C-charge extension fails value for money test

The proposed congestion charge expansion has been dealt a new blow after being ranked "poor" value for money by the Government.

A system used by the Department for Transport rated the scheme - which would cost £125 million to set up and up to ?60 million a year to run - as being of "low" or "poor" benefit.

Major projects failing the value for money test would have little chance of being funded by the Government. But Mayor Ken Livingstone is able to ignore the ranking as he has the power to order the west London expansion without government approval. He also has sufficient cash after receiving permission-to borrow £2.9 billion over the next five years for transport schemes.

Transport for London admits the charge could have a "marginal negative impact" on shops, hotels and restaurants in the extension area. But it estimates benefits from cutting congestion and accidents would be worth between £65 million and £85 million. That falls short of the Government's formula, which says major projects should reap benefits of 90p for every £1.30 spent.

The ranking is the latest blow to hit the Mayor's plans. The expansion into Knightsbridge and Chelsea has already been rejected by almost two-thirds of Londoners, as well as leading business organisation London First - which championed the central London zone - and the Mayor's transport guru, Professor David Begg.

Yesterday the AA Motoring Trust said the current scheme was crippled by inefficiencies and "bullied" motorists.

Under the proposals, now out to a second round of consultation until 15 July, the zone's western boundary would be extended from Park Lane to the Shepherd's Bush roundabout, Harrow Road and Chelsea Embankment.

Transport for London estimates 33,000 fewer cars a day would enter the extension zone, speeding up a typical journey by five minutes.

As "sweeteners", 20,000 residents outside the extension would qualify for the 90 per cent residents' discount, while the zone would end half an hour earlier at 6pm.

TfL also proposes to exclude Paddington station and St Mary's Hospital from the enlarged zone by allowing free access from the A40 Westway flyover.

But critics said the scheme's poor value rating should force Mr Livingstone to scrap his plans. Lynne Featherstone, Lib-Dem transport spokeswoman on the London Assembly, said: "How many more people are going to have to point out that the extension of the congestion charge zone is impractical, unworkable and fundamentally flawed?

Angie Bray, Conservative congestion charge spokeswoman, said: "We are being crowded out with views which are warning Ken Livingstone not to go ahead."

A TfL spokesman said the value for money rating had failed to take into account the health, environment and quality of life improvements. Had these been included, its rating would have improved, he said.