooths is likely to cause unacceptable delay to drivers." (Commission for Integrated Transport, 2004) For implementing the charges according to the road usage depending upon the mileage covered by the user the physical method of payment cannot be implemented as the charges which will be collected will be fixed whether the user use the specific piece of road or crossing, or for entry to a specific area. This method will also not helpful in reducing the congestion in peak hours. The Toll collection will also be very time taking. This will also increase the travel time for the drivers. On the other hand the automated system of Cameras fitted on gantries read number plates passing vehicles. "Unlike microwave technology, GPS requires no overhead gantries and the necessary satellites are already in orbit. However, there is still a need for fixed or portable enforcement cameras, although these do not need to be as regularly spaced. Even though this technology is far more complicated than using microwaves, it is the only realistic option for any large-scale implementation of electronic charging. Again, the use of a smart card to automatically deduct payment is optional." (Commission for Integrated Transport, 2004) 11. Conclusions and Recommendations: With the above stated facts and figures it is clear that the success of congestion charges system implemented in London can be enhanced by applying the support system of charging of road usage depending upon the mileage covered by the user in the areas out side the city centre. Although there must be some opposition to be faced by the different pressure groups and the conservatives. But in order to eradicate the opposition, the policy should be implemented in a perfect manner to get the most desired results. The main objection is pouring the money collected in the personal pockets of the responsible people. There should be proper monitoring of the process from the collection to the allocation of funds in right direction of transport facilities provision to public. In order to convince the public regarding the policy it is important to evaluate the Rate of return of the policy being implemented and make the people get understanding and awareness regarding the benefits of the program. Although the present traffic congestion in the areas outside downtown is not reached the level so as to introduce the schemes like the London congestion charges. On the other hand the expense will not be easy to bear while the policy not earning enough revenue to back up the operating expenses. After analysing the political, social and economic factors it is suggested that the Government should not impose such charges in the areas except city centres where the implementation of these policies are inevitable. References/Bibliography: BMF, Lazer Motorcycles and Scooters Ltd. Available at http://www.lazermotorcycles.com/news.cfm Commission for Integrated Transport, (2004). Road User Charging: A brief guide to congestion charging, available at http://www.cfit.gov.uk/congestioncharging/factsheets/guide/ Greater London Authority (GLA), "The Mayor's Transport Strategy", 2001. p 26. GLA, Draft London Plan, June 2002, section 1A.4 and 1A.5, available at http://www.bartlett.ucl.ac.uk/ planning/information/sds/journal.htm Hutton, W., (2003). "Special Report Congestion Charges: There's a lesson in London's triumph". The Observer, Sunday March 2, 2003 available at http://www.guardian.co.uk/congestion/story/0,12768,905998,00.html London Con Charge, (2006). Congestion Charge Fact sheet, The Association of British Drivers available at http://www.abd.org.uk/london_congestion_charge.htm Wikipedia, (2006). London congestion charge, available at http://en.wikipedia.org/wiki/London_Congestion_Charge PEST ANALYSIS [A] Political Economic Social Technical *Stability of Internal & External political environment. *Change in the outsourcing trends. * Economic environment (Job market / UK's economic stability) affecting the scheme's performance / future. * Allocation of Monitoring system budget. * Interest / Inflation rates fluctuation affecting the scheme. * Long term future of the Scheme in its present state, (referencing economic changes). *Opposition by the people in case of increasing burden in shape of heavy taxes due to vehicle use. * Feedback information of the scheme performance from the public's perspective. *Change in the taste of people regarding tourism. * Changes in technological advancement regarding the registration vehicle data. * The benefits that new technology could bring to improve the schemes functionality. MOST ANALYSIS [B] Mission Objectives Strategies Tactics *The London congestion charges scheme is aimed at providing pollution free, time saving and easy travel to the London city and in the London city. *To facilitate the people by hassle free travel by eliminating useless trips to the Central London. *To reduce the number of accidents by reducing the no. of vehicles on the roads. *To encourage people use Public transport. *To attain lower traffic levels in the city to avoid congestion. *To cut traffic delays. *To increase speeds. *To achieve a pollution free environment. *To reduce the fuel consumption in turn reducing the demand. *To raise public funding in order to improve the transport system according to the future needs * To establish and maintain an well-organised and competent system by employing a body of capable expert staff. * To ensure that sufficient levels of staff are readily available to address issues of incorrect data processing. * To ensure that that the Police have sufficient powers in place to be able to enforce and convict convicted fraudulent suspects in breech of UK Law. * To ensure the smooth running of the Systems of vehicle traffic flow, and providing contingency plans to deal with potential problems. *To ensure the provision of latest technology such as CCTV cameras and mobile Camera teams regularly updated where and when required. *Ensuring system maintenance comprised of Number plate recognition software. * To ensure support provision through the call centres * Ensuring that the public are kept fully in touch with additional information being added to the card SWOT ANALYSIS [C] Strengths Weaknesses Opportunities Threats *Adoption of a usage per mile system to ensure congestion free Traffic all the areas of London. *Ensuring the safety of UK Citizens in case of accidents by controlling the no. of vehicles on the roads. * Saving the business loss due to the time taking travel to the employment places from the residence. *Helping in improvement of Supply chain of production sector by providing efficient transport through vehicles. . *The increased cost due to the technology implementation at wider level. *Increase in maintenance cost. * Increase in the overall cost of production of Goods due to increased transportation cost. *Inadequate Policing to stop and check suspected criminals and unlawful illegal entrants *Future technology advancements could ensure a safer and more secure system. *The ability to be able to modify the system in order to sell a modified version to other countries *Change in the outsourcing trend can effect the efficient call centre service. * Failure to update the system according to the changing technology. * Inefficient use and withdrawal of the amount collected in shape of charges collected from public *The possibility of opposition from the conservatives to implement congestion charges in the areas outside the city centre. * Opposition from the businesses facing the increase in costs due to the usage per mileage. *Expectations of privileged behaviour from different groups such as foreign ambassadors etc. CRITICAL SUCCESS FACTORS [D] The following are the Critical Factors for the successful implementation of the Policy : Law Enforcement Compliance measure Connectivity Reliability Availability of reasonable alternate Support from Political Leadership Appropriateness User Friendly system Customer support service Ongoing development and maintenance of system Read More