The Sunday Times of the 2nd May 2004 reported that deals between TfL
and Capita ,the private contractors, hired to run the congestion
charge may have wasted £75m of taxpayers' money. The paper reported:
Quote
Details of the payments — which are almost equivalent to the
first-year profits from the scheme of £78m — have been revealed by
senior sources with intimate knowledge of the scheme's financing. One
source said Livingstone was effectively "held to ransom" by Capita,
the main contractor.
"We gave way to them for political reasons, because it was the mayor's
big issue, the election was looming and nobody else could take over,"
he said.
Livingstone is expected to point to the success of the congestion
charge — a £5-a-day levy on drivers that has cut traffic in central
London by 30% — in his re-election campaign, which will be launched
this week.
But, according to sources inside Transport for London (TfL), the body
that runs the congestion charge, the mayor, as TfL chairman, has
failed to disclose a series of secret deals with Capita. The company
won the congestion charge contract — worth £46m a year — by being the
lowest bidder.
It runs the payment call centres and computer systems as well as
chasing the fines — usually £40 — from drivers who fail to pay the
charge.
However, soon after the scheme was launched in February last year it
became clear Capita was not making as much money as it expected. The
number of people who did not pay the charge was running at 8,000 a
day, twice as many as Capita had budgeted for.
In its contract with TfL, Capita was obliged to chase up 4,000
non-payers a day for no extra money, but it would be paid £2.06 for
every fine it recovered over that number. According to one senior TfL
insider, Capita thought this was not enough and refused to follow up
more than 4,000 fines a day.
"They held the authority to ransom. The authority was losing more than
£160,000 a day (in fines)," said the insider.
The stand-off continued for six months until TfL had lost an estimated
£19m in uncollected fines. Although Capita was in breach of contract,
TfL backed down and agreed to pay the company an extra £31m to
increase the number of penalty charge collections.
Since the launch of the scheme, TfL has asked for 246 changes to the
contract. It did so despite the fact that it had to pay Capita to
implement each change plus an extra 12% in fees. In total, Capita was
handed an additional £15m.
Livingstone's civil servants also generously picked up the £3.5m bill
for an emergency call centre when the contract clearly stipulated that
Capita was obliged to pay.
A spokesman for TfL said the charge was aimed at cutting congestion,
not raising income. TfL had been forced to pay the extra £31m because
"to put a contractor into default would not have served any purpose".
A Capita spokesman denied it had defaulted on its contract, and said
it had delivered the congestion charge on time and in budget.
Unquote

IIRC Capita has form with regard to poor delivery on contracts – do
they not feature regularly in Private Eye?

Are the activities of TfL subject to review by either the District
Auditor , being part of a local authority or the National Audit
Office?. Will they be investigating this matter?

Again IIRC I was under the impression that the congestion charge had
two purposes to reduce congestion AND finance public transport
infrastructure improvements within London. £78 million could bring
forward the work on the Cross River Tram Link to cope with the
congestion that will arise at Kings Cross/ Saint Pancras once the CTRL
arrives. Alternatively £78 million could bring forward work on the
East London Line.