From February 2007, it will extend to include most of Kensington, Chelsea and Westminster, a move that will cause administrative nightmares for companies with vehicles travelling into the zone.
Livingstone has attempted to soften the blow by ending the charging period half an hour earlier, at 6pm, although such a move will do little to appease fleets whose drivers enter London during working hours.
The daily charge of entering the existing zone increased in July this year from £5 to £8. For those participating in the fleet scheme the daily cost has increased from £5 to £7.50.
As well as offering a discount to company drivers who regularly enter the zone, the fleet scheme ensures less of them incur penalty notices for forgetting to pay the charge. Those paying monthly will receive three charge-free days and those who pay annually will have 40. But one of the biggest concerns for fleets is the amount of paperwork the charge generates.
Richard Rose, operations manager at pharmaceutical company Astra Zeneca, who manages a fleet of 2,700 cars, said: ‘The administration involved for us is phenomenal. I have someone whose sole job it is to clear the charges. You need the option of referring the charges back to them so they can contact the driver.’
Debbie Floyde, fleet manager for publishing company Emap Automotive, said: ‘Administering the charge is a bigger issue for us than handling all other fines put together.’
But some fleets report that some administrative problems concerning the scheme have been ironed out. Phil Redman, UK fleet manager at computer company IBM, said: ‘Fines have decreased for us and Transport for London has sorted a lot of the administrative glitches.’
Motor industry executive Jim O’Donnell has warned businesses could be driven out of London because congestion charging and other rocketing costs are making it impossible to trade profitably. The managing director of BMW UK revealed the staggering cost of operating within the congestion charging zone, listing hundreds of thousands of pounds of unavoidable costs that have to be taken into account before a business can even start trading.
And with London set to host the Olympics in 2012, costs could rise so high that independent vehicle dealers will be driven out of the capital.
He said: ‘Inside the M25, the vast majority of motor dealers are loss making and this year, two of our dealers simply closed their doors as they could not see how they would turn around their businesses.’
O’Donnell hit back at attacks on the high cost of vehicle servicing in the capital, arguing that the firm’s dealership in Park Lane would spend £200,000 on congestion charging a year, rising to £300,000 next year. A further £700,000 has to be spent on parking.
He added: ‘Before we open, we have a £1 million bill. It is little wonder that dealers have to charge £100 an hour for servicing. Given the international focus on London between now and 2012, it is doubly important that companies like BMW can justify remaining in London on straightforward commercial grounds.’
Fleet News round table delegates call for change
A FORMAL proposal for changing the way the congestion charge is operated could be presented to Transport for London after fleet managers supported the idea at an industry discussion.
Fleet managers attending a Fleet News Round Table meeting, held in association with National Car Rental, said the cost of handling congestion charges was becoming unbearable. Every aspect of handling the congestion charge can be a nightmare, according to fleets, and as a result administration and staff costs have to rise to cope with the problem.
Since the congestion charge was launched in February 2003 many fleet suppliers have been forced to employ staff to specifically deal with fines.
Managers supported the idea of creating a list of the issues they faced every day and an agenda for change which would tackle some of the biggest problems.
This would then be presented to Transport for London. However, some fleet operators agreed that many drivers were now more aware of the charge and the number of fines were going down.
Click here to download the official charging zone area map.