Public sector pays the price

Congestion charging is here to stay. It looks like public sector staff will
pay the price for working in the capital – but there’s been no sign of
disruption on or off the roads. Jane Lewis reports

It has been hailed a triumph by some, and it certainly wasn’t the
"bloody day" that Ken Livingstone warned Londoners to expect.

But while it is still too early to call the congestion charge a success, it
is probably safe to say that anyone who took up William Hill’s 5:1 odds that
the charge would be scrapped by the end of the year, must have resigned
themselves to taking a hit.

Nearly three weeks into the scheme, there has been no sign of the widespread
disruption, violent public protest, or mass refusal to pay the £5 charge that
so many predicted.

Now it’s here, how are we going to live with it? And who will be most
affected? In the run-up to the launch, the most vociferous opposition came from
an unlikely coalition of Smithfield meat-workers and West End theatre staff,
who teamed up with solicitors Class Law to mount a High Court challenge on
behalf of all low-paid workers.

Taxing the poor

Both Livingstone and the company responsible for managing the scheme,
Transport for London (TfL), have long maintained that the impact on this group
would be minimal, claiming that 85 per cent of those on low incomes living in
or around central London don’t have cars anyway.

This was challenged in some quarters. "Poorer people tend to shift work
at unsocial hours when public transport is least available," claimed the

Nonetheless, the action was quietly dropped after raising just one tenth of
the £500,000 it needed to bring the case to court. Its sponsors claimed victory
because Livingstone has given assurances that he would at least consider
introducing a cheaper rate for drivers on low incomes.

The controversy still raging, however, relates to key public sector workers.
Here the scheme’s devisors appear to have shown remarkable inconsistency. While
government chauffeurs, police, firefighters and certain NHS staff carrying
equipment or drugs are exempt from the charge, the majority of NHS workers,
ambulance drivers and teachers are not.

"We are already hearing anecdotal evidence that schools in the zone are
being hit, with some teachers considering resignation," said a National
Union of Teachers spokeswoman.

For many, the prospect of spending an extra £1,200 a year just to get to
work is a step too far – particularly in the absence of any forthcoming deal to
help with the costs, "and there’s very little that individual schools can
do". One option under consideration is to raise the London Weighting allowance
to compensate for the charge. But this, as she pointed out, "is a very
blunt instrument".

Staff shortages

London Ambulance staff are marginally better off, having struck a deal with
employers that gives those working in the zone £550 per year towards the charge
– a move that will cost more than £250,000 a year.

This is more likely to put pressure on other NHS chiefs to follow suit –
particularly given strong language from unions. "This charge will tip many
on the breadline over the edge," said Unison’s London spokesman Geoff

The fear is that the charge will only add to the chronic staff shortages
already gripping the NHS in London, making it even more difficult to recruit
and retain doctors, nurses and paramedics. "It will add to the continual drip
effect, making it difficult for people to work in central London. Given the
choice of a job just inside the zone, or one outside, which would you
choose?" added Martin.

The strategy HR chiefs in the NHS appear to be taking is to tackle the
problem on a case-by-case basis.

Headed by Tim Higginson, personnel director at Guys & St Thomas’, they
have come together and set up an appeals panel. Given that the charge has so
far provoked just one recorded resignation (a clerical officer at Moorfields
Eye Hospital), this selective approach may well turn out to be the most

Recruitment and retention is likely to prove less of an issue in the private
sector, said Charles Cotton, adviser on reward and employment conditions at the
CIPD. "I don’t think someone is going to move out of central London
because of the congestion charge. Uncertainty about the economy means there
won’t be a large number of people wanting to move job at present," he

However, he noted, there is still widespread concern that the dire state of
public transport could prove the Achilles heel of the congestion charge.

"There may well be a lot of complaints from companies that staff are
arriving at work stressed and exhausted," said Cotton.

Employers foot the bill

Luckily, many staff may not have to worry about the cost. Research by law
firm Fox Williams shows that 35 per cent of London employers have decided to
foot the bill. But, as employment specialist Helen Monson pointed out, this
could have complicated implications for tax.

While business journeys can be treated as expenses under existing Inland
Revenue rules, the same is not true of journeys to and from work. Thus, if
employers choose to reimburse staff for travelling to work, it will be treated
as a taxable benefit. That could put an extra 40 per cent on the bill for an
upper-bracket taxpayer.

Employers taking this course of action, she added, could also face
challenges for unfair treatment from staff using public transport. If commuters
who drive to work are reimbursed for their journey, why not them too?

Path to flexible working

The charge may well have other implications for HR in London.

"There is a very real possibility that homeworking and more flexible
hours will become more popular," said the Institute of Directors,
"though this is likely to be confined to larger companies who can afford
to accommodate different working patterns rather than small business."

Are we likely to see an extension of the congestion charge elsewhere? The
short answer is yes. The launch of the scheme has attracted massive support on
a global basis, while in the UK, some 35 towns and cities, including Bristol,
Edinburgh and Nottingham, have announced an interest in following suit.

Indeed, individual congestion schemes may shortly be overtaken by something
much bigger. Sources close to the Government claim that widespread public
acceptance of Livingstone’s scheme – combined with its huge revenue-raising
potential – means that plans for a national road toll scheme, based on
installing sophisticated satellite tracking technology in every vehicle in the
country, "have moved sharply up the political agenda".

Compared with the implications of a New Labour-inspired ‘spy-in-the-sky
satellite’ scheme, charging from 3p a mile on quiet roads, to £1.30 a mile in
crowded city centres, the London congestion charge will soon seem small beer.

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