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Mayor considered scrapping £250m congestion charge contract
Due to Capita's poor performance...but decided to pay out £31m extra instead

By Andy McCue

Published: Friday 12 September 2003

London's controversial £250m congestion charging scheme was being run so badly by Capita that the Mayor, Ken Livingston, admitted he had decided to scrap the contract if it wasn't renegotiated.

Livingston was speaking at a meeting of the Budget Committee of the London Assembly where details of the contract with Transport for London (TfL) were finally made public after a year of pressure from members.

Earlier this year TfL renegotiated the contract and agreed to pay Capita an additional £31m over the course of the five-year contract to allow for improvements to the computer infrastructure and staffing because of problems with the system.

These included problems with Capita distinguishing between the letter O and the number zero and the letter I and number one on number plates, and a failure to follow-up all those who didn't pay the £5-a-day charge for driving into the centre of London. Tfl has admitted that Capita has paid contractual penalties because of performance failures.

Livingstone said at the meeting: "The contract was performing so poorly at the point of customer interface that [transport commissioner] Bob Kiley and myself had decided we would terminate if we couldn't renegotiate it."

But Livingstone said Tfl was also at fault in underestimating how many motorists would attempt to avoid paying the charge.

Angie Bray, London Assembly Conservatives congestion charge spokeswoman, said the rushing through of the contract has cost Londoners "millions" of pounds.

“It is clear that Livingstone was far more concerned about getting the scheme in quickly rather than negotiating a good deal for Londoners. The contracts have been re-written in order to grant guarantees that should have been there in the first place. Livingstone’s haste has cost millions of pounds of extra payments to Capita when that money could have otherwise been spent on improving public transport in London," she said. A spokesman for Capita said "service payments" were an element of any contract of this nature and that the company is currently meeting standards set under the new deal. "We've consistently met the service standards. You can never be complacent but things are progressing well and we are totally focussed on meeting the new targets," he said.