£31m: The cost of "tweaking" London's congestion charging system

London Mayor Ken Livingstone has been forced to approve an additional payment of £31m to Capita to improve the process for enforcing penalty notices on the thousands of motorists who are failing to pay the controversial congestion charge for driving into the capital.

Capita is responsible for administering the £5 a day charge as part of the £230m five-year contract with Transport for London (TfL) and uses around 700 cameras to cross reference number plates with a database of drivers who have paid the fee.

Motorists who fail to pay by midnight are supposed to be sent a penalty notice but TfL admits that repeat offenders who deliberately flout the charge every day are only being sent a quarter of the notices they should be.

Along with the success of the scheme in reducing the volume of traffic that enters London each day, lost revenue from penalty notices that are not being followed up has already forced the mayor to halve the expected money from the scheme down from £120m a year to £65m a year.

A spokeswoman for TfL said the additional funds, to be spread over four years, and changes to the system are just "tweaking" that will ensure the congestion charging scheme pays for itself.

She said: "This is a completely unprecedented scheme; we didn't know how it would pan out. Five months in we have seen it basically just needs a bit of tweaking and further refinement and that is what this investment aims to do. Through the increased issue of penalty charges and improved enforcement procedure it means we will be getting revenue in, which means within five years of the contract the investment will pay for itself."

The £31m will be spent on training and recruitment of staff at its call centres and improvements to the IT systems behind the scheme. The TfL spokeswoman said the major changes would be implemented during October and the rest completed by the end of March next year."

The move follows a report from accountants Deloitte & Touche, which found Capita would not make any profit from the congestion charging contract based on current revenue levels from the charge and fines.

Capita declined to comment.