Cash flow benefits and reduced administration will accrue from next month for almost 9,000 businesses that are enrolled on the London congestion charge Fleet Auto Pay scheme.

Transport for London (TfL) has responded to fleet demand and decided that businesses will no longer pay in advance for estimated usage.

Instead, Fleet Auto Pay account holders will pay charges incurred by registered vehicles for actually driving within the zone during each monthly account period.

Sean Conroy, senior stakeholder partnerships manager at TfL, said fleet account holders had requested the administration change for some time and the decision to change service provider, from IBM to Capita, had enabled the enhancement to be made.

TfL announced the contract provider change in January last year and said it included the provision for a number of improvements to the congestion charge scheme that would make administration easier and more straightforward for customers. Capita took over day-to-day operation late last year.

Conroy said: “Fleets were either under-estimating or over-estimating usage and then always playing catch-up when settling their monthly account. Now their bill at the end of each charging period will reflect actual usage.

“We are in regular dialogue with Fleet Auto Pay account holders and this was one of the first changes they requested.

“It is difficult to make changes when in contract so introducing a new service provider was the right time for the enhancement to the service to be made.”

Fleet Auto Pay was set up in 2011 and it subsequently became apparent that it was perhaps not operating in the best interest of fleets.

Conroy said that TfL wanted congestion charge administration to increasingly be an online ‘self-serve’ function, rather than fleet decision-makers contacting a call centre for help and advice.

What’s more, Conroy hinted that further administration enhancements were being developed and were expected to go live early in 2016, with the change in service provider enabling the developments to take place as a condition of the new contract.

He added: “We have met about 40 of the biggest fleet users of Fleet Auto Pay and they have welcomed the enhancements we have made.”

In addition to cash flow and administration benefits – Fleet Auto Pay registration will be quicker as businesses no longer have to estimate the volume of vehicle journeys into the London Congestion Charge zone – Conroy said data would allow organisations to better manage vehicle utilisation.

“Each monthly statement will reflect actual usage, so the information could be used by fleets to better manage journeys and vehicle usage. It may be that journeys can be amalgamated,” he said.

Fleet Auto Pay is available to organisations with six or more vehicles and benefits include a £1 saving on the daily congestion charge per vehicle – £10.50 instead of £11.50. There is a £10 annual registration fee for every vehicle registered to a Fleet Auto Pay account.

There are currently 8,799 active Fleet Auto Pay accounts and the change will be reflected in fleet statements from June. There are four monthly payment runs, meaning that, depending when businesses receive their statements, all fleets are expected to be benefiting from the new regime by July.

Letters have been sent to Fleet Auto Pay account holders explaining the change and they have been tailored to reflect the time in the month when direct debit payments are made.

Conroy said: “The aim is to get all Fleet Auto Pay account holders self-serving so responsibility for the whole account is with the organisation using it.”

The Freight Transport Association (FTA) has welcomed the change, which it said brought Fleet Auto Pay into line with the way that all other London Congestion Charge account schemes operated.

Natalie Chapman, head of policy for London at the FTA, said: “It is good news for businesses as it means they only pay for London congestion charge usage and don’t have cash tied up in another organisation’s bank account.”

Once registered for Fleet Auto Pay, customers from June will pay monthly in arrears by direct debit. Account holders’ May statements will detail the last estimated  pre-payment.