The Hidden Cost of ULEZ
The cost of ULEZ, on you and I as taxpayers, is going to be a lot more than the £12.50 we’ll be paying to drive to our nan’s to see if she’s OK. It is likely to cause your council tax to rise.
Worryingly, Havering hasn’t yet worked out the true cost of ULEZ.
I’m going to caveat the entirety of the below by saying that I want everyone to be exempt. ULEZ needs to be scrapped. However, council fleets are a massively overlooked cost in the ULEZ story.
I have asked the Leader of Havering to join my in writing to the Mayor of London, asking for Council fleets to be exempt.
Councils own a lot of vehicles. From the Mayor’s official car through to those little street sweepers you see driving around. They have the caged vans that collect bulky waste, dustbin lorries, parks vehicles, and buses that transport the elderly and vulnerable to day centres and schools.
This is going to be an awful lot of vehicles. All of which, with the exception of the passenger transport (I believe) will not be exempt from ULEZ.
Havering Council, like businesses all across London, will be paying out hundreds per day to Mayor Khan’s ULEZ.
If we suppose Havering has 50 non-compliant vehicles (the number hasn’t yet been revealed), then this is a cost of over £200,000 a year.
Remember, that’s a new cost. Something that wasn’t required last year and wasn’t expected until very recent.
This is a good time to remind residents that, last Wednesday, I asked the Leader of the Council if they had calculated the cost of ULEZ on their fleet. They hadn’t. Which is really worrying, given Havering is supposed to be in a dire financial situation.
Why have they not checked this over yet…? They seem a bit too relaxed to me.
Council finances – spreading out the cost
Council finances, like businesses, are different to yours or mine. When we buy something, we say that it cost us £x and we feel that cost immediately. Of course, sometimes we use credit, but that only makes things more expensive.
When a business or Council buys something, that item becomes an ‘asset’ and it given a value. Someone worth £1million is unlikely to have £1million in the bank. They will own things worth £1million.
Over time, the things they own may go up or down in value. A new car, for example, will decrease in value every year.
Businesses and councils will take out loans against the value of their assets. Much like a mortgage.
The cost of an item is also, often, spread out over it’s expected lifetime. So, if a council buys a car that is due to last 10 years, the cost will be spread out over the 10 years. They may have to pay it all upfront but… accounting.
ULEZ’s impact on all of this
So, what does any of the above have to do with ULEZ?
The council will be forced to dispose of assets before their expected lifespan
The value of the assets will be dropping
If you try and sell a second hand car right now, and it isn’t ULEZ compliant, you’re not going to get anything for it in London. You will have to sell it to someone who lives nowhere near the zone and has no intention of driving into it. So that rules out people in Essex.
This means that the price you can sell it for will be much less. If the council has any non-compliant assets, then they have been devalued by ULEZ. So straight away, we’re in a worse financial situation.
The cost of replacing the fleet is a completely unexpected cost. ULEZ expansion wasn’t a thing just a year ago. This means the council may not have the funds available to suddenly buy dozens of new cars, vans or lorries. So, it’ll have to borrow more money to get these new vehicles.
We have a perfect storm of cost. Lower asset value (lower income) + Higher borrowing and expenditure. A double whammy to our already overstretched finances.
Taxpayers are going to have to foot the bill
Havering Council doesn’t have any money.
I don’t mean that in the sense of “we’re skint”, there’s a lot of money floating around. I mean that it only spends your money. Your taxes.
When Havering Council borrows money, it’s taking out a loan on behalf of taxpayers. When it spends money on a new desk, wages or car it is spending your taxes.
If we presume that they don’t change the fleet and that they have to pay £200k a year more, then taxes need to go up.
If we presume that they will change their fleet, unexpectedly, replacing dozens of vehicles, then that means more borrowing = more taxes.
Whether your car is compliant or not, you will be impacted by the cost of ULEZ.
Havering Council’s Scrutiny
I have, this morning, written to the Overview and Scrutiny Board Chairman and asked that Councillors be provided with the expected cost of ULEZ.
I want us to hold a meeting where we find out how many non-compliant vehicles we have and the cost of replacing them.
We must then make this cost known to the public.