TfL bad debt increases by almost £300m in three years

With Transport for London’s (TfL) bad debt levels climbing almost £300m in three years, the Mayor has been urged to increase collection levels for road user charging schemes.
In 2020-21, figures showed TfL’s bad debt expenses to be c.£160m.¹ At a recent Budget and Performance Committee meeting, the Committee was told that bad debts are now in the region of £450m.²
 
The sharp increase coincides with the expansion of the Ultra Low Emission Zone (ULEZ) to the North and South Circular in October 2021, and London-wide in August 2023. In September 2024, The London Assembly was informed that TfL was now owed £376 million in unpaid Penalty Charge Notices (PCNs) for the ULEZ.
 
The London Assembly Budget and Performance Committee has today published a letter to the Mayor, calling on him to consider increasing collection levels for road user charging schemes, to ensure money owed can be spent on improving London’s transport network.
 
Key recommendations include:

• TfL should review the causes of the increase in its bad debt charge since 2021-22 and look at appropriate measures to increase collection levels for all road user charging. TfL should seek to conclude this exercise in time for it to be reflected in the 2025-26 Budget and break it down for each type of road user charge.
• TfL should set out in its 2025-26 budget submission and 2024-25 performance reporting the level of contingency it holds for exceptional items such as handling the recent cyber attack, recent applications of such contingencies and the actions it is taking to address any lower than anticipated operating surplus levels.
• The 2025-26 Budget proposals should explicitly confirm whether the Mayor will continue to provide ongoing funding from GLA funds for the current fares freeze, and be clear on the source of the funds.

Neil Garratt AM, Chairman of the Budget and Performance Committee, said:

“The Ultra Low Emission Zone appears to have contributed to a near £300m increase in bad debt in three years, an urgent financial problem for TfL.
 
“Such large sums of money being owed to TfL, which may not be recoverable, means that much-needed transport investment projects might be scrapped.
 
“That is why we have today called on the Mayor to look at appropriate measures to increase collection levels for road user charging schemes, and also to provide details on the ratio of bad debt charges before and after the ULEZ expansion into outer London in 2023.

“It is important for Londoners to know whether the ULEZ expansion is delivering as expected on the financial side, as well as the public health side.
 
“If TfL’s finances and the Mayor’s plans are not based on reality, they cannot be delivered.”